Laxmana Murthy and Others vs State of Andhra Pradesh and Others

P.A. Choudary, J.—Sixteen Municipalities, some from Andhra and the others from Telangana but all of which have come of age being in existence for several years, financially virile and vibrant, effectively serving the needs of the respective inhabitants, cry out for help against a common sentence of death passed on them by the Andhra Pradesh State Legislature by means of Section 2 of Act No. 16 of 1979, which reads thus:-

"Section 2:- In Section 3 of the A. P. Municipalities Act, 1965, for sub-sec. (7) the following sub-section shall be substituted, namely:-

(7) Notwithstanding anything in this Act or in any judgment, decree or order of a Court, Tribunal or other authority, every local area with a population of less than twenty-five thousand as at the last census for which a municipality was constituted or was deemed to have been constituted under this Act shall cease to be such Municipality on and from the commencement of the Andhra Pradesh Municipalities and Gram panchayats (Amendment) Act, 1979."

The idea of Local Self-Government in our modern constitutional history is firmly planted by Lord Ripon''s Famous Resolution of 1882. In that resolution the Governor-General in Council explained the under lying purposes of setting up of these political institutions in these words:-

"It is not primarily, with a view to improvement in administrative that this measure is put forward. It is chiefly desirable as an instrument of political education. As education advances, there is rapidly growing up all over the country an intelligent class of public spirited men whom it is not only bad policy, but sheer waste of power, to fail to utilize..............

The Governor-General in Council has no hesitation in stating his conviction that the only reasonable plan open to the Government is to induce the people themselves to undertake, as far as may be, the management of their own affairs; and to develop, or create if need be, a capacity for self-help in respect of all matters that have not, for imperial reasons, to be retained in the hands of the representatives of Government."

This idea has now gained firm foot-hold in our Constitution not only through item 5 of List II of the VII Schedule to the Constitution but also through Article 40 which is one of the Directive principles of State Policy. It is, therefore, clear that in the scheme of constitutional values, the institutions of Municipalities like other organs of Local Self-Government occupy in our country a pride of place it, therefore, becomes of this court''s power and privilege to foster and further and uphold that constitutional culture, particularly against what appears to us to be utterly arbitrary acts of destruction.

The common sentence of extinction passed on these Municipalities by the State of Andhra Pradesh by the force of the aforesaid S. 2 of Act No. 16 of 1979 is based not on the ground that those Municipal bodies are not working efficiently today but only on the ground that the population of these Municipalities was less than 25,000 at the time of the last census which was taken in the year 1971. It is somewhat difficult, though not impossible, to see the rationale behind this action of the State. What has the last census figures taken some eight years or nine years back got to do with today''s decision to extinguish a flourishing Municipality is a question which no person or body of persons of goodwill ever hope to answer. What is more, the present-day population of each of these Municipalities now sentenced to die not only exceeds the 1971 target of 25,000 but their records of service and financial viability are unchallengeably excellent. Let us look at a few random samples. The Kovvur Municipality constituted under the old Madras Act No. V of 1920 had in the year 1979 a population of over 30,000 with Rs. 151/2 lakhs of annual income, although it had only 22,300 population in the year 1971. The Nidadavole Municipality constituted under the aforesaid Act No. V of 1920 had in the year 1979a total population of 29,000 with an annual income of Rs. 19 lakhs although it had a population of only 23,383 in the year 1971. The Markapur Municipality whose present-day population is 35,000 with Rs. 14,80,000 as annual income, had only 22,663 population in the year 1971. The Ramachandrapuram Municipality with the present-day population of 32,500 and an annual income of Rs. 29,75,000 had a population of 23,690 in the year 1971. The Zaheerabad Municipality constituted in the year 1953 has today a population of 28,000 with an annual income of Rs. 9,00,000 but with a population in the year 1971 of only 18,484. The Mancherial Municipality with its present-day population of 30,000 and an annual income of Rs. 19,00,000 had only 19,880 population in the year 1971. The Janagam Municipality with its present-day population of 28,400 had only 16,867 population in the year 1971. It is not the case of the Government nor is it even suggested by the Government, that these Municipalities should not be allowed to function for reasons of financial instability or social or functional turbulence. The one and the only ground which is advanced by the statute in support of the wanton destruction of these Municipalities is that they did not have 25,000 population in the year 1971. Can any fairminded, reasonable, unbiased but resolute man who is not swayed by emotion or prejudice regard this with equanimity and call it reasonable, just and fair, regard it as that equal treatment which is expected of a sovereign democratic republic? (See Justice Bose in The State of West Bengal Vs. Anwar Ali Sarkar, .

