The Municipality shall, for the purposes of this Act, have the power to power to acquire

Direction and control 67. The State Government may, at any time, require any Power of State Municipal Authority- Government to call for records

1. (a) to produce any record, correspondence, or other documents, etc.
2. (b) to furnish any return, plan, estimate, statement, accounts, or statistics, and
3. (c) to furnish or obtain any report, and thereupon such municipal authority shall comply with such requirement. 68. The State Government may depute any of its officers to inspect or examine Power of State any department, office, service, work or property of the Municipally and to report Government to thereon, and such officer may, for the purpose of such inspection or Depute officers to examination, exercise all the powers of the State Government under section 67 : make inspection or examination and Provided that such officer shall be not below the report. rank of-
4. (a) a Deputy Secretary to the State Government in the case of a Class 'A Municipal Council or Class ,B, Municipal Council, and
5. (b) a Sub-divisional Officer in the case of a Class .C, Municipal council or Nagar panchayat, as the case maybe. 69. If, after considering the records required under section 67, or the report Power of State under section 68, or any information received otherwise by the State Government to Government, the State Government is of opinion that- require Municipal Authorities to take
6. (a) any action taken by a municipal authority is unlawful or irregular or any action. duty imposed on such authority by or under this Act has not been performed or has been performed in an imperfect, insufficient or unsuitable manner, or
7. (b) adequate financial provision has not been made for the performance of a-y under this Act, the State Government may, by order require such municipal authority to regularize such unlawful or irregular action or perform such duty or restrain such authority from taking such unlawful or irregular action or direct such authority to make, to the satisfaction of the State Government, within such period as may be specified in the order, arrangement, or financial provision, as the case maybe, for the proper performance of such duty: Provided that the State Government shall, unless in its opinion the immediate execution of such order is necessary before making an order under this section, give such municipal authority, in writing, an opportunity of show cause, within such period as may be specified by the State Government, why such order should not be made. 70. (1) If no action has been taken in accordance with the order under section Power of State 69 within the period specified therein or if no cause has been shown under the Government to provision to that section or if the cause shown is not to the satisfaction of the provide for State Government, the State Government may make arrangements for the enforcement of order taking of such action and may direct that all expenses connected therewith shall under section 69. be defrayed from the Municipal Fund.

1. (2) For the purposes of sub-section (1), it shall be lawful for the State Government to appoint, for such period as the State Government may thinks fit, any person considered suitable by it, who shall exercise and perform, subject to such directions as the State Government may issue from time to time, all or any of the powers and functions of the municipal authorities necessary to implement the order under section 69. 71 (1) If no action has been taken in accordance with the order under section 69 Power of State within the period specified therein or if no cause has been shown under the Government to provision to that section or if the cause shown is not to the satisfaction of the dissolve State Government, the State Government may make arrangements for the Municipality. taking of such action and may direct that all expenses connected therewith shall be defrayed from the N4uniciPal Fund.
2. (2) For the purposes of sub-section (I), it shall be lawful for the State Government to appoint, for such period as the State Government may thinks fit, any person considered suitable by it, who shall exercise and perform, subject to such directions as the State Government may issue from time to time, all or any of the powers and functions of the municipal authorities necessary to implement the order under section 69.(1) Il in the opinion of the State Government, the Municipality has shown its incompetence, or has persistently made default in the performance of the duties, or in the exercise of the functions, imposed on it by or under this Act or any other law for the time being in force or has or abused its powers, or is unable to function under the provisions of this Act, the State Government may, subject to the provisions of subsection (2), by an order published in the Official Gazette, and stating the reasons therefore’ declare the Municipality to be incompetent or in default or to have exceeded or abused its powers, as the case may be, and with effect from such date’ as may be specified in the order.
3. (2) (a) before making any order under subsection (1), a notice shall be given by the State Government to the Municipality calling upon it to submit representation, if any, against the proposed order within such period as may be specified in the notice.
