MUNICIPAL COMMITTEE, AMRITSAR & Ors. v. STATE OF PUNJAB & Anr.

HELD: (1) Under Art. 3!A(l)(b) it is only the management and control of the aided schools, that could be taken over for a limited period in the public interest or inorder to secure their proper management, but pr9prietary interests in movable and immovable properties pertaining to the schools and belonging to the appellant could not be acquired. Jn the present case in view of the terms·of the resolution of January 3, 1962 and the subsequent resolutions of the appellant it coµld not be said that the resolution fell within the first part of s. 3 and that action was taken by the State pursuant to such resolution. The action was taken by the respondent only under s. 5 and when once action was si:> taken all the Properties, movable and immovable, belonging to the local body pertaining to schools taken over, became the property of the State, by virtue of the arr endments made in s. 59 of the Punjab Municipal Act. When the proprietary interest in the movable and immo\"able property pertaining to the schools and belonging to the Committee is Illus acquired, the action is not protected by A\'t. 31A(l)(b) as it is nothing short of compulsory acquisition within the meaning of Art. 31(2) of the Constitution and is for payment of in violation of that .Article _when there is no provision compensation. [386 A-F; 387 F--0] ' (2) Jn the notification there was no indication that the management of the schools was being taken over because any emergency existed. The State could not sh0w hv placin~ material before the court that it was a case of emergency justifying the action under the proviso to s. 5, when no foundation in that behalf had been lai~. in the writ petition. (388 ~; D-El (3) The mere fact that the Act in terms was feiiOSpective would not make the notification issued under the proviso to s. 5, retrospective, the absence of express words or aporopriate language from which ret'ro activity would he implied. The notification only meant that the manage· ·rnent was taken over from the date of the notification and not from any orior date. Therefore. whatever was done before the date of the notificatioq ·regarding the assumption of management and vesting of the Committee's property was void and illegal. (389 A-CJ ( 4) Under s. 6 of the Act it is only after the local authority has passed a resolution under s. 3 or the State Government .has taken over manaw, nwnt of the aided schools under s. 5, that ss. 52. and 59 of Punjab Municipal Act would be deemed to have been amended tn the A 8 c D MUNICIPAL COMMITTEE v. PUNJAB (Grover, !.) 377 manner specified in the Schedule with effect from October I 1957. If t~e notification in the p~esent case, .could. no~ ?e given retrospe~tive, opera­ tion, the amendments in the Pun.1ab Municipal Act would be effective only after the date of the notification and not for the prior period. Thus, even on the assumption that the provisions of the Act are valid the State could not ask for any contribution from the Committee for thz period prior to the date of the notification. [389 Ii-FJ (5) By asking the Committee to make contributions fro~ its funds under the newly introduced cl. g in s. 52(1), to the cost of the schools which have been taken over by the State, part of its funds are being com pulsorily acquired by the State, ''"hich could not be done except in accord ance with the provisions contained in Art. 31(2). [390 C-D, E-FJ When the State Government makes a direction under s. 3(2) that the aided schools shall be taken over, the proprietary and ownership rights of the Committee also vest in the State Government. Further, s. 6 comes into operation as soon as a local authority has passed a resolution under s. 3 or the State Government has taken over management under s. 5, and the provisions relating to acquisition of property of the Committee as also of its funds by way of c·ontribution, come immediately into operation by virtue of the amendments effected in ss. 52(1) and 59 of the Puniab Municipal Act. [391 A-DJ Since there is no provision for compensation in the Aided Schools Act or s. 59 of the Municipal Act, s. 3(2) of the Aided Schools Act and the amendments in ss. 52(1) and 59 of the Punjab Municipal Act are void and unconstitutional. [391 DJ Hence, the order ~I which, the movable. and immovable property of the Committee has been transferred to the State contribution was sought be recovered, and the sum of Rs. 53 lakhs was demanded, is illegal. [391 D E] E Municipal Co1nmittee, Antritsar v. State of Punjab, [1969] 3 S.C.R. 447, followed. CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1321 of