In order to appreciate the enormity of injustice done to these Municipalities, it is necessary to mention a few facts. The Andhra Pradesh Municipalities Act of 1965 repealing and replacing the Andhra Pradesh District Municipalities Act of 1920 (Act V of 1920) covering the Andhra Area and Telangana Municipalities Act of 1956 (Act No. 18 of 1956) covering the Telangana area enacted a common integrating law of Municipalities for the whole of Andhra Pradesh under which it is obligatory for the Government to constitute a Municipality for a local area with a population of 25,000. But the Municipalities with whose survival we are concerned in this batch of writ petitions, were constituted long prior to the enactment of the aforesaid 1965 Act. Some of these Municipalities from Telangana area were constituted even earlier to the aforesaid Act No. 18 of 1956 repealed by the 1965 Act. On repeal of Act No. V of 1920 and Act No. 18 of 1956, these Municipalities then in existence for several years were declared to have been constituted under the provisions of the 1965 Act. Section 3 of the 1965 Act puts the Government under a duty to constitute a municipality for a local area, for a population of not less than 25,000. Although these Municipalities, which by the time of 1965 Act had less than 25,000 population, they were allowed by the 1965 Act to continue. The obvious reason is that the legislature thought that these Municipalities then existing for some years should not be abolished on the basis of population laid down by the 1965 Act. In fact, never before or after we come across a case when a flourishing Municipality is replaced by a panchayat. On the other hand, the path of progress in Municipal administration is from Panchayats to Municipalities, District Boards and Corporations.

But the Government appear to have been possessed of an idea to somehow snuff these Municipalities out of existence. Accordingly the Government had first enacted Act No. 29 of 1978 by means of which sub-section (7) was added to Section 3 of the 1965 Act with effect from 5-10-1978. The newly added sub-sec. (7) did not serve the purpose of the Government to destroy these Municipalities because this Court opined through its judgment that the Government u/s 3 (7) must apply its mind to the case of each Municipality and decide, taking into consideration not only the population but also the importance to the place and its financial viability etc., whether a particular Municipality should or should not continue. In other words the court interpreted sub-clause (7) as not conferring power on the Government to extinguish Municipalities merely on the basis of their population. The aforesaid sub-section (7) which was thus interpreted reads thus:-

"The Government may, by notification in Andhra Pradesh Gazette, declare that with effect on and from the date specified therein, the local are with a population of less than twenty-five thousand for which a municipality was constituted or was deemed to have been constituted under this Act, shall cease to be such municipality; and the Government may pass such orders as they may deem fit in regard to the transfer to such local authority as they may specify in this behalf, or disposal otherwise, of the assets or institutions of such municipality and in regard to the discharge of the liabilities, if any, of such municipality relating to such assets or institutions."

Accordingly the aforesaid sub-section (7) was replaced by means of Section 2 of Act No. 16 of 1979 with effect from 12th April, 1979. It is the validity of this section which is the subject-matter of these writ petitions and it reads as follows:-

"Section 2:- In Section 3 of the A. P. Municipalities Act, 1965, for sub-sec. (7) the following sub-section shall be substituted, namely:-

"(7) Notwithstanding anything in this Act or in any judgment, decree or order of a Court, Tribunal or other authority, every local area with a population of less than twenty-five thousand as at the last census for which a municipality was constituted or was deemed to have been constituted under this Act shall cease to be such Municipality on and from the commencement of the Andhra Pradesh Municipalities and Gram Panchayats (Amendment) Act, 1979".

The principal contention in this batch of writ petitions urged on behalf of the petitioners is that taking population of the last census as the sole criteria for the purpose of extinguishing a Municipal body existing for over a decade and functioning today efficiently is wholly irrational and arbitrary and constitutes a denial of the right to equality and equal protection of laws guaranteed to these Municipalities under Article 14 of the Constitution. The Petitioners also contend that the classification made between these Municipalities which are sought to be extinguished and those which are left out and continued to exist is wholly irrational and bears no nexus to the object sought to be achieved by Act No. 16 of 1979. Finally the petitioners also urged mala fides on the part of Sri Baga Reddy, Minister for Panchayat Raj as responsible for this legislation.

The Municipal Corporation "in its strict and proper sense is a body politic and corporate constituted by the incorporation of the inhabitants of a city or town or any other defined locality for the purpose of the local Government thereof" (See Macfee Roger''s). The Law of Canadian ''Municipal Corporations", Vol. 1, page 10, quoting Dillon Municipal Corporations. The sixteen Municipalities with which we are presently concerned are therefore, undoubted legal persons. It is equally without doubt that a legal person as much as a natural person is within the sweep of the protection of Article 14 of our Constitution. (See Chiranjit Lal Chowdhuri Vs. The Union of India (UOI) and Others, ). As legal persons these Municipal bodies are immortal unless done to death by an act of man abrogating their incorporating charters. Now that is exactly what Section 2 of Act No. 16 of 1979 has done.

