Chapter V PROPERTY, CONTRACTS AND LIABILITIES

1. (1) Subject to any special reservation made or to any special conditions imposed by the Government, all property of the nature hereinafter in this section specified and situated within the city, shall vest in and be under the control of the Municipality, and with all other property which has already vested, or may hereafter vest in the Municipality, shall be held and applied by it for the purposes of this Act, that is to say,-
   • (a) all public gates, town-walls tank, wells, markets, slaughter houses, manure and night-soil depots and public buildings of every description which have been constructed or maintained out of the municipal fund;
   • (b) all public streams, tanks, reservoirs, cisterns, wells, springs, acquaducts, conduits, tunnels, pipes, pumps and other water works , and all bridges, buildings, engines, works materials and

things connected therewith or an appertaining there to, and also adjacent land not being private

property appertaining to any public tank or well;

1. (c) all public sewers and drains, and all sewers, drains, tunnels culverts, gutters and water courses in alongside or under any streets and all works materials and things appertaining thereto;
2. (d) all dust, dirt, dung, ashes, refuse, animal matter, or filth , night-soil or rubbish of any kind, collected by the Council or by any customary or private sweeper from the streets, houses, privies, sewers, cesspools or elsewhere ;
3. (e) all public lamps, lampposts and apparatus connected therewith or appertaining thereto;
4. (f) all public streets, not being land owned by the State Government and the pavement, stone and other material thereof and also trees growing on and erections, materials, implements and things provided for such streets;
5. (g) all land or other property transferred to the Council by the State Government or acquired by gift, purchase or otherwise for public purposes;

1. (2) The State Government may, b y notification, direct that any property which has vested in the Council shall cease to be so vested; and thereupon the property specified in the notification shall cease to be so vested, and the State Government may pass such orders as it thinks fir regarding the disposal and management of such property.
2. (3) The State Government may resume any immovable property transferred to the Council by itself or any other local authority, where such property is required for a public purpose, without payment of any compensation other than the amount paid by the Council for such transfer and the market value at the date of resumption of any building or works subsequently erected or executed thereon by the Council: Provided that before taking any such action, the State Government shall obtained take into consideration the view or objections of the Council;

Management of nazul lands.-(1) The nazul lands transferred to the Council by the State Government shall be managed in accordance with the bye-laws made by the Council with the previous approval of the State Government.

The Madhya Pradesh* Municipalities Act, 1961

*छ-ग- राजपत्र दिनााँक 24-08-2001 के अदिसूचना क्रमाांक 2458/2001 दिनााँक 30-06--2001 के अनुसार "म-प्र." के स्थान पर "छ.ग."।

1. (2) The Council may, with the previous approval of the State Government from time to time, add to vary or rescind the bye-laws, made under sub-section (1).

1. (1) When any land, whether within or without the limits of a Municipality, is required for the purposes of this Act and the Council is unable to acquire it by agreement the State Government , may at the request of the Council, proceed to acquire such land under the provisions of the Land acquisition Act, 1894(1 of 1894; and, on the payment b y the Council of the compensation awarded under that Act, and of any other charges incurred by the State Government in connection with the acquisition, the land shall vest in the Council. Explanation- When any land is required for a new street, or for the improvement of an existing

street, the Council may proceed to acquire , in addition to the land to be occupied by the street,

the land necessary for the sites of the buildings to be erected on the sides of the street, and such land shall be deemed to be required for the purposes of this Act.

1. (2) A Council shall not, without the previous sanction of the State Government, transfer any land which has been acquired for and vests in the Council under sub-section (10 or divert such land to a purpose other than the purpose for which it has been acquired.
2. (3) Notwithstanding any thing contained in the Indian Stamp Act, 1899 (II of 1899) , all instruments of transfer of land in favour of a Council for the purposes of this Act shall be exempt from payment of Stamp duty.

The Council may, with the sanction of State Government, transfer to the Central Government any property vested under

Formation of Municipal Fund and it shall be held in trust by Council.- There shall be formed for each municipality a Municipal Fund, and it shall be held by the Council in trust for the purposes of this Act, subject to the provision there in contained.

