Section 7(2) in Karnataka Municipalities Act, 1964
(2)When any local area [ceases to be a smaller urban area] [Substituted by Act 36 of 1994 w.e.f. 1-6-1994.], the municipal council constituted therefor shall cease to exist, and the property and rights vested in any such [municipal council] [Substituted by Act 36 of 1994 w.e.f. 1-6-1994.] shall subject to all charges and liabilities affecting the same, vest in the Government and the proceeds thereof, if any, shall be expended under the orders of the Government for the benefit of the local areas in which such [municipal council] [Substituted by Act 36 of 1994 w.e.f. 1-6-1994.] had jurisdiction.