   • (b) on receipt of such representation, if any, the State Government shall constitute a committee consisting of five persons, nominated by the State Government, of whom-
     • (i) one shall be a member of the State Higher Judicial Service who shall be the Chair-Person of the committee,
     • (ii) one shall be the Chief Councillor of any other Municipality of the same class,
     • (iii) one shall be a Chartered Accountant or adperson having experience in financial matters,
     • (iv) one shall be an Engineer or Architect ‘and
     • (v) one shall be an officer of the State Government, not below the rank of a Sub-divisional Officer, and shall forward the representation to the committee for its consideration and report within such time as the State Government may specify,
   • (c) the State Government shall, on receipt of the report from the committee, consider the representation: Provided that notwithstanding anything contained in subsection (I), no order of dissolution of the Municipality shall be made without giving the Municipality an opportunity of being heard. 72. (1) Notwithstanding anything contained in this Act or in any other law for the Consequences of time being in force, with effect from the date of the order of dissolution under dissolution. sub-section (I) of section-71.
   • (a) all the councillors including the members of the Empowered Standing Committee and of any committee of the Municipality constituted under this Act, and the Chief Councillor and the Deputy Chief Councillor shall vacate their respective offices, and
   • (b) all the powers and duties which, under the provisions of this Act or the rules or the regulations made there under or any other law of the time being in force, may be exercised or performed Standing by the members of the Empowered Standing Committee or of any committee of the Municipality or the Chief Councillor, shall be exercised or performed, subjects to such directions as the State Government may give from time to time, by such person or persons as the State Government may appoint in this behalf: Provided that when the State Government appoints more than one person to exercise any powers or perform any duties, it may, by order, and in such manner as it thinks fit, allocate such powers and duties among the persons so appointed: Provided further that the State Government shall be the remuneration of such person or persons, and may direct that such remuneration shall, in each case, be paid out of the Municipal Fund.
4. (2) For the avoidance of doubts, it is hereby declared that an order of dissolution under subsection (1) of section -7i shall not effect or imply in any way the dissolution of the Municipality as a body corporate. Chapter-IX Municipal finance and Municipal Fund 73. After taking into consideration the recommendations of the State Finance Implementation of Commission constituted under article 243 -Y, read with article 243 -I, of the recommendations of Constitution of India, the State Government shall determine- State Finance a. the devolution of net proceeds of the taxes, tolls Finance and fees to the Commission Municipalities, b. the assignment of taxes, duties, tolls and fees to the Municipalities, c. the sanction of grants-in-aid to the Municipalities from the Consolidated fund of the State, and d. the other measures required to improve the financial position of the Municipalities. 74. (1) The State Government may, from time to time, give grants or financial Financial Assistance assistance to the Municipality with or without direction as to the manner in which from State such grants or financial assistance shall be applied. Government.
5. (2) The State Government may, for giving such grants or assistance, lay down a scheme which may include the conditions of release of Municipalities into different classes for that purpose.
6. (3) The State Government may, give grants to the Municipality for implementation, in full or in part, of any scheme included in the annual development plan of the Municipality. 75. (1) There shall be a fund to be called the Municipal Fund which shall be held Municipal Fund. by the Municipality in trust for the purposes of this Act, and all moneys realized or realizable under this Act and all moneys otherwise received by the Municipality shall be credited thereto.
7. (2) Subject to such directions as the State Government may issue. in this behalf and keeping in view, the classification of municipal areas under section -7, the receipts and expenditures of the Municipality shall be kept under such heads of accounts, including those for water-supply, drainage and sewerage, solid waste management, road development and maintenance, slum services, commercial projects and other account heads as may be specified and the general account head, in such manner, and in such form, as may be prescribed, so as to facilitate the imposition of user charges and preparation of any subsidy report under this Act. Explanation. - For the purposes of this section, "commercial projects" shall include municipal markers, development projects, property development projects, and such other projects of a commercial nature as may be specified by the Municipality from time to time.
8. (3) Every head of account specified under sub-section (1) shal1 be split up into a revenue account and a capital account and all items of receipts and expenditures shall be kept appropriately under such revenue account or capital account, as the case maybe. Chapter-X Application of Municipal fund Application of 76. The moneys credited to the Municipal fund from time to time shall be applied Municipal Fund. for payment of all sums, charges and costs necessary for carrying out the purposes of this Act and the rules and the regulations made there under and for payment out of the Municipal Fund under any other 1aw for the time being in force. 77. No payment of any sum out of the Municipal fund shall be made unless such Payments not to be expenditure is covered by a current budget grant and a sufficient balance of made out of such budget grant is available, notwithstanding any reduction or transfer thereof Municipal Fund under the provision or transfer under the provisions of this Act: unless Covered by Provided that this section shall not apply to any payment in the following cases:- Budget grant.
