Chapter XVI PROVISIONS FOR CONVERSION OF 1[PANCHAYAT AREA INTO A SMALLER URBAN AREA]1 AND FOR AMALGAMATION AND DIVISION OF 1[SMALLER URBAN AREAS]1, ETC

[Content provided in document header: Interpretation.] For the purposes of this Chapter, unless the context otherwise requires, the expression — (a) “municipal council” includes an administrator or officer appointed to exercise the powers and to perform the functions of a municipal council under section 315 or 316; (b) Grama Panchayat includes a person or persons appointed to exercise the powers and to perform the functions of a Grama Panchayat in sections 8, 117, 118 and 268 of the Karnataka Panchayat Raj Act, 1993.

[Content provided in document header: Effect of conversion of panchayat area into smaller urban area.] When any local area ceases to be a Panchayat area by virtue of a notification under section 4 of the Karnataka Panchayat Raj Act, 1993, and is declared to be smaller urban area under section 3 of this Act (hereinafter in this section referred to as the smaller urban area) with effect from the day on which such local area is declared to be a smaller urban area (hereinafter in this section referred to as the said date), the following consequences shall ensue, namely:— (a) the Grama Panchayat of such local area (herein referred to as the panchayat) shall cease to exist or to function; (b) there shall be constituted for the smaller urban area an interim municipal council consisting of persons vacating office as members of the Grama Panchayat and the Adhyaksha and Upadhyaksha of the Grama Panchayat shall, respectively, be deemed to be the president and vice-president of the interim municipal council; (c) the unexpended balance of the Grama Panchayat Fund and the property (including arrears of rates, taxes and fees) belonging to the panchayat and all rights and powers which prior to such notification, vested in the panchayat or in the Government during dissolution of the Grama Panchayat under section 268 of the Karnataka Panchayat Raj Act, 1993, as the case may be, shall, subject to all charges and liabilities affecting the same, vest in the interium municipal council as the municipal fund until the new municipal council is constituted in pursuance of the provisions of section 11; (d) any appointment, notification, notice, tax, order, scheme, licence, permission, rule, bye-law or form made, issued, imposed or granted under the Karnataka Panchayat Raj Act, 1993, immediately before the said date in respect of such local area shall continue in force and be deemed to have been made, issued, imposed or granted in respect of the smaller urban area until it is superseded or modified by any appointment, notification, notice, tax, order, scheme, licence, permission, rule, bye-law or form made, issued, imposed or granted under this Act; (e) all budget estimates, assessments, assessment lists, valuations or measurements made or authenticated under the Karnataka Panchayat Raj Act, 1993, immediately before the said date in respect of such local area shall be deemed to have been made or authenticated under this Act; (f) all debts and obligations incurred and all contracts made by or on behalf of the panchayat immediately before the said date and subsisting on the said date shall be deemed to have been incurred or made by the municipal council in exercise of the powers conferred on it by this Act; (g) all officers and servants in the employ of the panchayat immediately before the said date shall be officers and servants of the municipal council under this Act and shall, until other provision is made in accordance with the provisions of this Act, receive salaries and allowances and be subject to the conditions of service to which they were entitled or subject on such date: Provided that it shall be competent to the municipal council, subject to the previous sanction of the Director of Municipal Administration, to discontinue the services of any officer or servant who, in its opinion, is not necessary or suitable to the requirements of the municipal service, after giving such officer or servant such notice as is required to be given

[Content provided in document header: Term of office of members of interim municipal council and their powers.] (1) The Government shall, within a period not exceeding six months from the date on which the interim municipal council has been constituted, take steps in accordance with section 11 for the purpose of determining the number of councillors of, and for holding elections for, a new municipal council. (2) The councillors of the interim municipal council shall hold office until the date immediately preceding the date of the first meeting of the new municipal council. (3) Any vacancy in the office of the interim municipal council shall be filled as soon as conveniently may be, by appointment by the Government. (4) All arrears of rates, taxes and fees, vesting in the interim municipal council shall, notwithstanding that such rates and fees cannot be levied under this Act, be recoverable in the same manner as a tax recoverable under chapter VII. (5) In other respects the provisions of this Act shall mutatis mutandis apply to the interim municipal council and its councillors.

