(1)there shall be establish for each notified area a committee for the purposes of Section 336, sub-section (1) (b) and (c ), consisting of such number of members, as may be fixed by the State Government by rules who shall for the first term, be appointed and for the subsequent terms, elected except that not more than two members shall be appointed by the State Government to represent the Scheduled Castes, Scheduled Tribes or other socially and educationally Backward Classes residing within the small town.