4. Specification of Local areas to be smaller urban areas or transitional areas and constitution of Municipal Councils and Nagar Panchayats.
- [(1) The State Government may, having regard to population of the area the density of the population therein, the revenue generated for local administration the percentage of employment in non-agricultural activities, the economic importance or such other factors, as it may deem fit, specify, by notification in the Official Gazette, any area to be a transitional area or a smaller urban area for the purposes of this Act :Provided that no military cantonment or any part thereof shall be included in such transitional area or a smaller urban area :Provided further that such an urban area or part thereof, as the State Government may, having regard to the size of the area and municipal services being provided or proposed to be provided by an industrial establishment in that area and such other factors as it may deem fit, by notification, specify to be an industrial township shall not form part of a transitional area or a smaller urban area.] [Substituted by Act No. 11 of 1994.](2)Where an area is specified as a transitional area or as a smaller urban area under sub-section (1), the State Government may, by notification in the Official Gazette, constitute for the transitional area so specified a Nagar Panchayat and for the smaller urban area so specified a Municipal Council of the first class, second class or third class :Provided that the State Government may, after consulting the Municipal Council by notification change its classification from one class to another.(3)where any area which is within the jurisdiction of any other local authority, is constituted as or included in a transitional area or smaller urban area, the State Government may pass such orders as it may deem fit as to the transfer of such area to the Nagar Panchayat of such transitional area or disposal otherwise, of the assets or institutions of such local authority and as to the discharge of the liabilities, if any, of such local authority, relating to such assets or institutions.(4)Where any area is excluded from a transitional area or a smaller urban area and included in the area of any other local authority, the State Government may pass such orders as it may deem fit as to the transfer to such local authority or disposal otherwise of, the assets or institution, of such local authority in that area or as to the discharge of the liabilities, if any, of such local authority, relating to such assets and institutions.(5)Every area, which immediately before the commencement of the Punjab Municipal (Amendment) Act 11, 1994 was constituted as a Municipality under this Act, shall be deemed to have been constituted as smaller urban area under sub-section (1) and Municipality existing for that area before such commencement and specified in Schedule II shall be deemed to have been constituted under this Act for that area.(6)Every area, which immediately before the commencement of the Punjab Municipal (Amendment) Act 11, 1994, was constituted as a Notified Area under section 241 of this Act, shall be deemed to have been specified as a transitional area or a smaller urban area under sub-section (1), and a Municipality of the category as indicated in schedule III shall be deemed to have been constituted under this Act for that area.