[Content provided in document header: Effect of absorption of panchayat area into smaller urban area.] (1)— Notwithstanding anything contained in this Act, if any local area ceases to be a panchayat area by virtue of a notification under section 4 of the Karnataka Panchayat Raj Act, 1993 (hereinafter in this section referred to as the said local area), and is absorbed in a smaller urban area the following consequences shall ensue, namely:— (a) the unexpended balance of the Grama Panchayat Fund and the property (including arrears of rates, taxes and fees) belonging to the Grama Panchayat of the said local area (hereinafter referred to as the panchayat) and all rights and powers which prior to such notification, vested in the panchayat shall, subject to all charges and liabilities affecting the same, vest in the municipal council of such smaller urban area (herein referred to as the municipal council) as the municipal fund; (b) any appointment, notification, notice, tax, order, scheme, licence, permission, rule, bye-law or form, made, issued, imposed or granted under the Karnataka Panchayat Raj Act, 1993, immediately before the said date in respect of the said local area shall continue in force and be deemed to have been made, issued, imposed or granted in respect of such smaller urban area until it is superseded or modified by any appointment, notification, notice, tax, order, scheme, licence, permission, rule, bye-law or form, made, issued, imposed or granted under this Act; (c) all budget estimates, assessments, assessment lists, valuations or measurements, made or authenticated under the Karnataka Panchayat Raj Act, 1993, immediately before the said date in respect of the said local area shall be deemed to have been made or authenticated under this Act; (d) all debts and obligations incurred and all contracts made by or on behalf of the panchayat immediately before the said date and subsisting and on the said date shall be deemed to have been incurred and made by the municipal council in exercise of the powers conferred on it by this Act; (e) all officers and servants in the employ of the panchayat immediately before the said date shall be officers and servants of the municipal council under this Act and shall, until other provision is made in accordance with the provisions of this Act, receive salaries and allowances and be subject to the conditions of service to which they were entitled or subject on such date: Provided that it shall be competent to the municipal council, subject to the previous sanction of the Government, to discontinue the services of any officer or servant, who, in its opinion, is not necessary or suitable to the requirements of the municipal service after giving such officer or servant such notice as is required to be given by the terms of his employment and every officer or servant whose services are disposed with shall be entitled to such leave, pension, provident fund and gratuity as he would have been entitled to take or receive on being invalided out of service as if the panchayat, in the employ of which he was, had not ceased to exist; (f) all proceedings pending at the said date before the panchayat shall be deemed to be transferred to and continued by the municipal council; (g) all appeals pending before any authority shall, so far as may be practicable, be disposed of as if the said local area had been included in the smaller urban area when they were filed; (h) all prosecutions instituted by or on behalf of the panchayat and all suits or other legal proceedings instituted by or against the panchayat or any officer of the panchayat pending at the said date shall be continued by or against the municipal council as if the said local area had been included in the smaller urban area when such prosecutions, suits or proceedings were instituted; (i) all arrears of rates, taxes and fees, vesting in the municipal council shall, notwithstanding that such rates, taxes, and fees cannot be levied under this Act, be recoverable in the same manner as a tax recoverable under Chapter VII; (j) until the reconstitution of the municipal council in accordance with the provisions of this Act, notwithstanding anything to the contrary contained in this Act, one person ordinarily