The only question, therefore, now before us is whether Section 2 of Act 16 of 1979 which extinguishes the lives of these Municipal bodies on the sole basis of their population as enumerated in the last census in 1971 violates Article 14 of the Constitution and is, therefore, void under Article 13 of the Constitution.

The meaning of equal protection clause borrowed from the 14th Amendment of the American Constitution is the subject-matter of elucidation in innumerable court decisions. Broadly they lay down that equal protection of laws means the right to equal treatment in similar circumstances both in the matter of privileges conferred and liabilities imposed by the laws. But this principle does not take away the power of the State to classify persons or things for legitimate State purposes. But permissible classification must not only be founded on an intelligible differential distinguishing those that are grouped together from those left out but that differentia must have a rational relation to the object sought to be achieved by the statute in question. (See The State of West Bengal Vs. Anwar Ali Sarkar, ). In that case Justice Das added that differentia which forms the basis of classification and the object of a statute are different. It follows, therefore, that the object alone cannot form the basis of classification. In Budhan Choudhry and Others Vs. The State of Bihar, , the Supreme Court laid down the meaning of Article 14 in the following words:

"....... In order, however, to pass the test of permissible classification two conditions must be fulfilled, namely,

(i) the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group; and

(ii) that differentia must have rational relation to the object sought to be achieved by the statute in question."

In Ram Krishna Dalmia Vs. Shri Justice S.R. Tendolkar and Others, , the Supreme Court observed:-

"(I) A statute may itself indicate the persons or things to whom its provisions are intended to apply and the basis of the classification of such persons or things may appear on the face of the statute or may be gathered from the surrounding circumstances known to or brought to the notice of the Court. In determining the validity or otherwise of such statute the court has to examine whether such classification is or can be reasonably regarded as based upon some differentia which distinguishes such persons or groups or things grouped together from those left out of the group and whether such differentia has a reasonable relation to the object sought to be achieved by the statute.......

(ii)A statute may direct its provisions against one individual person or thing or to several individual persons or things but no reasonable basis of classification may appear on the fact of it or deducible to the surrounding circumstances; or matters of common knowledge........"

It is thus clear that the practical content of the right to equality under Article 14 rest upon proper classification. It is for this reason that a recent decision of a Division Bench of this Court in Writ Petition No. 4131/79 to which one of us (P. A. Choudary, J.) is a party, referred to this classification as the jugular vein of equal protection clause. But it is not easy for the court to find out whether a particular classification is properly made or not. In many American cases, it has been repeatedly held that "the statutory schemes may treat class of citizens differently only if the statutory classifications are rationally related to the purpose of the statute." But this requirement is not too difficult to comply with, for "it is always possible for a statute to define the legislative purpose of the statute in such a way that the statutory classification is rationally related to it.........."

"A statute''s classifications will be rationally related to such a purpose because the reach of the purpose has been derived from the classifications themselves." In the words of Professor Ely, "A decision to aid artists rather than oilmen is defensible in terms of Promoting the arts; punishing battery more harshly than burglary is defensible in terms of the safeguarding of physical security. And so is any such choice thus defensible in terms of the safeguarding of physical security. And so is any such choice thus defensible, because courts are prepared to credit as acceptable any good the political branches view as contributing to the general welfare. Thus each choice will import its own goal ..... and the requirement of a "rational" choice goal relation will be satisfied by the very making of the choice." (See 82 Yale LJ 120 Legislative Purposes, Rationality and Equal Protection). Hitler''s classification of all Jews into a separate category for purposes of butchering them and Naxalites'' classification of all landlords into a separate category for purposes of exterminating them cannot, therefore, be faulted on this theory of equal protection clause. Let us take our own case. The Act in our cases clearly draws a distinction between Municipal bodies with 25,000 population in the year 1971 and Municipal bodies with less than 25,000 in the year 1971. This classification undoubtedly bears a nexus with the object of the impugned Act which is the destruction of the Municipal bodies with population of less than 25,000 in the year 1971. It follows, therefore, that if we adhere to the traditional American formula of a rational classification having a nexus with the object of the impugned Act which is the destruction of the Municipal Bodies with 1971. It follows, therefore, that if we adhere to the traditional American formula of a rational classification having a nexus with the object sought to be achieved by the impugned statute, which is repeated and relied upon by the petitioners in these cases, we cannot but uphold the law on this point. But luckily this myopic American view was not only criticized as inadequate but was also departed from by our Supreme Court. Justice Bose in The State of West Bengal Vs. Anwar Ali Sarkar, characterized this view as tautological. In the same case Das, J., by laying down that an object of an Act alone cannot furnish a basis for classification departed from this traditional view. In other words this doctrine of a classification having rational nexus with object of the statute cannot save a classification, although it can scuttle it. It is this view which has been followed in D.S. Reddy Vs. Chancellor, Osmania University and Others, by our Supreme Court in the following words: -

