A notification issued under Section 5 of the Punjab Municipal Act is invalid if it is issued without obtaining the Governor's approval, as required by the Rules of Business, when the earlier proposal to extend the municipal limits had been dropped under the orders of the Minister.

1. Petitioner No. 1 is a Public Limited Company (hereinafter called the Company) registered under the Indian Companies Act, 1953. It has established a textile Mill in Village Chachoki, tehsil Phagwara. On December 23, 1971, the State of Punjab issued a notification under Sections 5 and 6 of the Punjab Municipal Act by which it invited objections from the affected persons regarding the proposed exclusion and inclusion of areas within the limits of Municipal Committee, Phagwara. The company filed objection against the inclusion of its area within the limits of the Municipal Committee, Phagwara, in which it was, inter alia, stated that the town of Phagwara had extended more towards Hoshiarpur side which area was not being included, that the Company had large number of employees who had been paying taxes to the Gram Sabhas, that they would be burdened by double taxation, and that the Company had developed the area by constructing roads and residential quarters for its employees for providing them amenities which entailed an annual recurring expenses of over rupees two lacs, meeting of which would be beyond the financial resources of the Municipal Committee. These objections were filed through the Deputy Commissioner, Kapurthala, and it is alleged that the Deputy Commissioner retained the objections in her office till March 7, 1972. On that date, the Deputy Secretary, Local Government, Punjab asked the Deputy Commissioner to expedite the report on the objections filed by the affected persons. In response to this request, the Deputy Commissioner sent her report on March 9, 1972, and the State Government issued the impugned notification on March 10, 1972. It is alleged that the undue haste with which the State Government issued the notification shows that it did not apply its mind to the objections filed by the company. The other objection was that the State Government had laid down a policy that before any area under any Gram Sabha or Panchayat Samiti was to be taken out of the limits of a Municipal Committee, the matter was to be referred to a Committee consisting of a Deputy Commissioner, the District Development and Panchayat Officer and the Senior Town Planner of the area. This Committee was supposed to consider the pros and cons of the matter before submitting a proposal to the Government. In the instant case, this settled policy of the Government had also been departed from. The third objection was that on an earlier occasion, i.e., December 24, 1967, the State Government issued a notification indicating its intention to include certain area and to exclude other areas from the limits of the Municipal Committee, Phagwara. The petitioner company and many other persons including the Gram Sabha of Kot Rani and Chachoki filed objections were considered by the State Government and it was ultimately decided that the proposal contained in this notification should be dropped. The notification Exhibit P-1 containing the tentative proposal regarding the reconsideration of the area of Municipal Committee, Phagwara, and the final notification Exhibit P-3 in this behalf have been challenged. The grievance of the Company is that because of its inclusion within the limits of the Municipal Committee, Phagwara it will have to pay octroi duty amounting to about Rs. 1,50,000/- per year. The return on behalf of the Government has filed by the Assistant Secretary to Government, Punjab Local Government Department, Chandigarh. In this return it has been stated that the matter in dispute was of an administrative nature and was not justiciable in the instant petition. The allegation regarding the issuance of a similar notification earlier and the decision of the Government to drop the proposal have not been expressly denied. Respondent No. 5, the Municipal Committee, Phagwara, has filed a detailed written statement. In this return it has been stated that the report was sent by the Deputy Commissioner, Kapurthala, per special messenger and that