#1966. F Appeal by special leave from the judgment and order dated November 15, 1965 of the Punjab High Court in Civil Writ No. 878 of 1964. Niren De, Attorney-General and Naunit Lal, for the appellants. Hardev Singh and R. N. S.ichthey, for the respond~nts. The Judgment of the Court was delivered by Grover, J. · This is an appeal by special leave from a judg· ment of the Punjab High Court dismissing a petition under Arts. 226 and 227 of the Constitution which had been filed by the ap pellant Municipal Committee challenging the taking over by the State of all the schools which were being run by it together with all the buildings in which the schools were functioning and other mov able and immovable properties connected with these institutions G H 378 SUPREME COURT REPORTS (1970] 2 S.C.R. which belonged to the Committee. The order of the State for payment of an annual contribution which upto the date of the filing of the writ petition i.e. May 10, 1964 had reached the figure of 53 Jakhs was also challenged. The appellant Committee is a first cla 0 3 Municipal Committee and has been ill' existence from a long time. It has been manag, ing its local affairs through the elected representatives from the city who are calied Municipal Commissioners. It is qmstituted ~nd functions under the provisions of the Punjab Municipal Act 1911. A number of primary schools were bei11g run by the Com mittee within the municipal limits of the town of Amritsar for which it was getting grant-in-aid from the Punjab Government. It was, however, running schools upto the middle and high stan dards for girls and boys for which all the expenses were incurred by itself without any grant from the Government. The primary liability, however, for incurring the extra expenditure even in con nection with the aided ~chools was of the Committee. The Punjab Government took an administrative decision to provincialise all the schools run by all local bodies in the State with effect from October 1, 1957. This information was conveyed by means of a letter dated July 19, 1957 by the Secretary to the Government, the Deputy Commissioners in Education Department, through Jullundur and Ambala Divisions. At a meeting of the appellant Committee held on July 31, 1957 a resolution was passed that a strong representation be made to the Government against the de cision to provincialise the schools run by the local bodies. On September 26, 1957 the Assistant Director of Schools wrote to the District Inspector that "as all the local body schools are being provincialised with effect from October 1, 1957 the tuition fees etc. to be realized in such schools after that date should be credit- ed to the Government in the treasury under the head ........ " Without enacting any legjslation the State took over all the schools !'Un by the local bodies on Octol;>er 1, 1957. A memorandum from the Director of Public Instructions, Punjab to the District Inspector of Schools sent on October 5, 1957 conveyed the follow ing direction : "All the erstwhile Local Body Schools which have been provincia!ised with effect from the !st October, 1957 will henceforth be known as Government High/ Middle/Primary Schools for Boys or Girls as the case may be". The Executive Officer of the appellant Committee (appointed under the Punjab Municipal Executive Officers Act 1931) wrote to the Deputy Commissioner, Amritsar on November 21, 1957 that no formal orders had been received from the Government requirin)!; the Committee to give up possession of the schools and it appeared A B c D E F G H A B c D E F G H MUNICIPAL COMMITTEE v. PUNJAB (Grover, J.) 379 that no procedure had so far been devised in that behalf or for the settlement of terms and conditions on which the buildings, fur niture, fittings and other materials were to be transferred. He pressed for proper steJ.>S being taken. The Secretary to the Gov ernment, Punjab, Health and Local Government Department sent a memorandum dated Seotember 10, 1958 to all the Deputy Com missioners saying that the work of proper maintenance of the buildings of the provincialised schools of the local bodies would to the Public Works Department, Buildings and be entrusted Roads. A letter was addressed by the same authority dated Sep tember 30,/0ctober 4, 1958 to the Deputy Commissioners request ing them to supply immediate information showing the contribu tions actually deposited into the treasuries by the local bodies in respect of the provincialisation of the schools. This was followed by the memorandum dated December 12, 1958 to the effect that all local bodies "be advised to execute the transfer notes in respect of the school buildings etc by their respective Engineering Estab lishments in favour of the Superintending Engineers concerned". By means of anoth'er memorandum dated December 26, 1958 orders of the Government were conveyed that immediate steps should be taken for getting the contribution from local bodies and also for obtaining transfor of buildings and