[Content provided in document header: Effect of absorption of a part of a panchayat area into a smaller urban area.] (b) any appointment, notification, notice, tax, order, scheme, licence, permission, rule, bye-law or form, made, issued, imposed or granted under the Karnataka Panchayat Raj Act, 1993, immediately before the said date in respect of the said local area shall continue in force and be deemed to have been made, issued, imposed or granted in respect of such smaller urban area until it is superseded or modified by any appointment, notification, notice, tax, order, scheme, licence, permission, rule, bye-law or form, made, issued, imposed or granted under this Act; (c) all budget estimates, assessments, assessment lists, valuations or measurements, made or authenticated under the Karnataka Panchayat Raj Act, 1993, immediately before the said date in respect of the said local area shall be deemed to have been made or authenticated under this Act; (d) all debts and obligations incurred and all contracts made by or on behalf of the panchayat immediately before the said date and subsisting and on the said date shall be deemed to have been incurred and made by the municipal council in exercise of the powers conferred on it by this Act; (e) all officers and servants in the employ of the panchayat immediately before the said date shall be officers and servants of the municipal council under this Act and shall, until other provision is made in accordance with the provisions of this Act, receive salaries and allowances and be subject to the conditions of service to which they were entitled or subject on such date: Provided that it shall be competent to the municipal council, subject to the previous sanction of the Government, to discontinue the services of any officer or servant, who, in its opinion, is not necessary or suitable to the requirements of the municipal service after giving such officer or servant such notice as is required to be given by the terms of his employment and every officer or servant whose services are disposed with shall be entitled to such leave, pension, provident fund and gratuity as he would have been entitled to take or receive on being invalided out of service as if the panchayat, in the employ of which he was, had not ceased to exist; (f) all proceedings pending at the said date before the panchayat shall be deemed to be transferred to and continued by the municipal council; (g) all appeals pending before any authority shall, so far as may be practicable, be disposed of as if the said local area had been included in the smaller urban area when they were filed; (h) all prosecutions instituted by or on behalf of the panchayat and all suits or other legal proceedings instituted by or against the panchayat or any officer of the panchayat pending at the said date shall be continued by or against the municipal council as if the said local area had been included in the smaller urban area when such prosecutions, suits or proceedings were instituted; (i) all arrears of rates, taxes and fees, vesting in the municipal council shall, notwithstanding that such rates, taxes, and fees cannot be levied under this Act, be recoverable in the same manner as a tax recoverable under Chapter VII; (j) until the reconstitution of the municipal council in accordance with the provisions of this Act, notwithstanding anything to the contrary contained in this Act, one person ordinarily resident in the local area absorbed in the smaller urban area who is nominated by the Government shall be an additional councillor of the municipal council. If any part of an area within the limits of a Grama Panchayat is included in a smaller urban area, then, notwithstanding anything contained in this Act or in the Karnataka Panchayat Raj Act, 1993, but subject to the provisions of sub-section (3) of Section 4 of this Act, the following consequences shall ensue, namely:— (a) so much of the Grama Panchayat Fund and other property vesting in the Grama Panchayat shall be transferred to the Municipal Fund as the Deputy Commissioner may, by order in writing, direct; (b) the rights and liabilities of the Grama Panchayat in respect of civil and criminal proceedings, contracts, and other matters or things (including arrears of taxes, fees and cess) arising in or relating to any part of the area included in the smaller urban area shall vest in the municipal council; and such rights and liabilities may be enforced by or against the municipal council under this Act or the rules, bye-laws and orders made thereunder; (c) such officers and servants of the Grama Panchayat shall be transferred to the municipal council as the Government, by order, direct; (d) if the area included is an area in which not less than one thousand persons reside, until the reconstitution of the municipal council in accordance with the provisions of this Act, one person ordinarily resident in such area who is nominated by the Government shall be an additional councillor of the municipal council.

