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With effect from 1.6.1993 the Constitution 73rd and 74th Amend-ments came into effect. As a result, Parts IX and IXA were introduced in the Constitution. Part IX of the Constitution which dealt with the panchayats provided under Article 243B, for constitution in every State of panchayats at the village, intermediate and district levels in accordance with the provisions of that part. Under Article 243N, any provision of law relating to panchayats in force in a State immediately before the commen-cement of the 73rd Amendment which is inconsistent with the provisions of this Part shall continue to be in force until amended or repealed or until the expiration of one year from such commencement, whichever is earlier. Part IXA which came into force under the Constitution 74th Amendment Act of 1992 deals with municipalities. Under Article 243Q which deals with the constitution of municipalities, it is provided as follows:-

"243Q. Constitution of Municipalities-
(1) There shall be constituted in every State -
(a) a Nagar Panchayat (by whatever name called) for a transitional area, that is to say, an area in transition from a rural area to an urban area;
(b) a Municipal Council for a smaller urban area; and
(c) a Municipal Corporation for a larger urban area, in accordance with the provisions of this Part :
Provided that a Municipality under this clause may not be constituted in such urban area or part thereof as the Governor may, having regard to the size of the area and the municipal services being provided or proposed to be provided by an industrial establishment in that area and such other factors as he may deem fit, by public notification, specify to be an industrial township.

The Gujarat Municipalities Act, 1962 was amended on 20.8.1993 in view of the insertion of Part IXA in the Constitution. Section 264A was substantially amended. It now provided that "for the purpose of this chap- ter notified area means an urban area or part thereof specified to be an industrial township area under the proviso to clause (1) to Article 243Q of the Constitution of India". Thus, as a result of this amendment in the Gujarat Municipalities Act, an industrial area under the Gujarat Industrial Development Act, which is notified under Section 16 of the Gujarat Industrial Development Act would become a notified area under the new section 264A of the Gujarat Municipalities Act and would mean an in- dustrial township area under the proviso to Clause (1) of Article 243Q of the Constitution of India.

It is next contended that the proviso to Clause (1) of Article 243Q applies only to urban areas. It does not apply to a transitional area. Since the industrial areas in question have been subsequently notified as transi- tional areas they cannot be equated with industrial townships. This conten- tion also cannot be accepted. Article 243Q deals with constitution of municipalities. Municipality is defined under Article 243P(e) to mean "an institution of self-government constituted under Article 243Q. Article 243Q constitutes three types of municipalities - (a) a Nagar Panchayat (b) a Municipal Council and (c) a Municipal Corporation. The proviso to Article 243Q deals with all three types of municipalities constituted under Clause (1). It provides that a municipality under Clause (1) may not be constituted in certain circumstances. This would refer to any of the three types of municipalities. Although the proviso refers to such urban area or part thereof, this "urban" area also covers a transitional area, in transition from rural to urban. It is because this area is also in the process of turning into an urban area that it is put under Part IXA which deals with municipalities in urban areas. Therefore, in respect of any of these three types of areas set out in Clause (1) of Article 243Q, having regard to the size of the area, the municipal services being provided or proposed to be provided by an industrial establishment in that area, and such other factors as the Gover-nor will deem fit to consider, he may, by public notification specify such area to be an industrial township. All these relevant factors would be in operation in an industrial area already notified many years back under an Industrial Development Corporation Act as in the present case. Therefore, there is no breach of Article 243Q if such an area is, under the provisions of an Industrial Development Act, equated with an industrial township under Article 243Q.