equipment. The De puty Commissioners were requested to get the requisite resolutions passed by the local bodies in the prescribed form. The appellant Committee at its meeting held on January JO, 1959 decided not It was also resolved to pay any contribution for the time bting. that the Committee was not in favour of transferring the proprie tary ri~hts in movable and immovable property which was in pos session of the ·schools. It appears that up till June 17, 1959 the State continued the process of provincialisation of the schools mentioned before with out any authority of law. There was no statutory provision which entitled the State to tak~ over the school' of the local bodies in cluding the buildings in which the schools were being run as also furniture etc which belonged to the local bodies. Moreover the extraordinary step of demanding annual contribution was also taken ~ithout .any. sanction or authority of law. The appellant Committee wh1ch.1s one of the biggest Committees in the State seems to have resisted the attempt on the part of the Government to take ovrr the sch?ols. and acquire or requisition its properties 1~ the manne~ m which 1t was done. Legislation was for the first time '~nacted m the shape of the Punjab Local Authorities (Aided Schonls) Act 1959, (Act No. XXII of 1959), hereinafter ~ailed the I.t received the assent of the President on June 9, 1959. Act. According to the preamble the Act was enacted to provide for the manag~mem and control of local authorities' schools receiving grants m aid from the State of Punjab. By a deeming provision 380 SUPREME COURT REPORTS (1970] 2 S.C.R. the Act was to come into force with effect from October l, 1957. Section 2 gave the definition of "aided schools", "local authority". and "school". "School" has been defined to include land, build ings, pl~y-grounds and- hostels of the school and the movable pro perty such as fu•niture, books, apparatus, maps and equipment pertaining to the school. The following provisions of the Act as amended may be reproduced : S. 3 "Power of local authorities to transfer manage ment and control of aided schools to State Government. (1) A local authority may pass a resolution to trans fer the management and control of aided school to the the same to the State Government and communicate State Government. (2) On receiving such a resolution, the State Gov ernment may direct that the aided schools shall be taken over under its management and control and thereafter all r'ghts and interests including the right of mainten ance, management and control shall be transferred to and vest in the State Government and the rights and in terests of the local authority in respect of such schools · shall cease." S. 4 "Power to withdraw grant-in-aid.-The State Government may withdraw the grant-in-aid from any local authority in respect.tof aided schools if the resolu tion mentioned in section 3, has not been passed and communicated to the State Government within a period of three n;;:mths from the date on which this Aet is pub lished in the Official Gazette." S. 5 "Power to take over aided schools where local authority neglects to perform duty.-(!) Whenever the State Government is satisfied that a local authority has neglected to perform its duties in respect of aided schools or that it is necessary in public interest to take over their management for a period not exceeding ten year;. it may after giving the local authority a reasonable opportunity for showing caus~ against the proposed action, make an order to take over the management : Provided that in cases of emergency, where the State Government is satisfied that such a course is necessary in the interests of the students, it may, without giving such notice, take over the management of such schools after publication of a notification to that effect in the Official Gazette." (2) & (3) ........................... . A B c D E F G H A B c D E F G H MUNICIPAL COMMITTEE v. PUNJAB (Grover, i.) 381 S. 6 "Amendment of Punjab Acts No. III of 1911 and No. XX of 1883.-Where a local authority has passed a resolution under s. 3 or the State Government has taken over management of aided schools of a local authority under section 5, the Punjab Municipal Act, 1911, and the Punjab District Boards Act, 1883, shall be deemed to have been amended in the manner specified in the Schedule apoended to this Act with effect from the !st October, 1957." Section 52(1) of the Punjab Municipal Act relates to the setting apart of the municipal funds and apply the same for different pur poses as mentioned in clauses (a) to (f). By means of the Schedule to the Act after clause (f) of sub-s. (I ) , cl. (g) was added which is in the following terms : " ( g) seventhly, such sum to be paid annually by the committee to the State Government by way of con tribution as is