[Content provided in document header: Conversion of two municipal areas into city municipal areas.] (1) Subject to the provisions of sub-section (1) of section 3, the Governor may at any time after consulting the municipal council concerned and considering objections, if any, declare by notification that any town municipal area shall, with effect from a date to be specified in the notification, be a city municipal area constituted under this Act. (2) The provisions of this Act relating to town municipal areas shall not apply to the municipal area declared as a city municipal area under sub-section (1) with effect from the date specified in the declaration. (3) Any appointment, notification, notice, tax, order, scheme, licence, permission, rule, bye-law or form, made, issued or imposed in respect of a municipal area declared as a city municipal area and any appointment, notification, order, scheme, rule, bye-law or form, made or issued under any other law in respect of such municipal area shall continue in force and be deemed to have been made, issued or imposed under the provisions of this Act, unless and until it is superseded by any appointment, notification, notice, tax, order, scheme, licence, permission, rule, bye-law or form, made or issued or imposed under this Act. (4) Before any town municipal area is constituted into a city municipal area, the procedure prescribed in section 9 shall, as far as may be, be followed. (5) The property, rights and liabilities of the municipal council of a municipal area declared as a city municipal area under sub-section (1) shall vest in the municipal council of the said municipal area with effect from the date specified in the notification.

[Content provided in document header: Conversion of city municipal areas into town municipal areas.] (1) The Governor may, at any time after consulting the municipal council concerned and considering objections, if any, declare by notification that a city municipal area shall, with effect from a date to be specified in the notification, be a town municipal area constituted under this Act. (2) The provisions of this Act relating to city municipal areas shall not apply to the municipal area declared as a town municipal area under sub-section (1) with effect from the date specified in the declaration. (3) Any appointment, notification, notice, tax, order, scheme, licence, permission, rule, bye-law or form, made, issued or imposed in respect of a municipal area declared as a town municipal area, and any appointment, notification, order, scheme, rule, bye-law or form, made or issued under any law in respect of such municipal area shall continue in force and be deemed to have been made, issued or imposed under the provisions of this Act in respect of the town municipal area constituted by such declaration unless and until it is superseded by any appointment, notification, notice, tax, order, scheme, licence, permission, bye-law or form, made, issued or imposed under this Act. (4) Before any city municipal area is constituted into a town municipal area, the procedure prescribed in section 9 shall, as far as may be, be followed. (5) The property, rights and liabilities of the municipal council of a municipal area declared as a town municipal area under sub-section (1) shall vest in the municipal council of the said municipal area with effect from the date specified in the notification.

(1) The Government may, at any time after consulting the municipal councils concerned and considering objections, if any, declare by notification that two contiguous smaller urban areas shall, with effect from the date and with the name, to be specified in the notification, be amalgamated and be deemed to be a single smaller urban area constituted under this Act. (2) Any appointment, notification, notice, tax, order, scheme, licence, permission, rule, bye-law or form, made, issued or imposed in respect of the smaller urban areas amalgamated shall continue in force and be deemed to have been made, issued or imposed in respect of the municipal area constituted by the declaration under sub-section (1): Provided that the Governor may, by notification, direct that from the date specified in the declaration under sub-section (1), only such appointments, notifications, notices, taxes, orders, schemes, rules, bye-laws and forms aforesaid shall be applicable to the municipal area constituted by such declaration and only the said appointments, notifications, notices, taxes, orders, schemes, rules, bye-laws and forms aforesaid shall be applicable to the municipal area constituted by such declaration and only the said appointments, notifications, notices, taxes, orders, schemes, rules, bye-laws, and forms shall thereupon continue in force. (3) The property, rights and liabilities of the municipal councils of the smaller urban areas amalgamated and declared to be a single town smaller urban area under sub-section (1) shall vest, in the municipal council of the said single smaller urban area with effect from the date specified in the notification. (4) Notwithstanding anything to the contrary contained in this Act,— (a) until the reconstitution of the municipal council in accordance with the provisions of this Act,— (i) the amalgamated municipal council shall consist of the councillors of the two municipal councils, holding office immediately before the date of amalgamation, (ii) the two persons nominated by the Government from among the persons holding the offices of president and vice-president of the two municipal councils immediately before the date of amalgamation, to be the president and vice-president, respectively, shall be the president and vice president of the amalgamated municipal council, until the election under sub-clause (i) of clause (b), and shall have all the powers and be subject to all the duties and liabilities of a municipal council, president, vice-president or councillors, as the case may be, under this Act; (b) the municipal council as constituted under clause (a) shall, at its first meeting after the date of amalgamation,— (i) elect one of its members to be the president and one of its members other than the president to be the vice-president, and (ii) elect members of the committees under section 63; (c) the term of office of the president, vice-president and councillors referred to in clauses (a) and (b) shall, subject to the provisions of sections 16, 40, 41 and 42 expire on such dates as the Government may, by notification, specify; (d) the Government may, by notification, make such provisions as appear to it be necessary or expedient,— (i) for making omissions from, additions to, adaptations and modifications of the rules, bye-laws, notifications and orders referred to in sub-section (2) in their application to the amalgamated municipal area; (ii) for removing difficulties arising in connection with the working of the amalgamated municipal council until its reconstitution in accordance with the provisions of this Act.