"This is a clear case where the statute itself directs its provisions by enacting S. 13-A, against one individual, viz., the appellant; and before it can be sustained as valid, this Court must be satisfied that there is a reasonable basis for grouping the appellant as a class by himself ... Even assuming that the classification of these two types of persons as coming under two different groups can be made nevertheless, it is essential that such a classification must be founded on an intelligible differentia which distinguishes the appellant from the Vice Chancellor appointed under the Act .... It is also essential that the classification or differentia effected by the statute must have a rational relation to the object sought to be achieved by the statute ....."

In America the inadequacy of this traditional doctrine of classification has been noticed and remedied by developing the theory of inherently unreasonable classifications. (See Schwartz''s Rights of the Person para 474). 16 L Ed 2d 577, the American Supreme Court observed at page 580: -

"The Equal Protection Clause requires more of a State law than non discriminatory application within the class it establishes. It also imposes a requirement of some rationality in the nature of the class singled out ...."

It, therefore, follows that under the interpretation given to Article 14 of the Constitution by our Supreme Court, the classification, in order to be upheld as constitutional must be inherently rational and reasonable and must be based upon some intelligible differentia.

Applying the above tests laid down by the Supreme Court, we have to ask ourselves whether the classification made by Section 2 of Act No. 16 of 1979 of the Municipal bodies on the basis of the population in the year 1971 is a rational classification constitutionally valid. A municipal body, as we have already noted, cannot die. It can only be killed, not by an act of God, but only by an act of man. These affected Municipal bodies, therefore, like other Municipal bodies have a right to live on. Further, these Municipal bodies, as much as other Municipal bodies, are intended to subserve the needs of their inhabitants and fulfil the political ambitions of the local inhabitants. These Municipal bodies, as much as other Municipal bodies, are intended to subserve the needs of their inhabitants and fulfil the political ambitions of the local inhabitants. These Municipal bodies, as much as others, have to work as centres of political and social education. They are today working as well as any other Municipal bodies allowed to live on. There is, therefore, no intelligible distinction or differentiation that can be drawn between these Municipal bodies which are sentenced to die and those that are spared from the thrust of the legislative spear. The population of the 1971 census, whatever may be its relevance in the past, appears to us to be wholly irrelevant today for the purpose of putting an end to the lives of these vibrant useful flourishing bodies. In fact, population was never taken as the criteria for continuance of these Municipalities in 1965 Act. The question whether an exiting Municipality should or should not continue to exist can only be decided by considerations of its present position and importance. No reasonable body of persons acting however unreasonably can ever intelligently argue that a Municipal body hale and healthy today must be put out of existence because it did not have certain number of inhabitants about a decade back. The distinction which Section 2 of Act No. 16 of 1979 draws between the affected Municipalities and others is clearly therefore, not based upon any intelligible differentia that distinguishes the one from the other. Section 2 of Act No. 16 of 1979 is in reality and substance a sort of a bill of attainder passed by the Legislature to put an end to these Municipalities, all or some of which might have incurred, as suggested by the petitioners, the wrath of the Government. The utter disregard of the statute for the criteria judgment coupled with the fact of its total failure to explain rationally force us to this conclusion. In the arguments before us, the Government was wholly unable to advance any justifiable grounds in support of this invidious classification except saying that nothing tangible is lost by converting these Municipalities into Panchayats. The destruction of Municipalities involves the annihilation of not only political status but even constitutional rights which can never be repaired by the constitution of a Gram Panchayat. This argument of the Legislative Council of a State as nearly as one third shall be elected by the electorate consisting the members of the Municipalities, District Boards and such other local authorities in the State as the Parliament may by law specify. Under this article, a local area, like a Municipality, is invested with the status of a member of an electoral college for the purpose of elections to the Legislative Council. By converting these Municipalities into Gram Panchayats this right is extinguished. Further, advantages of Rent Control legislation would be available to the tenants. The very fact that the Government itself does not establish a Gram Panchayat in every place where there is a Municipality shows the utter ad hoc nature of the argument.