equivalent to- (i) the total provision made in the budget for the year 1957-58 under the main head 'J:Oducation' excluding educational grants and the provision made for 'original works' relating to schools; and (ii) a sum representing one per centum of the total income from its own resources for the year 1957-58, in lieu of the deductions made for 'ori ginal works' made under clause (i) : Provided that in respect of the financial year 1957- 58 the committee shall make a payment to the State Government of the sums which have remained unex pended on 31st March, 1958, out of the provisions under t!ie head 'Education' in the budget of 1957-58". Section 59 of the Punjab Municipal Act provides that the Com mittee may with the sanction of the State Government transfer to the Government any property vesting in the Committee under s. 56 or s. 57 but not so. as to affect any trusts or public rights 'subject to which the property is held. A proviso was added ta the section by the Schedule which was as follows :-- "Provided thu.t where a committee has passed a re solution under section 3 of the Punjab Local Authori ties (Aided Schools) Act, l 9j9, or the State Govern ment has taken over the management of aided schools of a committee under section 5 of that Act, all rights in the establishment, maintenance and and interests mapagement of the aforesaid schools immediately before th~ Isl October 1957, including all interests in the lands, 382 SUPREME COURT REPORTS [ 1970) 2 S.C.R. buildings, play grounds, hostels of the said schools as also in the movable properties like furniture, books, ap paratus, maps and equipment pertaining thereto shall be deemed to have been transferred to the Stat~ Govern ment on that date, and all unspent balances in respect of grants ~'Id contributions received for the maintenance and promotion of these schools shall be deemed to have been surrendered to the State Government." for a period of ten years the Government took over After the promulgation of the above legislation the appellant Committee passed a resolution on February 24, 1960 reiterating the decision taken in the Local Bodies Conference held at Jullun· dur and its own decision to requ~st the Punjab Government to restore the schools run by the local bodies to them. At another meeting held on June 9, 1960 the appellant Committee decided s. 3 of the Act transfering its not to pass the resolution under schools and property to the State Government. The Punjab Gov ernment, however, issued a notification dated September 26, 1960 saying that the Governor was satisfied that it was necessary in the interests of the students to t_ake over for a period of ten years the management of the schools specified in the schedule and ad· ministered by the Municipal Committee. Amritsar, and therefore in exercise of the powers conferred by the proviso to s. 5 of the Act management of the said schools. The schedule contained the list of 42 such schools. The question of the payment of the contri· bution which was bein.2 demanded by the Government came up for consideration at a meeting of the appellant Committee on It was decided that the payment be made on January 3, 1962. the basis of a formal laid down by the State Government in that behalf with effect from October 1, 1957 but that the propr•ccary rights of the Committee in the school buildings be retained and the use of these buildings free of charge be allowed to the Gov· ernment for the purpose of running the schools. At a subsequent meeting held on MarclJ. 28. 1963. the appellant Committee. how· ever, revised its previous decision in view of a resolution passed in the meeting of the Standing Committee of Urban Local Bodies Conference held on June 2 I. 1962. It was uecided that the State Government was not entitled to charge contributions from the Municipal Committee. On April I 0. J 964 the Deputy Comm is· sioner. Amritsar. made an order in exercise of the powers vested in him under s. 234(1) of the Punjab Municipal Act requiring the appellant Committee to pay an amount of Rs. 53,66,146/- c:1 account of contribution for the maintenance of the provin·:biised schools for the period 1957-58 to 1963-64 failing which realization was to be made under sub-s. (2) of that secti<'n. Thereupon the petition under Arts. 226 and 227 of the Constitution was filed by the appellant Committee in which apart from other matters the In the validity and constitutionality of the Act were challenged. 8 c D F G H A B c D E F G H MUNICIPAL COMMITTEE v. PUNJAB (Grvver, J.) 383 return filed on behalf of the State reliance was placed on the pro-· visions of the Act, the resolution passed by the Committee itself on. January 3, 1962 agreeing to pay the-contribution and allow the· use of school buildings to the Government free of charge and the notification which had been issued under s. 5 of the Act on Sep tember 26, 1960 whereby the management of the schools of the Committee had been taken over for a period of I 0 years_. The High Court was of the view that since the Government !