[Content provided in document header: Removal of difficulties.] If any difficulty arises in giving effect to the provisions of the preceding sections of this Chapter, the Government may, by order published in the official Gazette, as the occasion may require, do anything which appears to it to be necessary to remove the difficulty. (1) The Governor may, having regard to one or more of the following:- (a) the size of the area and the municipal services deemed to be provided or proposed to be provided by the industrial establishment in any area; (b) the public infrastructure facility established by the Government or any other agency of the Government under the Karnataka Industrial Area Development Act, 1966 or any other law for the time being in force; (c) the industrial and residential buildings or other buildings providing public infrastructure facility in the area; (a) the income generated in the area from tax and non tax sources for local administration and for providing municipal services, specify by notification such area to be an Industrial Township: (2) Every notification issued in sub-section (1) shall define the limits of the area to which it relates: Provided that no such notification shall be issued unless, (i) the local authority, if any, concerned is consulted; and (ii) a draft thereof is published in the official Gazette for information of all persons likely to be affected thereby inviting objections and suggestions within one month from the date of publication. (1) For every Industrial Township there shall be an Industrial Township Authority. Each such Authority shall be a body corporate by the name "......... Industrial Township Authority” and shall have perpetual succession and a common seal and with power to acquire, hold and dispose of property and to enter into contracts and may by that name sue and be sued. (2) The Industrial Township Authority shall consist of the following members, namely:- (a) a Chair person elected in the prescribed manner from amongst the members referred to in clause (b); (b) five members elected from amongst the owners of Industrial establishments, in case the Industrial Township consists of more than one establishment and three members in case the Industrial Township consists of a single Industrial establishment: Provided that the members of the first Industrial Township Authority under this clause shall be nominated by the Government. (c) one representative of the Commerce and Industries Department nominated by the Government; (d) one representative of the Urban Development Department nominated by the Government; (e) an officer of the Town Planning Department not below the rank of an Assistant Director nominated by the Government; (f) one person nominated by the Government from among the residents of the Industrial Township having special knowledge and experience in municipal administration Urban management or town planning. (1) The Governor may, having regard to one or more of the following:- (a) the size of the area and the municipal services deemed to be provided or proposed to be provided by the industrial establishment in any area; (b) the public infrastructure facility established by the Government or any other agency of the Government under the Karnataka Industrial Area Development Act, 1966 or any other law for the time being in force; (c) the industrial and residential buildings or other buildings providing public infrastructure facility in the area; (d) the income generated in the area from tax and non tax sources for local administration and for providing municipal services, specify by notification such area to be an Industrial Township: (2) Every notification issued in sub-section (1) shall define the limits of the area to which it relates: Provided that no such notification shall be issued unless, (i) the local authority, if any, concerned is consulted; and (ii) a draft thereof is published in the official Gazette for information of all persons likely to be affected thereby inviting objections and suggestions within one month from the date of publication. (1) For every Industrial Township there shall be an Industrial Township Authority. Each such Authority shall be a body corporate by the name "......... Industrial Township Authority" and shall have perpetual succession and a common seal and with power to acquire, hold and dispose of property and to enter into contracts and may by that name sue and be sued. (2) The Industrial Township Authority shall consist of the following members, namely:- (a) a Chair person elected in the prescribed manner from amongst the members referred to in clause (b); (b) five members elected from amongst the owners of Industrial establishments, in case the Industrial Township consists of more than one establishment and three members in case the Industrial Township consists of a single Industrial establishment: Provided that the members of the first Industrial Township Authority under this clause shall be nominated by the Government. (c) one