   • (a) refund of taxes and other moneys which are authorized by this Act,
   • (b) repayment of moneys belonging to contractors or other persons and held in deposit and ail moneys collected by the Municipality or credited to the Municipal Fund by mistake,
   • (c) temporary payment for works urgently required byte State Government in the public interest,
   • (d) expenses incurred by the Municipality on special measures on the outbreak of dangerous diseases, natural or technological hazards or in any other emergent case,
   • (e) sums payable as compensation under this Act or the rules or the regulations made there under,
   • (f) sums payable- i. under orders of the State Government on failure of the Municipality to take any action required by the State Government under any provision of this Act, ii. under any other law for the time being in force, iii. under the decree or order of a civil or criminal court against the Municipality, or iv. under a compromise of any claim, suit or other legal proceeding, or v. on account of the cost incurred in taking immediate action by any of the n:,unicipal authorities to avert a sudden threat or danger to the property of municipality or of human life, and
   • (g) such other cases as may be determined by regulations. 78. Whenever any sum is paid in any of the cases referred to in the provision of Procedure when section-77, the Chief Municipal Executive Officer/ Municipal Executive Officer money not covered shall forthwith communicate the circumstances of such payment to the by budget grant. Empowered Standing Committee, and, thereupon, the Empowered Standing Committee may take, or recommend to the Municipality to take, such action under the provisions of this Act as may appear to it to be feasible and expedient for covering tire amount of such payment. 79. (1) On a requisition, in writing, by the State Government, the Empowered Temporary Payment Standing committee may, at any time, retired the Chief Municipal Executive from Municipal Fund Officer/ Municipal Executive Officer to undertake the execution of any work for works Urgently certified by the State Government to be urgently required in the public interest required in public and, for this purpose, to make payment for such work from the Municipal Fund interest. in so far as such payment be made without unduly interfering with the regular work of the Municipality.
9. (2) The cost of all work so executed, and the proportionate establishment charges for executing such work, shall be paid by the State Government and credited to the Municipal Fund.
10. (3) On receipt of a requisition under sub-section (1), the Empowered Standing Committee shall forthwith forward a copy thereof to the Municipality together with a report of the steps taken in pursuance of the said requisition. 80. Notwithstanding anything contained elsewhere in this chapter, the Municipality may, with the approval of the State Government, authorize Power to incur expenditure to be incurred beyond the limits of the municipal area for creation of Expenditure beyond physical assets relating to the core functions of the Municipality outside the the limits of limits of such municipal area and for maintenance thereof for carrying out the Municipality. purposes of this Act. 81. (1)Notwithstanding anything contained elsewhere in this chapter, the State Government may, by order, require the Municipality to earmark a particular portion of the Municipal Fund or a particular grant or apart thereof, or any item of Exclusive use of receipt under any head of account, or any percentage thereof, or any share of Fund for particular tax receivable by the Municipality other than taxes, duties and fines assigned to purpose. the Municipality under this Act or any part thereof, to be utilized exclusively for such purpose related to municipal functions as may by specified by the State Government, and it shall be the duty of the Municipality to act accordingly.
11. (2) The State Government may, for carrying out the purposes of sub- section (1), make rules for different classes of Municipalities. 82. Subject to the other provisions of this Act, payment from the Municipal Fund Operation of shall be made in such manner as may be determined by regulations, and the accounts. heads of accounts referred to in section-75 shall be operated by such officers of the Municipality as may be authorized by the Municipality by regulations. 83. (1) Surplus moneys standing at the credit of any of the heads of account of the Municipal Fund which are not required, either immediately or at any early date, to be applied for the purposes of this Act by the Municipality, may, in Investment of accordance with such regulations as may be made by the Municipality in this surplus moneys. behalf be transferred by the Municipality, either in whole or in part, to any other head of account of the Municipal Fund: Provided that no such money shall be transferred permanently from any of the heads of accounts to any other head of account without the previous approval of the Municipality: Provided further that such surplus moneys standing at the credit of the Commercial Projects Account of the Municipal Fund shall not be transferred to the General Account of the municipal Fund.
12. (2) Surplus moneys which are not transferred under sub-section (1) may be invested in public securities or small savings schemes, approved by the State Government, or deposited at interest with such scheduled bank as may be determined by the Empowered Standing Committee.