•ad. taken over the control and management of the aided schools !•. was considered necessary that the property in possession of these insti-. tutions should also be taken over and managed for a limited period of 10 years. Since no compensation was being paid for what may be called compulsory acquisition the legislation could be struck down as being in contravention of Art. 31(2) of the Constitution. In the preser.t case, however, the management of the property in possession of the schools was being taken over for a period of 10 years in the public interest by virtue of the provisions of Art. 31- A(l )(b ), and the contravention of Art. 31 (2) was of no conse quence. The argument raised on behalf of the State that the reso lution cf the appellant Comrr; ittee dated January 3, 1962 con senting to the payment of the contribution with effect from Ortober 1, 1957 had been passed in terms of s. 3 of the Act was refutec.l. As regards the notification issued on September 26, 1960 under the Act the High Court was of the opinion that although it did not contain any provision for retrospective operation it should be con sidered that it had retroa~tive effect since the Act itself had been enforced from October 1, 1957. It was conceded before the High Court that the notification did not apply to those schools which did not receive any aid from the Government. The learned Attorney General for the appellant Committee· (1) The material provi raised the following main contentions : sions of ·the Act were ultra vires Art. 31 (2) of the Constitution (2) The taking oyer of movable and immovable property of the· Committee could not possibly fall within Art. 31A(l)(b) and such action was in direct rnntravention of Art. 31(2). (3) The notification dated September 26, 1960 could not have been issued under the proviso to s. 5 because there was no question of any emergency nor such an emergency has been pleaded or proved by the State. (4) The said notification could not and did not vali date the action taken prior to the date when it was issued nor s. 6 of the Act could be attracted which effected amendments C'f the provisions of the Punjab Municipal Act as per the Scheduie. (5) The annual contributions which were being demanded from the appellant Committee were. wholly illegal and could not be levied on account of legislative incompetence. Now the scheme of the Act is that it is initially left to the local authority to pass a resolution to transfer the management and con-· 384 SUPREME COURT REPORTS (1970] 2 S.C.R. trol of aided schools to the State Government. In order to employ compulsive persuasion the State Government can withdraw the grant-in-aid from any local authority in respect of aided schools if such authority does not pass a resolution in terms of s. 3 within a period of three months from the date of enactment of the Act ( vide s. 4). Section 5 gives the power to the State Government to take over aided schools where the local authority neglects to per form the duty but that can be done only after the local authority has been given a reasonable opportunity for showing cause against the proposed action and also if it is considered necessary in public interest to take over the management for a period not exceeding 10 years. The proviso, however, arms the State Government with powers in case of emergency and in the interests of students to take over the management straightaway after publication of a notifica tion to that effect. The amendments which are effected in ss. 52 and 59 of the Punjab Municipal Act enable the State Government to get an annual contribution from the local bodies and further to vest in the State not only the management of th" school taken over but also all interests in the lands, buildings etc. of the school al, mg with the movable properties pertaining thereto which shall be deem ed to have been transferred to the State. There is no provision w~hatsoever for an automatic retransfer of these properties after a lapse of a period of I 0 years for which the taking over of the schools can be effective. This means that once actiun is taken under s. 5 which can be done pursuant to a resolution passed under s. 3 or after giving a notice to the local authority or without giving such notice in case of emergency all the properties movable and immov able belonging to the local body pertaining to the schools taken over become the property of the State. This is nothing short of compulsory acquisition within the meaning of AT!. '01(2) of the Constitution. Under that Article no property can be so acquired or tequisitioned unless it is under an authority of law