Power of Government to make suitable provisions by order when a municipality is created or altered.- (1) In this section, unless the context otherwise requires, --

(a) “existing local authority”, in relation to any local area, means the municipal council or the panchayat having jurisdiction over such area immediately before the specified day; (b) “panchayat” means a village panchayat or commune panchayat council established or deemed to be established for any panchayat village or commune panchayat under the Puducherry Village and Commune Panchayats Act, 1973; (c) “specified day” means the day from which any local area is declared to be a municipality under sub-section (1) of section 3 or the day from which a change referred to in any of the sub-clauses of clause (a) of sub-section (4) of section 3 takes effect; (d) “successor local authority”, in relation to any local area, means the municipal council or the panchayat having jurisdiction over such area from the specified day. (2) When -- (a) any local area is declared to be a municipality; (b) any local area is added to a municipality; (c) any local area is excluded from a municipality; (d) two or more municipal areas are amalgamated into one municipality; or (e) a municipality is split up into two or more municipalities, the Government may, notwithstanding anything contained in this Act or any other law for the time being in force, by an order published in the Official Gazette, provide for all or any of the following matters, namely: -- The section came into force on the 26th day of January, 1974 vide Extraordinary Gazette No. 11 dated 17th January 1974. (i) in a case falling under clause (a) or clause (d), the constitution of an interim council consisting of such number of councillors appointed by the Government or of councillors elected by the members or councillors of the existing local authorities or consisting partly of such appointed councillors and partly of such elected councillors, as the Government may determine, until the successor council is in due course constituted under this Act; (ii) in a case falling under clause (b), the interim increase in the number of councillors, either by appointment of the additional councillors by the Government or by election by the members of the existing local authorities or partly by such appointment and partly by such election, as the Government may determine, until the successor councils in due course constituted under this Act; (iii) in a case falling under clause (c), the removal of the councillor, who in the opinion of the Government, represents the area excluded from the municipality; (iv) in a case falling under clause (e), the appointment of special officer or special officers to exercise the powers and to perform the duties and the functions of the successor councils, until such councils are in due course constituted under this Act; (v) the term for which the councillors appointed or elected under clause (i) or clause (ii) or the special officer appointed under clause (iv) shall hold office and the manner of holding election and filling casual vacancies; (vi) the transfer, in whole or in part, of the assets, rights and liabilities of an existing local authority (including the rights and liabilities under any agreement or contract made by it) to any successor local authorities or the Government and the terms and conditions for such transfer; (vii) the substitution of any such transferee for an existing local authority or the addition of any such transferee as a party to any legal proceeding to which an existing local authority is a party; and the transfer of any proceedings pending before the existing local authority or any authority or officer subordinate to it to any such transferee or any authority or officer subordinate to it; (viii) the transfer or re-employment of any employees of an existing local authority to, or by, any such transferee or the termination of service of any employees of an existing local authority and the terms and conditions applicable to such employees after such transfer or re-employment or termination; (ix) the continuance within the area of an existing local authority of all or any appointments, notifications, notices, taxes, orders, schemes, licences, permissions, rules, bye-laws, regulations, or forms made, issued, imposed or granted by, or in respect of, such existing local authority and in force within its area immediately before the specified day, until superseded or modified under this Act; (x) the extension and commencement of all or any appointments, notifications, notices, taxes, orders, schemes, licences, permissions, rules, bye-laws, regulations or forms made, issued, imposed or granted under this Act by, or in respect of, any existing council and in force within its area immediately before the specified day, to and in all or any of the other areas of the successor council, in supersession of corresponding appointments, notifications, notices, taxes, orders, schemes, licences, permissions, rules, bye-laws, regulations or forms (if any) in force in such other areas immediately before the specified day until the matters so extended and brought into force are further superseded or modified under this Act; (xi) the continuance within the area of an existing local authority of all or any budget estimates, assessments, assessment lists, valuations, measurements or divisions made or authenticated by, or in respect of such existing local authority and in force within its area immediately before the specified day, until superseded or modified under the relevant law; (xii) the removal of any difficulty which may arise on account of any change referred to in clause (a) to (e). (3) Where an order is made under this section transferring the assets, rights and liabilities of an existing local authority, then by virtue of that order, such assets, rights and liabilities of the existing local authority shall vest in and be the assets, rights and liabilities of, the transferee. (4) (a) Where an order is made under this section the Government shall, before the expiry of the term of the councillors or special officers appointed or elected under paragraph (i), (ii) or (iv) of sub-section (2) or of the council in whose case the number of councillors is reduced under paragraph (iii) of the said sub-section, take steps in accordance with section 7, for the purpose of determining the number of councillors of, and for holding election for, the new council or councils, as the case may be. (b) The councillors of the interim council or of the council in whose case there is an interim increase or reduction in their number or the special officer or special officers appointed or elected under such order as the case may be, shall, notwithstanding the expiry of the term for which they may have been appointed or elected, continue in office for the area concerned, until immediately before the first meeting of the new council or councils, as the case may be. (c) Save as otherwise provided by or under this section, the provisions of this Act shall apply to any such council, its councillors and special officers. CHAPTER – XXII REPEALS AND TRANSITORY PROVISIONS