1. (a) all moneys received by or on behalf of the Council under the provisions of this Act or of any other law for the time being in force or under any contract;
2. (b) the balance, if any standing at the commencement of this Act, at the credit of the Municipal Fund;
3. (c) all proceeds of the disposal of property by, or on behalf of the Council;
4. (d) all rent accruing from any property of the Council;
5. (e) all moneys raised by any tax levied for the purposes of this act;
6. (f) all fees payable and levied under this Act;
7. (g) all moneys received by way of compensation or for compounding offences under the provisions of this Act;
8. (h) all moneys received by, or on behalf of the Council from the State Government or private individuals by way of grant or gift or deposits; and
   • (i) all interest and profits arising from any investment or from any transaction in connection with, any money belonging to the Council;

The Madhya Pradesh* Municipalities Act, 1961

*छ-ग- राजपत्र दिनााँक 24-08-2001 के अदिसूचना क्रमाांक 2458/2001 दिनााँक 30-06--2001 के अनुसार "म-प्र." के स्थान पर "छ.ग."।

1. (2) Nothing in this section of in this act shall affect any obligations of a Council arising from a trust legally imposed upon or accepted by a Council.
2. (3) A Council may, for the purpose of efficient discharge of any of the duties imposed upon it under clauses(d), (j) and (l) of section 123 by a resolution passed in that behalf, earmark for each such purpose a specified portion of its income every year for a specified number of years for being credited to a fund called the Public Utility Scheme Fund.

Application of Municipal property and fund.- (1) All property vested in Council under this Act, all funds received by it in accordance with the provisions of this Act, and all sums accruing to it under the provisions of any law for the time being in force, shall, subject to the provisions of this Act, be applied for the purposes of this Act, within the limits of the Municipality.

1. (2) Notwithstanding anything contained to sub-section (1), it shall be lawful; for a Council , subject to rules framed under this act:-
   • (a) to incur expenditure beyond the Municipal limits on the acquisition of land, or on the contraction , maintenance or repair of works, for the purpose of obtaining a supply of water required for the inhabitants of the Municipality or on providing the supply of electrical energy for the use of the inhabitant of the said Municipality or on establishing slaughter houses or places for the disposal of night soil or sewage or carcasses of animals or for drainage works , or for the purpose of providing mechanically propelled transport facilities for the convenience of the public or for to the purpose of setting up of diaries or parks for the supply, distribution and procuring of milk or milk product for the benefit of the inhabitants of the Municipality or for any other purpose calculated to promote the health, safety or convenience of the inhabitants of then said Municipality; or
   • (b) to make a contribution towards expenditure incurred by any other local authority or out of an public Fund for measures affecting to the health, instruction, safety or convenience of the public calculated to benefit the residents within the limits of the contributing Municipality or
   • (c) to create scholarship tenable outside the limits of the Municipality, or
   • (d) to utilize the Municipal fire brigade and other mechanical appliance beyond the Municipal limits ; or
   • (e) to make with the previous sanction of the State Government, any other kind of contribution as may be deemed necessary by the Council: Provided that nothing in this section or in any other provision of this act, shall be deemed to make it unlawful for a Council when it has constructed works beyond the limits of the Municipality for the supply of water or electrical energy or for drainage as aforesaid.-
   • (a) to supply or extend to or for the benefit of any person or building or lands in any place,

whether such place is or is not within the limits of the said Municipality, any quantity of water

of electrical energy not required for the purpose of this Act within the said Municipality or the advantages afforded by the system of drainage-works on such terms and conditions with regard to payment and to the continuance of such supply or advantages as shall be settled by agreement between the Council and such persons or the occupier or owner of such buildings or land, or

1. (b) to incur any expenditure on such terms with regard to payment as may be settled as aforesaid for the construction, maintenances, repair or change of any connection pipe or any electric supply lines or other works necessary for the purpose of such supply or for the extension of such advantages.

The Madhya Pradesh* Municipalities Act, 1961

*छ-ग- राजपत्र दिनााँक 24-08-2001 के अदिसूचना क्रमाांक 2458/2001 दिनााँक 30-06--2001 के अनुसार "म-प्र." के स्थान पर "छ.ग."।

Notwithstanding anything contained in Section 106, it shall be the duty of a Council to apply annually out of the Municipal fund first such as may be required for the payment of any amount falling due on any loan legally contracted by it.

(1) In places where there is a Government treasury or sub-treasury or a bank to which the Government treasury business has been made over, the Municipal fund shall be kept in such treasury, sub-treasury or bank.

1. (2) In places where there is no such treasury or sub-treasury or banks, the Municipal fund may, with the previous approval of the State Government, be deposited with any banker who furnishes such security for the safe custody and repayment on demand of the fund so deposited as the State Government may, in each case , think sufficient.
2. (3) A Council may, from time to time with the previous sanction of the State Government, invest any portion of its Municipal fund in securities of the Government of India or in such other securities, including fixed deposits in banks, as the State Government may approve in this behalf, and may vary such investments for others of the like nature; and the income resulting from the securities and proceeds of the sale of the same shall be credited to the Municipal Fund.
3. (4) Notwithstanding anything contained in sub-sections (1), (20 and (3), a Council shall maintain cash balance not less than such amount as may be prescribed by rules in the office for meeting the current charges and may recoup the same as and when such cash balance in depleted on account of expenditure therefrom.