which either fixes the amount of compensation or specifies the principles on which and the inanner in which the compensation is to be deter mined and given. There is no provision in the Act or in the amend ment of s. 59 of the Punjab Municipal Act made by the Act for payment of any compensation. On the assumption that taking over of the property for a period of 10 years would be an act of re quisitioning, the requirements of Art. 31(2) ·must be satisfied to sustain the validity of the law. The High Court entertained no doubt that under that Article property could not be acquired or requisitioned without complying with its provisions but it fel! into an error in applying Art. 31(A)(l)(b) to the provisions under consideration. Under the above Article it is only the management of any property which can be taken over for a limited period either in the public interest or in order to secure its proper management. Ac- A B c D E F G H ,_ MUNICIPAL COMMITTEE v. PUNJAB (Grover, J.) 385 A cording to the High Court the Committee was indisputably the owner of the property which was being taken over by the State but P. C. Pandit J., wh_o delivered the judgment of the division. bench proceeded to say : - B c D E F G H "In the present case, tl:e management of the property in possession of the schools was being taken over for ten· years in public interest and, as such, by virtue of tlie pro visions of Article 31A(l)(b), the contravention of Art. 31 (2) was of no consequence. Learned Counsel for the petitioner submits that Art. 31A(l)(b) does not apply to the facts of the instant case, because here the manage ment and control of an institution namely, the school, was being taken over by the Government, whereas this Article applied where the management of any property was b~ing taken over by the Government for a limited period in the public interest. This argument is without any merit, because the property may belong to any body, whether it be an individual, or a Committee or an industrial or commercial undertaking or any kind of In all these cases, where the manage-· other institution. ment of the property is taken over for a limited period in public interest, this Article would be attracted and the legi>la•ion would not b~ hit by the provisions of At ticle 31 of the Constitution". Clause (b) in Art. 31 A(!) came to be inserted for the first time by It was intended the Constitution (Fourth Amendment) Act 1955. apparently to counteract the effect of the decisions in Sholapur c3'e,. Charanjit Lal Chowdhuri v. The Union of India & Or.d 1 ) and Dwarkadas Shrinivas of Bombay v. The Sho/apur Spinning & Weoving Co. Ltd., & Ors.('\. The purpose, therefore, of inserting this provision was to remove any legislation from the pale of :1ttack on the ground of contravention not only of Art. 31 but also of Arts. 14 and 19. Although management and control of the aided schools under the impugned legislation could be taken over for a limited per!9d in the public interest it is not possible to understand how even the proprietary interests in the movable and immovable property pertaining to the schools, which have been found to belong to the Committe.e, could have been acquired under clause (b) of Art. 31-A(I ) . With all deference to the High Court we have not been able to properly appreciate t~e decision on this point given in the paragraph extracted above. The High Court did not consider the true import and effect of the amend me!lt mad~ in s. 59. of the ~uniab Municipal Act by virtue of )Vhtch all n~hts and interests m the lands, buildings, plavgrounds, hostels of the schools as also in the movable property like furni ture, books, apparatus. maps and equipment pertaining thereto II) 1195P] S.C.R. Fr.9. (2\ 11954] S.C.R.476. 386 SUPREME COURT REPORTS [1970] 2 S.C.R. 'shall be deemed to have been transferred to the State Government with effect from October 1, 1957. We are, therefore, unable to uphold th.~ view which leads to the result that property can be .acquired while taking over management and control under Art. .31-A(l)(b) in complete negation and contravention of Art. 31(2) ·Of the Constitution. The next question is whether there was due compliance with In the notification .the provisions of the proviso to s. 5 of the Act. which was issued on September 26, 1960 there is no indication that the management of the schools was being taken over because ·Of certain emergency having arisen. If any emergency existed ii was the creation of the government itself which had proceeded to take over management a_nd control of the aided schools along with the properties pertaininr to them without any authority of law prior to the enactment of the Act. That was the reason why the Act had to be given retrospective operation. According to the High Court the moment the State Government was satisfied that it was in the interest of the students to take over the management -0f the schools it became a case of emergency. It also relied on the principle that it was not necessary to mention the actual emer gency which had arisen in the notification itself or to make a recital that an emergency had arisen. The State could not show by placing material before the court that it was a case of emer gency justifying the action under the proviso to s. 5 because no foundation in this behalf had been laid in the writ petition. The third point pressed by the learned Attorney General, therefore, cannot be acceded to. The fourth point of the lean.