representative of the Commerce and Industries Department nominated by the Government; (d) one representative of the Urban Development Department nominated by the Government; (e) an officer of the Town Planning Department not below the rank of an Assistant Director nominated by the Government; (f) one person nominated by the Government from among the residents of the Industrial Township having special knowledge and experience in municipal administration Urban management or town planning. (g) One representative of the local authorities from the areas of which the area of Industrial township is carved out, nominated by the Government. (3) The members referred to in clause (c), (d) and (e) shall have no voting right in the election of the Chair person. (1) Save as otherwise provided the term of office of the Chairperson and the elected members shall be three years. (2) Save as otherwise provided the term of office of nominated members shall, subject to the pleasure of the Government, be three years. (1) The Industrial Township Authority shall ordinarily hold atleast one meeting in a month for the transaction of its business. (2) Quorum for the meeting of the Authority shall be five. (3) Decisions regarding any business transacted at such meeting shall be taken by a simple majority. (4) No act or proceeding of the Authority shall be questioned or shall be invalid on the ground merely of the existence of any vacancy in, or any defect in the Constitution of the Authority or any defect in the nomination of any member or any irregularity in the procedure of the Authority not affecting the merits of the matter. All documents of the Industrial Township Authority shall be authenticated by signature of the Chief Executive Officer of the Authority or any other officer authorised by the Authority in this behalf. It shall be incumbent on the Authority to make adequate provision by any means or resources which it may lawfully use or take for each of the following matters within the Industrial Township, namely:- (1) Regulation and construction of buildings; (2) Planning for economic and social development; (3) Roads and bridges; (4) Water supply for domestic, industrial and commercial purposes; (5) Public, health, sanitation, conservancy and solid waste management and fire services; (6) Urban forestry, protection of environment and promotion of ecological aspects; (7) Safeguarding the interests of weaker sections of society, including handicapped and mentally retarded and improvement of slums; (8) Provision for urban amenities and facilities such as parks, garden and playgrounds; (9) Burial grounds and crematoriums; (10) Public amenities including street lighting, parking lots, bus stops and public conveniences; (11) Regulation of slaughter houses and tanneries; (12) Any other matter as may be prescribed. (1) The Industrial Township Authority for the purpose of carrying out its functions under section 364 (F) shall exercise all such powers vested in the Municipal Council under sections 175 to 275 both inclusive. (2) The Industrial Township Authority may by order delegate such of its powers except the powers unders section 364(P) as it may deem fit to the Chief Executive Officer of the Authority. (1) The Government may by notification apply to an Industrial Township subject to such restrictions or modifications as the Government may consider necessary for giving effect to the provision of this Chapter,- (a) any provision of this Act or part of any section which applies to the area within the limits of the municipal council, (b) any rule or bye-law in force in any area within the limits of the municipal council. (2) When any provision of this Act or any rule or bye-law is applied with or without modification to any Industrial Township such provisions of the Act or rules or bye-laws thereunder shall unless a different intention appears operate as if the Industrial Township were a municipal area within the jurisdiction of a Municipal Council and the powers and duties of the Municipal Council were vested in the Industrial Township Authority. (1) The Authority shall have and maintain its own funds and to which be credited,- (a) all moneys received by the Authority from the Government by way of grants, loans, advances or otherwise and also the money borrowed from other sources; (b) all taxes, levies, tolls, fees, rent, profits, costs and charges received by the Authority under this Act or under the provisions of any law made applicable to the Industrial Township; (c) all moneys received by the Authority from the disposal of land, buildings and movable properties and from other transactions. (2) The fund shall be applied for meeting the expenses of the Authority in connection with the exercise of powers and performance of duties imposed on the Authority by or under this Act or any other law for the time being in force. (3) The Authority shall, before thirty first day of January each year prepare a Budget containing detailed estimate of income and expenditure of the