Chapter III Constitution of Trusts

1. (1) The State Government may, by notification in the official Gazette, establish, for the purpose of carrying out improvement of any urban area in the State, whether a master plan in respect thereof has or has not been prepared, a Board of Trustees to be called the Improvement Trust of the place where its principal office is situated, hereinafter called 'the Trust'.
2. (2) Every such Trust shall be a body corporate by the aforesaid name having perpetual succession and a common seal with power to acquire, hold and dispose of property both movable and immovable and to contract and shall by the said name sue and be sued.

1. (1) The Trust shall consist of-
   • (a) a Chairman,
   • (b) two members of the Municipal Board, if any, having authority in the urban area, x x x
   • (c) such number of other persons, as may be determined by the State Government for each Trust, of whom one shall be a person belonging to scheduled tribe or scheduled caste, if no person of such caste or tribe is represented in the Trust by virtue of clause (a) or clause (b). x x x
2. (2) The Chairman and the persons referred to in clause (c) of sub-section (1) x x x shall be appointed by the State Government by notification.
3. (3) The members of the Municipal Board referred in clause (b) of sub-section (1) shall be elected by the said Board.
4. (4) If the said Board does not, by such date as may be fixed by the State Government, elect two of its members to be Trustees, the State Government shall appoint two members of the said Board to be Trustees and every person so appointed shall be deemed to be a Trustee as if he had been duly elected by the Municipal Board.
5. (5) If the said Board shall have been superseded or dissolved in accordance with the provisions of the Municipal law for the time being in force, it shall be represented on the Trust by persons appointed or elected, as the case may be, by the officer or authority appointed under the said law to discharge the functions and exercise the powers of the Board during the period of its supersession or dissolution.
6. (6) Of the person referred to in clause (c) of sub-section (1) at least one shall be a person in the service of the State Government.
7. (7) The names of all persons appointed or elected to the Trust shall be notified by the State Government in the official Gazette.

Any Trustee may at any time resign his office, provided that his resignation shall not take effect until accepted by the State Government.

The term of office of the Chairman shall ordinarily be three years.

Subject to the foregoing provisions, the term of office of every Trustee elected under clause (b) of sub-section (1) of section 9 shall be three years or until he ceases to be a member of the Municipal Board, whichever period is less, and of every Trustee appointed under clause (c) of the said sub-section shall be three years, or in the case of such Trustee being in the service of the State Government, until he ceases to hold the office by virtue of which he was appointed Trustee, whichever period is less.

1. (1) The term of office of the first Trustees shall commence on such date as shall be notified in this behalf by the State Government.
2. (2) 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-appointment or re-election.

1. (1) The Chairman may be paid from out of the trust fund such salary or allowances as may from time to time be proposed by the Trust and approved by the State Government.
2. (2) Other Trustees may be paid from out of the trust fund such allowances, if any, as may be proposed by the Trust and approved by the State Government. 14A. Termination of appointment and re-constitution. - Notwithstanding anything contained in section 11, 12 or 15, the State Government may, if it thinks fit in public interest so to do, terminate the appointment of Chairman or any Trustee of a Trust or re-constitute the same at any time.

1. (1) The State Government may remove from the Trust any Trustee, who-
   • (a) refuses to act, or becomes incapable of acting or absents himself for more than three consecutive months from the meetings of the Trust or of any committee of which he is a member and is unable to explain such absence to the satisfaction of the Trust, or
   • (b) is an undischarged insolvent or has compounded with his creditors, or
   • (c) has been convicted by a criminal court of an offence involving moral turpitude, such conviction not having sub-sequently been set aside, or
   • (d) 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 contract or employment with, by or on behalf of the Trust, or
   • (e) has knowingly acted as a Trustee in a matter other than a matter referred to in clause (c) of sub-section (2) 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
   • (f) has acted in contravention of section 23, or
   • (g) being a legal practitioner, in any suit or other proceedings acts or appears on behalf of any other person against the Trust, or acts or appears on behalf of any other person in any criminal proceeding instituted by or on behalf of the Trust.
2. (2) A person shall not be deemed for the purpose of sub-section (1) to acquire, or continue to have, any share or interest in a contract or employment by reason only of his-
   • (a) 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
   • (b) having a share or interest in a newspaper in which an advertisement relating to the affairs of the Trust is inserted, or
   • (c) holding a debenture or otherwise being interested in a loan raised by or on behalf of the Trust, or
   • (d) 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.
3. (3) The State Government may remove from the Trust a Trustee who in its opinion has so flagrantly abused in any manner his position as a Trustee as to render his continuance as a Trustee detrimental to the public interest.
4. (4) When the State Government proposes to take action under the foregoing provisions of this section an opportunity of explanation shall be given to the Trustee concerned, and, when such action is taken, the reasons therefor shall be placed on record and communicated to him in writing.

1. (1) A Trustee removed under clause (a) or clause (c) of sub-section (1) of section 15, or under sub-section (3) of that section, shall not be eligible for further appointment or election for a period of three years from the date of his removal except when removed for continued absence.
2. (2) A Trustee removed under clause (b) of sub-section (1) of section 15 shall not be so eligible until he has obtained his discharge of has paid his creditors in full as the case may be.
3. (3) The Trustee removed under any other provision of section 15 shall not be so eligible until he is declared to be no longer ineligible, and he may be so declared by an order of the State Government.

1. (1) When the place of a Trustee appointed by the State Government becomes vacant by his resignation, removal, death or otherwise, the State Government shall appoint a person to fill the vacancy.
2. (2) When the place of a Trustee elected under clause (b) of subsection (1) of section 9 becomes vacant by his resignation, removal, death or otherwise the vacancy shall be filled within two months of the existence of such vacancy being notified soon after the occurrence thereof to the Municipal Board by the Trust in the manner provided by sub-section (3) of the said section; provided that if the said Board fails to elect its members to fill the vacancy within the period prescribed above, the provisions of sub-section (4) of section 9 shall apply.
3. (3) The term of office of a Trustee appointed or elected under this section shall be the remainder of the term of office of the Trustee in whose place he has been elected or appointed; 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 Board.