~d Attorney General may now be ·considered. There was SQme argument before the High Court and the same has been repeated before us on behalf of the State that the question of validity of the notification and the action taken thereunder did not arise because the Committee itself had passed a resolution on January 3, 1962 which should be regarded as hav ing been passed under the provisions of s. 3 transferring the mana gement and control of the schools to the Government and agreeing to pay the contribution with effect from October l, 1957. The High Court has rightly pointed out that a reading of the resolution would show that the Committee agreed to the payment of contri bution with effect from October I, 1957 in accordance with the formula laid down by the State Government. It was. however. made clear that the "proprietary rights of the Committee in the movable and immovable property pertaining to the schools would be retained by it. The Committee had subsequently passed several resolutions which had the effect of almost rescinding the previous resolution. The submission on behalf of the State that the resolu tion dated January 3, 1962 passed by the Committee fell within the first part of s. 3 of the Act is wholly devoid of merit and has rightly not b~en accepted. A B c D F. F G MUNICIPAL COMMITTEE -v. PUNJAB (Grover, !.) 387 As regards the notification having retrospective operation we are unable to agree with the High Court that any such effect could be given to it. There is nothing to indicate in the notification that it was intended to opera!(,' retroactively. The mere fact that the Act in terms was retrospective would not make the notification issued under the proviso to s. 5 retrospective in the absence of express words or appropriate language f1om which retrospectivity would be says is that the Governor of Punjab is taking over for a period of 10 years the management of the schools of the Committee in exercise of the powers conferred by the µroviso to s. 5 of the Act. This clearly means that the management is taken over from the date of the notification and not from any prior date. It would follow that whatever was done before the date of the notification regarding the assumption of management and vesting of the Committee's properties was wholly void and illegal. ~II that the notification implied. Under s.6 of the Act it is only after the local authority has passed a resolution under s.3 or the State Government has taken over management of the aided schools under s.5 that ss. 52 and 59 of the Punjab Municipal Act would be deemed to have been amend ed in the manner specified in the schedule with effect from October 1, 1957 or from the date aided schools are taken over If the notification dated September 26, 1960 as the case may be. could not be given retrospective operation the amendments in the aforesaid provisions of the Punjab Municipal Act would be effective only after the date of the notification and not for the prior period. Thus even on the assumption that the provisions of the Act are valid the State could not ask for any contribution from the committee for the period prior to the date of the notifi cation. Bu~ the addition of cl.(g) after cl.(f) in sub-s.(1) of s.52 of the Punjab Municipal Act is void and wholly ineffective for th.e reasons which will be presently noticed. Chapter IV of the Punjab Municipal Act relates to munici pal fund and property. Section 51 deal~ with the constitution of the municipal fund. Section 52 provides for the application of the fund. Before the amendment made by the Act sub-s.