Effect of conversion of panchayat area into smaller urban area.

[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in force and be deemed to have been made, issued, imposed or granted in respect of the smaller urban area until it is superseded or modified by any appointment, notification, notice, tax, order, scheme, licence, permission, rule, bye-law or form made, issued, imposed or granted under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