No streets, land public places, drains or irrigation channels shall be sold, leased or otherwise alienated, save in accordance with such rules as may be made in this behalf.-

1. (2) Subject to the provisions of sub-section (1)-
   • (a) the Chief Municipal Officer may, in his discretion, grant a lease of any immovable property belonging to the Council, including any right of fishing or of gathering and taking fruits, flowers and then like, of which the premium or rent, or both, as the case may be, does not exceed two hundred and fifty rupees for any period not exceeding twelve months at a time: Provided that every such lease granted b y the Chief Municipal Officer, other than the lease of the class in respect of which the President-in-Council has by resolution exempted the Chief Municipal Officer from compliance with the requirements of this proviso, shall be reported by him to the President-in-Council within fifteen days after the same has been granted.
   • (b) with the sanction of the President-in-Council, the Chief Municipal Officer may, by sale or otherwise grant a lease of immovable property including any such right as aforesaid for any period not exceeding three years at a time of which the premium , or rent, or both, as the case may be, for any one year does not exceed one thousand five hundred rupees;
   • (c) with the sanction of the Council, the Chief Municipal Officer may lease, sell or otherwise convey any immovable property belonging to the Council.
2. (3) The sanction of the President-in-Council or of the Council under sub-section (2) may be given either generally for any class of cases or specially in any particular case: Provided that-
   • (i) no property vesting in the Council in trust shall be leased, sold or otherwise conveyed in a manner that is likely to prejudicially effect the purpose of the trust subject to which such property is held;

The Madhya Pradesh* Municipalities Act, 1961

*छ-ग- राजपत्र दिनााँक 24-08-2001 के अदिसूचना क्रमाांक 2458/2001 दिनााँक 30-06--2001 के अनुसार "म-प्र." के स्थान पर "छ.ग."।

1. (ii) no land exceeding fifty thousand rupees in value shall be sold or otherwise conveyed without the previous sanction of the State Government and every sale or other conveyance of property vesting in the Council shall be deemed to be subject to the conditions and limitations imposed by this Act or by any other enactment for the time being in force.

The contracts by or on behalf of the Council shall be expressed to be made by the Chief Municipal Officer in accordance with the rules made in this behalf. 111 to 113.

Cancellation or modification of arrangement binding permanently or for a number of years.- Where a Council has entered into any arrangement or made any promise, purporting to bind it or its successors for a number of years or for an unlimited period, to continue to any educational or charitable institutions, a yearly contribution from the Municipal property or fund, it shall be lawful for the Council or its successors with the sanction of the State Government to cancel such arrangement or promise, or to discontinue, or to diminish such yearly contribution:

Power of Council to borrow money.- Subject to the restrictions contained in any enactment relating to raising of loans by local authorities for the time being in force a Council

may, in pursuance of a resolution passed at a special meeting convened for the purpose, raise a

loan of any moneys required for carrying out the purpose of this Act: Provided that-

1. (i) no loan shall be raised without the previous sanction of the State Government ; and
2. (ii) the terms upon, the period within and the method by which the loan is to be raised and repaid, shall be subject to the approval of the State Government.

1. (1) The Chief Municipal Officer shall, on or before the first day of January each year, cause in the prescribed form and manner, to be prepared and laid before the finance committee and if there is no finance committee before the President-in-Council an estimate of the income and expenditure of the Council for the next financial year.
2. (2) The finance committee or the President-in-Council as the case may be, shall, as soon as may be, consider the budget estimates prepared by the Chief Municipal Officer and make such

modifications and additions there to as it shall think fit and submit the same to the Council not

later than the thirty-first day of January.

1. (3) the Council shall, as soon as may be consider the budget estimates as submitted by the Finance Committee or the President-in-Council as the case may be, and may adopt them without

any change or subject to such alternations as it may deem expedient and shall forthwith submit

the copies of the budget estimates as adopted by it to the prescribed authority and the State Government: Provided that no estimates shall be approved unless provisions is made there in for the council having at its credit at the end of the year a balance of not less than such amount as may be prescribed in this behalf.

The Madhya Pradesh* Municipalities Act, 1961

*छ-ग- राजपत्र दिनााँक 24-08-2001 के अदिसूचना क्रमाांक 2458/2001 दिनााँक 30-06--2001 के अनुसार "म-प्र." के स्थान पर "छ.ग."।

Provided further that if for any reasons the budget estimates could not be finally adopted by

the Council before 31 st day of March, as budget estimates.

1. (a) recommended by the Finance Committee or the President-in-Council as the case may be, or
2. (b) prepared by the Chief Municipal Officer, if the Finance Committee or President-in-Council has not considered the budget estimates, shall be deemed to be the budget estimates finally adopted by the Council until then estimates are so adopted. Provided also that if, in the opinion of the State Government, the condition of indebtedness of any Council is such that it is desirable to have control of the State Government over its budget the State Government may direct that the budget of such Council shall be subject to the prior sanction of the State Government and the power to vary or alter budget grants under section 117 and 118 shall be subject to such conditions as may be prescribed.