13. (3) Profit or loss, if any, arising from the investment as aforesaid shall be credited or debited, as the case may be, to the account to which such profit or loss relates. Chapter-XI Budget Estimates 84. (1) The Chief Municipal Executive Officer/ Municipal Executive Officer shall Preparation of prepare in each year a budget estimate along with an establishment schedule of budget Estimate of the Municipality for the ensuing year, and such budget estimate shall be an Municipality. estimate of the income and expenditure of the Municipality.
14. (2) Subject to the provisions of section 10 and subsection (2) of section 75, the budget estimate shall separately state the income and the expenditure of the Municipality to be received and incurred in terms of the various heads of accounts.
15. (3) The budget estimate shall state the rates at which various taxes, surcharges, cesses and fees shall be levied by the Municipality in the year next following.
16. (4) The budget estimate shall state the amount of money to be raised as loan during the year next following.
17. (5) The Chief Councillor shall present the budget estimate to the Municipality on the 15th day of February in each year or as soon thereafter as possible.
18. (6) The budget estimate shall be prepared, presented and adopted in such Form and in such manner, and shall provide for such matters, as may be prescribed.
19. (7) The annual statements prepared under sub-section (2) of section 107 and sub-section (1) of section 1 19 together with the reports prepared under subsection(1) of section 85 and under sub-section (2) of section 278 shall be enclosed with the budget estimate. 85. (1) Tire Chief Municipal Executive Officers/ Municipal Executive Officer shall, Report on Services while preparing the budget estimate, append thereto a report indicating whether Provided at the following services are being provided at a subsidized rate and, if so, the Subsidized extent of the subsidy, the reasons therefore, the source from which the subsidy Rate. is being met, and the sections or categories of the local population who are the beneficiaries of such subsidy, namely:-
    • (a) water-supply and disposal of sewage, and
    • (b) Scavenging, transporting and disposal of solid wastes. Explanation.-A service shall be construed as being provided at a subsidized rate if its total cost, comprising the expenditure on operation and for debt serving, exceeds the income relating to the rendering of that service.
20. (2) The Empowered Standing Committee shall examine the report referred to in sub-section (1) and place the same before the Municipality with its recommendations, if any. 86. (1) The Municipality shall consider the budget estimate and the Sanction of budget recommendations, if any of Empowered Standing Committee thereon, and shall, Estimate of by the fifteenth day of N{arch in each year, adopt the budget estimate for the Municipality. ensuing year with such changes as it may consider necessary, and submit the budget estimate so adopted to the Director of Local Bodies.
21. (2) The budget estimate received by the Director of Local Bodies, as the case may be, under subsection (1) shall be returned with or without modifications of the provisions relating to subventions by the State Government.
    • (d) Cause physical verification of any stock of articles in course of examination of accounts.
22. (4) The Auditor, or the officer subordinate to him, may report any item of accounts contrary to the provisions of this Act to the Empowered Standing Committee.
23. (5) The Empowered Standing Committee shall consider the report of the Auditor as early as possible and shall, if necessary take prompt action thereon, and shall also, if necessary surcharge the amount of any illegal any person responsible therefore the amount of any deficiency or loss incurred by the negligence or misconduct of such person or any amount which ought to have been, but is not, brought into account by such person, and shall, in every such case, certify the amount due from such person: Provided that any person aggrieved by an order of payment of certified sums any appeal to the State Government whose decision on such appeal shall be final.
24. (6) Any person who wilfully neglects, or refuses to comply with, the requisition made by an Auditor, or the officer subordinate to him, shall, on conviction by a Court, be punishable with fine in respect of item included in the requisition. The fine may be fixed by the Govt. from time to time. 94. (1) As soon as practicable after the completion of audit of the accounts of ~~ Audit report. the Municipality, but not later than the thirtieth day of September each year, the Auditor shall prepare a report of the accounts audited and examined and shall send such report to the Chief Municipal Executive Officer/ Municipal Executive Officer.
25. (2) The Auditor shall include in such report a statement showing. a. every payment which appears to the Auditor to be contrary to law. b. the account of any deficiency or loss, which appears to have been caused by gross negligence or misconduct of any person. c. the account of any sum received which ought to have been, but has not been, brought into account by any person, and d. any other material impropriety or irregularity in the accounts. 95.(1) The chief Municipal Executive officer/ Municipal Executive officer shall placing of Audited place the audited financial statement, the balance sheet and the report of the Accounts before Auditor and his comments thereon before the Empowered Standing Committee Municipality. which, after the examination thereof, shall place them before the Municipality with its comments" if any.