Authority for the ensuing financial year and submit the same to the Government for approval. (4) The Authority shall maintain proper accounts and other relevant records and prepare an annual statement of accounts in such form as may be prescribed. (5) The accounts of the Authority shall be audited annually by the state Accounts Department or by an agency appointed by the Government under section 290. The provisions of section 291 shall mutatis-mutandis apply to the Industrial Township Authority. (1) Subject to such exemptions as may be prescribed, the Industrial Township Authority shall levy Property Tax on all buildings and lands situated within the Industrial Townships. The provisions of sections 94 to 115 shall mutatis-mutandis apply to the Industrial Township Authority for the levy and collection of Property Tax on the buildings and lands. (2) Thirty percent of the property tax collected by the Industrial Township Authority shall be remitted to the local authority from which the area of Industrial Township is carved out. (1) The Industrial Township Authority may appoint any person possessing such qualification as may be notified from time to time by the Government as the Chief Executive Officer of the Industrial Township Authority. (2) The terms and conditions of service of the Chief Executive Officer including remuneration payable to him shall be determined by the Authority from time to time. (3) The Industrial Township Authority may, with the approval of the Government appoint such number of officers and employees, as may be necessary for the performance of its (1) The Government may by notification apply to an Industrial Township subject to such restrictions or modifications as the Government may consider necessary for giving effect to the provision of this Chapter,- (a) any provision of this Act or part of any section which applies to the area within the limits of the municipal council, (b) any rule or bye-law in force in any area within the limits of the municipal council. (2) When any provision of this Act or any rule or bye-law is applied with or without modification to any Industrial Township such provisions of the Act or rules or bye-laws thereunder shall unless a different intention appears operate as if the Industrial Township were a municipal area within the jurisdiction of a Municipal Council and the powers and duties of the Municipal Council were vested in the Industrial Township Authority. (1) The Authority shall have and maintain its own funds and to which be credited,- (a) all moneys received by the Authority from the Government by way of grants, loans, advances or otherwise and also the money borrowed from other sources; (b) all taxes, levies, tolls, fees, rent, profits, costs and charges received by the Authority under this Act or under the provisions of any law made applicable to the Industrial Township; (c) all moneys received by the Authority from the disposal of land, buildings and movable properties and from other transactions. (2) The fund shall be applied for meeting the expenses of the Authority in connection with the exercise of powers and performance of duties imposed on the Authority by or under this Act or any other law for the time being in force. (3) The Authority shall, before thirty first day of January each year prepare a Budget containing detailed estimate of income and expenditure of the Authority for the ensuing financial year and submit the same to the Government for approval. (4) The Authority shall maintain proper accounts and other relevant records and prepare an annual statement of accounts in such form as may be prescribed. (5) The accounts of the Authority shall be audited annually by the state Accounts Department or by an agency appointed by the Government under section 290. The provisions of section 291 shall mutatis-mutandis apply to the Industrial Township Authority. (1) Subject to such exemptions as may be prescribed, the Industrial Township Authority shall levy Property Tax on all buildings and lands situated within the Industrial Townships. The provisions of sections 94 to 115 shall mutatis-mutandis apply to the Industrial Township Authority for the levy and collection of Property Tax on the buildings and lands. (2) Thirty percent of the property tax collected by the Industrial Township Authority shall be remitted to the local authority from which the area of Industrial Township is carved out. (1) The Industrial Township Authority may appoint any person possessing such qualification as may be notified from time to time by the Government as the Chief Executive Officer of the Industrial Township Authority. (2) The terms and conditions of service of the Chief Executive Officer including remuneration payable to him shall be determined by the Authority from time to time. (3) The Industrial Township Authority may, with the approval of the Government appoint such number of officers and employees, as may be necessary for the performance of its functions and may determine the method