The Council may from time to time, during the financial year, transfer the amount or a portion of the amount of one budget grant from one major head to another in the budget estimate, or increase the amount of any budget grant, or make an additional budget grant for the purpose of meeting any special or unforeseen requirement arising during the said year, but not in such a way as to bring the estimated cash balance at the close of the year below the limit prescribed under the first proviso to sub-section (3) of section 116.

head to another in the budget estimate, or increase the amount of any budget grant, or make an

additional budget grant for the purpose of meeting any special or unforeseen requirement arising during the said year, but not in such a way as to bring the estimated cash balance at the close of the year below the limit prescribed under the first proviso to sub-section (3) of section 116.

(1) If any time during the financial year it appears to the Council that the income of the Municipal fund during the same year will not suffice to meet the expenditure sanctioned in the budget estimates of that year, it shall be incumbent on the Council forthwith to sanction any measure which they may consider necessary for proportioning the year’s income to the expenditure. (2) For the purposes of sub-section (1), the Council may either diminish the sanctioned expenditure of he year , so far as it may be possible so to do with due regard to all the requirements of this Act, or have reccurse, subject to the conditions and limitations prescribed by this Act, to supplementary taxation or to an increase of the rates, or adopt all or any of those methods.

1. (2) For the purposes of sub-section (1), the Council may either diminish the sanctioned expenditure of he year , so far as it may be possible so to do with due regard to all the requirements of this Act, or have reccurse, subject to the conditions and limitations prescribed by this Act, to supplementary taxation or to an increase of the rates, or adopt all or any of those methods.

The annual accounts of receipts and expenditure, and the budget when sanctioned, shall be open to public inspection free of charge and shall be published in

Quarterly abstracts of accounts-(1) The Chief Municipal Officer shall draw up a quarterly abstract of the receipt and expenditures of the preceding quarter and such abstract shall be examined by the prescribed authority.

1. (2) The abstract of the Municipal accounts drawn up under sub-section (1) shall be placed before the Council.
2. (3) For the purpose of examining the accounts by the Council, the Council shall have access to all the Municipal accounts and to all records and correspondence relating there to, and the Chief Municipal Officer shall furnish to the Council any explanation concerning the receipts and expenditure which it may call for.

The Madhya Pradesh* Municipalities Act, 1961

*छ-ग- राजपत्र दिनााँक 24-08-2001 के अदिसूचना क्रमाांक 2458/2001 दिनााँक 30-06--2001 के अनुसार "म-प्र." के स्थान पर "छ.ग."।

1. (4) Any Councillor may, with the permission of the President and in the presence of the Chief

Audit of Municipal Accounts-

1. (1) Notwithstanding anything contained in Section 3 of the Madhya Pradesh* Local Fund Audit Act, 1933 (IX of 1933), the annual accounts of every Council shall be subject to audit under the said Act and the Council shall be liable to pay such audit fee as the State Government may from time to time, specify in this behalf.
2. (2) Copies of the Audit Report of the Auditor on the annual account of the Council under sub- section (1) shall be furnished to the State Government or such other authority as may be specified by the State Government in this behalf in addition to the President and Chief Municipal Officer.
3. (3) If the accounts of the Council are not audited under the sub-section (1) by the Local Fund

Municipal authorities to remedy defects and report.

1. (1) The Council or the Chief Municipal Officer, as the case may be, shall forthwith remedy any defects or irregularities that may be communicated by the prescribed authority or Local Fund Audit Department or the outside auditing agency, as the case may be, and shall send a report to the State Government directly or through such authority as the State Government may prescribe, of the action taken by the Municipal authorities concerned within a period of three months from the date of receipt of the Audit Report: Provided that if there is difference of opinion between the Municipal authorities and the prescribed authority or the Local Fund Audit Department, or if the Municipal authority does not remedy any defect or irregularity within the said period of three months, the matter shall be referred to the State Government within such time and in such manner as may be prescribed by rules, and the State Government may pass such orders thereon as it thinks fit. The orders of the State Government shall be final and the Municipal authorities shall take action in accordance therewith.
2. (2) If within any period fixed by an order made by the State Government under sub-section (1), the Municipal authority concerned fails to comply with such orders, the provisions relating to defaults contained in Section 327, shall with all necessary modifications, be deemed to apply to this case and the State Government shall act accordingly. 122-A.-Social Audit.- Notwithstanding anything contained in this Act, the Council shall arrange for Social Audit in such manner as may be prescribed by the State Government.

The Madhya Pradesh* Municipalities Act, 1961

*छ-ग- राजपत्र दिनााँक 24-08-2001 के अदिसूचना क्रमाांक 2458/2001 दिनााँक 30-06--2001 के अनुसार "म-प्र." के स्थान पर "छ.ग."।