Chapter II Chapter II

Creation and incorporation of trust. The duty of carrying out the provisions of this Act in any local area shall, subject to the conditions and limitations hereinafter contained, be vested in a board to be called "The (name of town) Improvement Trust" hereinafter referred to as "The Trust"; and every such board shall be a body corporate and have perpetual succession and common seal, and shall by the said name sue and be sued.

Appointment of trustees during supersession of Municipal Committees. (1) The trust shall consist of a chairman and nine other trustees, namely :- (a) three officers serving under the State Government, one of whom shall be a Town Planner, the other an officer not below the rank of an Extra Assistant Commissioner and the third an engineer not below the rank of an Executive Engineer taken from the Buildings and Roads Branch or the Punjab Health Branch of the Department of Public Works of the State Government; (b) three members of the Municipal Committee or the Corporation, as the case may be; and (c) three other persons where the population of a local area as per the last preceding census does not exceed two lacs : Provided that where the population of a local area exceeds two lacs as per the last preceding census, then the trust shall consist of a Chairman and ten other trustees and in that case in place of three other persons as specified in clause (c) above, four other persons shall be included in the trust. (2) the chairman and the trustees referred to in clauses (a) and (c) of sub- section (1) shall be appointed by the State Government by notification : Provided that if none of the trustees is a member of the Scheduled Castes, appointment of trustees referred to in the aforesaid clause (c) shall be so made that one of these is a member of such castes. (3) The members of the Municipal Committee or the Corporation referred to in clause (b) of sub-section (1) shall be elected by the Municipal Committee or the Corporation, as the case may be. (4) If the Municipal Committee or the Corporation does not by such date as may be fixed by the State Government elect a person to be trustee, the State Government shall, by notification, appoint a member of the Municipal Committee or the Corporation, as the case may be, to be a trustee, and any person so appointed shall be deemed to be a trustee as if he had been duly elected by the Municipal Committee or the Corporation, as the case may be. (5) Of the persons referred to in clause (c) of sub-section (1) not more than one shall be a servant of the Government. Explanation. - For the purposes of this section the term servant of the Government does not include a Government treasurer, a person holding a purely honorary office or a person who has retired from the service of the Government.

The term of office of the Chairman shall be such period not exceeding four years, as the State Government may fix in this behalf: Provided that when the Trust ceases to exist the said term of office shall be deemed to expire on the date of dissolution of the Trust.

Term of office of other trustees. The term of office of every trustee elected under clause (b) of sub-section (1) of section 4 shall be two years or until he ceases to be a member of the Municipal Committee, whichever period is less, and the term of office of every trustee appointed under clause (c) of the said sub-section shall be two years, but when the trust ceases to exist the said term of office

(1) Any trustee may at any time resign his office, provided that his resignation shall not take effect until accepted by the trust. (2) The term of office of appointed and elected trustees shall commence on such date as shall be notified in this behalf by the State Government. (3) A person ceasing to be a trustee by reason of the expiry of his term of office shall, if otherwise qualified, be eligible for re-election or re- appointment.

Filling of casual vacancies. (1) When the place of a trustee appointed by the State Government, becomes vacant by his resignation, removal or death, the State Government shall appoint a person to fill the vacancy. (2) When the place of an elected trustee becomes vacant by his resignation, removal or death, the vacancy shall be filled, within two months of the existence of such vacancy being notified to the municipal committee by the trust, in the manner provided by sub-section (3) of section 4, provided that if the municipal committee fails to elect a qualified person to fill the vacancy within the period herein prescribed, the provisions of sub-section (4) of the said section shall apply. (3) Every person appointed or elected to fill a casual vacancy under this section shall hold his place for the time for and subject to the conditions upon which it was tenable by the person in whose place he has been so appointed or elected, and no longer; but he may, if otherwise qualified, be re-appointed or re-elected: Provided that no person elected or appointed under sub-section (2) shall continue to be a trustee after he has ceased to be a member of the municipal committee, but he may so continue notwithstanding that the trustee in whose place he was elected or appointed has ceased to be a member of the said committee.

The chairman shall receive such salary and each other trustee shall receive such salary or remuneration as may be sanctioned by the State Government.

Removal of trustees. The State Government may by notification remove any trustee:- (a) if he refuses to act, or becomes, in the opinion of the State Government, incapable of acting or has been declared an insolvent, or has been convicted of any such offence or subjected by a Criminal Court to any such order as implies, in the opinion of the State Government, a defect of character which unfits him to be a trustee; or (b) if he has been declared by notification to be disqualified for employment in, or has been dismissed from the public service and the reason for the disqualification or dismissal is such as implies, in the opinion of the State Government, a defect of character which unfits him to be a trustee; or (c) if he has absented himself for more than three consecutive months from the meetings of the trust, or of any committee of which he is member, and is unable to explain such absence to the satisfaction of the State Government; or (d) if in the opinion of the State Government he has flagrantly abused his position as a trustee; or (e) if he has knowingly acquired or continued to hold without the permission in writing of the State Government, directly or indirectly or by a partner, any share or interest in any contact or employment with, by or on behalf of the trust; or (f) if he has knowingly acted as a trustee in a matter other than a matter referred to in clause (iv) or (v) of the following proviso in which he or a partner had, directly or indirectly, a personal interest, or in which he was professionally interested on behalf of a client, principal or other person; or (g) if he has acted in contravention of section 16; or (h) being a legal practitioner, if he acts or appears on behalf of any other person in any criminal proceeding instituted by or on behalf of the trust; or (i) in the case of a salaried Government Officer, if his continuance in office is, in the opinion of the State Government, unnecessary or undesirable: Provided that a person shall not be deemed for the purpose of clause (e) to acquire, or continue to have, share or interest in a contract or employment by reason only of his - (i) having a share or interest in any lease, sale or purchase of land or building, or in any agreement for the same, provided that such share or interest was acquired before he became a trustee, or (ii) having a share in a joint stock company which shall contract with, or be employed by or on behalf of the trust, or (iii) having a share or interest in a newspaper in which an advertisement relating to the affairs of the trust is inserted, or (iv) holding a debenture or otherwise being interested in a loan raised by or on behalf of the trust, or (v) being retained by the trust as a legal practitioner, or (vi) having a share or interest in the occasional sale of an article in which he regularly trades to the trust, to a value not exceeding, in any one year, such amount as the trust with the sanction of the State Government, may fix in this behalf.

Disabilities of trustees removed under section 10. (1) A trustee removed under clause (a) of section 10 shall not be eligible for re-election or re-appointment for a period of three years from the date of his removal: Provided that if a trustee has been removed by reason of his having been declared an insolvent, he shall be eligible for re-election or re- appointment when he shall have obtained his discharge. (2) A trustee removed under any other provision of section 10 shall not be eligible for re-election or reappointment until he is declared by the State Government to be so eligible.