By the Court.—The constitutional validity of Section 12-A of the Uttar Pradesh Industrial Area Development Act, 1976 and of a notification of the State Government dated 14 January 2015 is in issue. The challenge is on the ground that Section 12-A is ultra vires Part IX of the Constitution. District Gautam Budh Nagar was constituted a district on 6 May 1997, comprising of revenue villages from the tehsils of Dadri, Sikandarabad and Khurja of district Bulandshahr. After the creation of the new district, the State Government, in exercise of powers conferred by Section 17 of the Uttar Pradesh Kshettra Panchayat and Zila Panchayat Adhiniyam, 1961 (Adhiniyam of 1961), constituted a Zila Panchayat for the district. Elections were held after de-limitation of constituencies and wards.

2. On 17 April 1976, a notification was issued by the State Government declaring an ‘industrial development area’ under the provisions of Section 2 (b) of the U.P. Industrial Area Development Act, 1976 (Act of 1976).

3. Part IX of the Constitution deals with Panchayats. Article 243 (d) defines the expression ‘Panchayat’ to mean an institution (by whatever name called) of self-Government constituted under Article 243-B for rural areas. In Article 243-B, the Constitution has made provisions for the constitution of Panchayats. Clause (1) of Article 243-B requires that there shall be constituted in every state, Panchayats at the village, intermediate and district levels in accordance with the provisions of the Part. Part IX-A deals with Municipalities. Under Article 243-P (c), the expression ‘Metropolitan area’ is defined to mean an area having a population of ten lakhs or more, comprised in one or more districts and consisting of two or more Municipalities or Panchayats or other contiguous areas, specified by the Governor by public notification. Article 243-P (d) defines the expression ‘Municipal area’ to mean the territorial area of a Municipality as is notified by the Governor. Article 243-P (e) defines the expression ‘Municipalities’ to mean an institution of self-Government constituted under Article 243-Q. Article 243-Q provides as follows:

“243-Q. Constitution of Municipalities.—(1) There shall be constituted in every State,—

(a) a Nagar Panchayat (by whatever name called) for a transitional area, that is to say, an area in transition from a rural area to an urban area;

(b) a Municipal Council for a smaller urban area; and

(c) a Municipal Corporation for a larger urban area,

in accordance with the provisions of this Part;

Provided that a Municipality under this clause may not be constituted in such urban area or part thereof as the Governor may, having regard to the size of the area and the municipal services being provided or proposed to be provided by an industrial establishment in that area and such other factors as he may deem fit, by public notification, specify to be an industrial township.

(2) In this article, “a transitional area”, “a smaller urban area” or “a larger urban area” means such area as the Governor may, having regard to the population of the area, the density of the population therein, the revenue generated for local administration, the percentage of employment in non-agricultural activities, the economic importance or such other factors as he may deem fit, specify by public notification for the purposes of this Part.”

4. Municipalities envisaged by clause (1) of Article 243-Q are of three kinds: (i) Nagar Panchayats for transitional areas, which are areas in transition from rural to the urban; (ii) a Municipal Council for a ‘smaller urban area’; and (iii) a Municipal Corporation for a ‘larger urban area’.

5. The proviso to Article 243-Q (1) is in the nature of an exception because it stipulates that the mandate to create a municipality under the substantive part may not be observed in a situation governed by the proviso. Under the proviso, a municipality may not be constituted in an urban area or its part as the Governor may