(l) had six clauses containing the provisions for the application of the fund. It is noteworthy that although the State Government has been empowered to require the Committee to make contri butions but in each case that to an eventua lity or a situation wr·~re certain cost has been incurred by the Government which had to be defrayed by the Committee, e.g., clauses (b), (d) and (f). According to clause (e), however, the Committee may be required by the State Government to contri bute towards the maintenance of pauper lunatics or lepers sent from any place in the State to mental hospitals or public asylums is confined 8 c D E F G H 388 SUPREME COURT REPORTS [ 1970]2 S.C.R. whether in or outside the State. Sub-section (2) says that subject to the charges specified in sub-s. ( 1) the municipal fund shall be applicable to ·the payment of the matters set out in clause (a) to ( 1). Clause ( c) is in these terms : "the constitution; establishment and maintenance of schools, hospitals and dispensaries, and other insti tutions for the promotion of education or for the benefit cf the public health ...................... " In the ~ontext of s.52 it is difficult to envisage that the municipal fund of a particular Committee could be diverted to such insti tutions which had no connection with the Committee. We are, however, aot called upon to pronounce upon the true scope, am bit and validity of all the provisions in s. 52. Clause (g) which has now been inserted bv means of s. 6 of the Act has to be test ed by the guarantees in· Part III of the Constitntion. By asking the Committee to make contributions from its iJnds to the cost of the schools which have been taken over by the State part of its funds are being compulsorily acquired by the State. This is something which could not be done except in accordance with the provision. contained in Art. 31 ( 2) of the Constitution. In Writ Petition No. 295 of 1968, Municipal Committee, Amritsar v. State of Punjab(') in which the provisions of the Punjab Cattle Fairs (Regulation) Act 1968 came up for examination, it was laid down by this Com t that the State was incompetent to declare land belonging to the Municipal Committee as falling within the fair area and to take posses, ion of that land in exercise of the power conferred by the Act without providing for payment of compensation guaranteed by Art. 31 (2). Clause (g), therefore, which has been inserted in s. 52 of the Punjab Municipal Act is void and illegal as it contravenes Art. 31 (2) of the Constitution. It may be mentioned that the learned Attorney Gentral has also pointed ciut that the State legislature did not have !lie com petence, under any of the entries in List II of the Seventh Sche dule, to enact legislation of the 1111ture embodied in clause (g) which was inserted in s. 52 relatin~ to compulsory contribution by the Committee to the State Government. Counsel for the S•ate has sought to rely on entries 5 and 11 in List II which relate to local government and education. It is unnecessary to decide this matter since it has been held by us that the impugned provisions with re gard to contribution contravene Art. 31 (2) of th-~ Constitution . . , We may now. determine the provisions of the Act which are unconstitutional and invalid. There is nothing in ss. 3(1 ), 4 and 5 of the Act per se which would bring them into conflict with rhe constitutional provisions, particularly. in view of Art. 31 A ( ll(b) (I) [19691 3 S.C'.R. 447. A B c D F G H MUNICIPAL COMMITTEE v. PUNJAB (Grover, ].) 389 A B c D E under which the management of the schools co•ild be taken over by the State for a limited period in public interest. But the diffi culty arises about ss. 3(2) and 6 which have to be read together. When the State Government makes a direction under s. 3(2) that the aided schools shall be taken over all rights and interests of the Committee including the right of maintenance, management and control shall be transferred to and vest in the State Government. This essentially has reference to proprietary and ownership rights apart from the rights pertaining to management and control. Sec tion 6 comes into operation anoon as a local authority has passed a resolution under s. 3 or the State Government has taken over management under s. 5. Then the provisions relating to acouisi tion of property of the Committee as also of its funds by way of contribution come immediately into operation by virtue of the amendments effected in ss. 52(1) and 59 of the Pu:ijab Municipal Act. These provisions are .clearly unconstitutional as they con travene Art. 31 (2) of theConsltation. In the resµlt the appeal is allowed with costs and the judgment of the High Court is set aside. It Is declared that s. 3(2) of the Act and the amendments which would become operative under s. 6 in respect of ss. 52(1) and 59 of the Punjab Municipal Act are void and unconstitutional. The orders by which the movable and immovable property .of the Committee have been transferred to the State are hereby quashed and such transfers are declared to be wholly void. The respondents are further directed not to recover any contribution in accordance with clause (g) of s. 52 of the Punjab Municipal Act as also the sum of Rs. 53 lakhs mentioned in the order of the I).eputy Commissioner dated April 10, 1964 from the appellant Committee. Appropriate writs and directions shall issue in this behalf. V.P.S. Appeal allowed. L2Sup. Cl/70-13