of recruitment and conditions of service by regulations. The officers and other employees of the Authority shall receive their salaries and allowances from the fund of the Authority. (1) The Industrial Township Authority shall furnish to the Government such reports, returns and other information as may be prescribed. The Government or any officer authorised by the Government in this behalf may, call for reports, returns and other information from the Authority as may be considered necessary. The Government may issue such directions to the Authority as in its opinion are necessary or expedient for carrying out the purposes of this Act and it shall be the duty of the Authority to comply with such directions. (1) If, in the opinion of the Government, the Industrial Township Authority is unable or has failed, to perform its duties or to carry out its functions properly or satisfactorily, the Government may, after giving the Authority a reasonable opportunity of being heard, by an order in writing published in the official Gazette, appoint a Government Officer as an Administrator of the Industrial Township Authority for a period not exceeding six months as may be specified in the order. (2) On the appointment of an Administrator under sub-section (1) the person if any, chosen or nominated as Chairperson or member of the Industrial Township Authority before such appointment shall cease to be a Chairperson or member of the Industrial Township Authority and all powers and duties of the Industrial Township Authority shall be exercised and performed by the Administrator. (3) Notwithstanding anything contained in this Act the Administrator shall be deemed to be a duly constituted Industrial Township Authority for the purpose of this Act. (4) When the Administrator is appointed to an Industrial Township Authority it shall be reconstituted in the manner provided by this Act before the expiry of the term of office of the Administrator. If any part of a local area comprised in a panchayat area constituted under the Karnataka Panchayat Raj Act, 1993 or in a smaller urban area or transitional area constituted under the Karnataka Municipalities Act, 1964 or in a larger urban area constituted under the Karnataka Municipal Corporation Act, 1976 is included in an Industrial Township, the following consequences shall ensue, namely:- (a) the Grama Panchayat or the Municipal Council or Town Panchayat or the Corporation (hereinafter referred to as the local authority) within the jurisdiction of which such area is situated shall cease to have jurisdiction over such area; (b) the members of the Grama Panchayat or the councilors of the municipal council or the Town Panchayat or the Corporation elected from such area holding office immediately before the date of constitution of Industrial Township Authority shall cease to be members or as the case may be, Councillor and they may be nominated by the Government to the Industrial Township Authority as additional members for the remaining period of the term of their offices as Councilors of the Urban Local Body or members of the Grama Panchayat wich existed before the declaration of Industrial Township Authority; (c) the immovable property vesting in the local authority shall be transferred to the Industrial Township Authority as the Government may, by order in writing, direct; (d) the rights and liabilities of the local authority in respect of civil or criminal proceedings, contracts and other matters (including arrears of tax, fees and cess) arising in or relating to such area included in the Industrial Township shall vest in the Industrial Township Authority and such rights and liabilities may be enforced by or against the Industrial Township Authority under this Act or rules, bye-laws and orders made thereunder. (1) The Industrial Township Authority may, with the previous sanction of the Government make regulations not inconsistent with the provisions of this Act or the rules made thereunder for the administration of the affairs of the Authority. (2) In particular and without prejudice to the generality of the foregoing power, such regulations may provide for all or any of the following matters, namely:- (a) the summoning and holding a meeting of the Authority, the time and place where such meetings are to be held and the conduct of business at such meetings; (b) the powers and duties of the Chief Executive Officer; (c) the form of registers to be maintained by the Authority; (d) the management of properties of the Authority; (e) fees to be levied in the discharge of its functions; (f) method of recruitment and conditions of service of the officers and employees of the Authority; and (g) such other matters which may be or are required to be provided by regulations. If any difficulty arises in giving effect to the provisions of this Chapter the Government may, by order, make such provisions not inconsistent with the provisions of this Act, as appear to them to be necessary or expedient for removing the difficulty.