26. (2) The Chief Municipal Executive Officer/ Municipal Executive Officer shall remedy any defect that has been pointed out by the Auditor in his report. 96. (1) The Chief Municipal Executive Officer/ Municipal Executive Officer shall, Submission of after adoption of the financial statement and the balance sheet and the report of audited Accounts. the Auditor by the municipality, forward the same to the State Government together with a report of the action taken thereon by the Municipality and shall also send copies thereof to the Auditor.
27. (2) If there is any difference of opinion between the Auditor and the Municipality or if the Municipal does not remedy the defects or the irregularities mentioned in the report of the Auditor within a reasonable period, the Auditor shall refer the matter to the State Government whose decision thereon shall be final and binding. 97. If any order made by the State Government under this chapter is not Power of State complied with, it shall be lawful for the State Government to take such steps as Government to it thinks fit to secure the compliance of the order and to direct that all expenses enforce order upon therefore shall be defrayed from the Municipal Fund. audit report. 98. In addition to the audit of annual accounts' the State Government or the Special audit. Municipality may if it thinks fit appoint an Auditor to conduct special audit pertaining to a specified item or series of items requiring thorough examination, and the procedure relation to audit shall apply mutatis mutandis to such special audit. 99. The State Government or Municipality may provide for internal audit of the Internal audit. day to day accounts of the Municipality by the auditor appointed in this behalf by the State Government in the manner as may be prescribed. 100. (1) The Municipality shall, at its first meeting in each year or as soon as Municipal Accounts may be at any meeting subsequent thereto, constitute a Municipal Accounts Committee. Committee.
28. (2) The Municipal Accounts Committee shall consist of- a. such number of members, not being less than 3 and not more than 5 as the Municipality may determine, to be elected by the Councillors not being the members of the empowered Standing Committee, from amongst themselves and b. such number of persons, not being Councillors or officers or other employees of the Municipality and not exceeding two in numbers, having knowledge in financial matters, as may be nominated by the Municipality.
29. (3) The members of the Municipal Accounts Committee shall elect from amongst themselves one member to be its Chairperson.
30. (4) Subject to the other provisions of this Act the members of the Municipal Accounts Committee shall hold office until a new Municipal Accounts Committee is constituted.
31. (5) The manner of submission of resignation by the Chairperson or any other member, and the manner of filling up of a casual vacancy in the office of a member, of the Municipal accounts Committee shall be such as may be prescribed.
32. (6) Subject to the provisions of this Act and the rules and the regulations made thereunder it shall be the duty of the Municipal Accounts Committee-
    • (a) to examine the accounts of the Municipality showing the appropriation of sums granted by the Municipality for its expenditure and the annual financial accounts of the Municipality,
    • (b) to examine and scrutinize the report on the accounts of the Municipality by the Auditor appointed under section 92 and to satisfy itself that the moneys shown in the accounts as having been disbursed were available for, and applicable to, the services or purposes to which they were applied or charged and that the expenditure was incurred in accordance with the authority governing such expenditure,
    • (c) to submit report to the Municipality every year and from time to time on such examination and scrutiny,
    • (d) to consider the report of the Auditor appointed under section 98 in cases where the State Government or the municipality requires him to conduct a special audit of any receipt or expenditure of the Municipality or to examine the accounts of stores and stocks or the Municipality or to check the inventory of the properties of the Municipality including its land holdings and buildings ; and
    • (e) to discharge such other functions as may be prescribed.
33. (7) The Municipal Accounts Committee may call for any book or document if, in its opinion, such book or document is necessary for its work and may send for such officers of the Municipality as it may consider necessary for explaining any matter in connection with its work.
34. (8) The manner of transaction of business to the Municipal Accounts Committee shall be such as may be determined by regulations : Provided that the persons nominated under clause (b) of sub-section (2) shall not have the right to vote at the meeting of the Municipal Accounts Committee. Chapter-XIll Municipal Property

. h s : and hold. acquire, by gift, purchase or otherwise, and hold, movable and immovable properties or any interest therein, whether within or outside the limits of the municipal area.