It is suggested that good faith and knowledge of the existing conditions on the part of the Legislature should be presumed and the action of the Legislature must be sustained on that basis. There cannot be any quarrel with the principle of presumption attaching itself to a duly passed legislative measure. But, we must remember what we are concerned with in this case is protection of the political rights of the inhabitants of the various Municipalities. The Supreme Court has declared in Nain Sukh Das and Another Vs. The State of Uttar Pradesh and Others, that the constitutional mandate not to discriminate against extends itself to political as well as to other rights. Securing political justice is one of the objects of the Constitution. We cannot, therefore, throw away the petitioners'' submissions merely on the basis of the rule of presumption. Further the Supreme Court in The State of Gujarat and Another Vs. Shri Ambica Mills Ltd., Ahmedabad and Another, observed: -

"Laws regulating economic activity would be viewed differently from laws which touch and concern freedom of speech and religion, voting, procreation, rights with respect to criminal procedure, etc. The prominence given to the equal protection clause in many modern opinions and decisions in America all show that the Court feels less constrained to give judicial deference to legislative judgment in the filed of human and civil rights than in that of economic regulation and that it is making a vigorous use of the equal protection clause to strike down legislative action in the area of fundamental human rights".

It, therefore, follows that the impugned Act being one calculated to destroy the political rights of the inhabitants of the various Municipalities, must be examined for its constitutionality more intensely. Particularly where the legislation complained of is a sort of ad hominem type of legislation ad hoc in nature it would be the paramount duty of this court to examine minutely the constitutional validity of such a legislation when challenged. At any rate as the Supreme Court has observed in Ram Krishna Dalmia Vs. Shri Justice S.R. Tendolkar and Others, : -

" ....While good faith and knowledge of the existing conditions on the part of a legislature are to be presumed, if there is nothing on the face of the law or the surrounding circumstances brought to the notice of the Court on which the classification may reasonably be regarded as based, the presumption of constitutionality cannot be carried to the extent of always holding that there must be some undisclosed certain individuals or corporations to hostile or discriminating legislation".

We, therefore, reject this submission. Mr. Babul Reddy, the learned counsel for the petitioner, made an attempt to suggest mala fides to the Hon''ble Minister for Panchayat Raj Sri Baga Reddy, as being responsible for bringing in this legislation. He said that in order to wipe out Zeheerabad Municipality out of existence on the ground that that Municipality has always voted for a non Congress party this legislation was enacted. But, we have not allowed Sri Babul Reddy to argue this point as Sri Baga Reddy has neither been made a party nor is it so easy to attribute mala fide to a legislative body.

We accordingly hold that there is no reasonable classification of these Municipalities, some allowed to live and others condemned to die. Accordingly, we declare Section 2 of Act NO. 16 of 1979as unconstitutional being violative of the rights of the Municipal bodies to equality under Article 14 of the Constitution.

Before parting with this case, we repeat what the Supreme Court said in Ram Prasad Narayan Sahi and Another Vs. The State of Bihar and Others, :-

"Legislation such as we have now before us is calculated to drain the vitality from the rule of law which our Constitution so unmistakably proclaims, and it is to be hoped that the democratic process in this country will not function along these lines".

12.Accordingly we allow all the Writ Petitioners, declaring Section 2 of Act No. 16 of 1979 as unconstitutional. Accordingly any order made or action taken on the basis of the impugned Act or the Ordinance that preceded it, by the concerned authorities at any time is hereby declared as void. We direct status quo ante as obtaining prior to the issuance of the ordinance maybe restored. The respondents shall pay the costs of these applications to the petitioners. Advocate''s fee Rs. 200 in each of the Writ Petitions.

The learned Advocate General makes an oral application for the grant of a certificate under Article 133 of the Constitution. But we do not think that there is any substantial question of law of general importance, which in our opinion requires to be decided by the Supreme Court, under Article 133 of the Constitution that arises in this case. Hence, the oral request for leave is rejected.

The learned Advocate General also requests for the grant of stay. This request is also rejected because there has been stay granted by this Court throughout till it was vacated on 27-12-1979 specifically for the purpose of enabling the Government to pay the employees their salaries. The order dated 27-12-1979 in part reads as follows: -

"In the interests of justice we feel it just and proper to vacate the interim stay to enable the employees to draw their salaries for the period till now on the assumption that there is no stay. The interim stay granted is accordingly vacated. These orders and any other steps taken will, however, be subject to the result of the main writ petition".

For these reasons, we see no valid or justifiable grounds to grant stay.

Petitions allowed.