One morning in March 2010, residents of Premnagar awoke to discover they were villagers no more. An administrative notification had dissolved Premnagar's village council or gram panchayat and replaced it with a city council or nagar panchayat. Unbeknownst to her residents, Premnagar in Chhattisgarh's Surguja district, had become one of India's newest urban centres.

“But our gram was not worthy of being a nagar,” said Ghasi Ram, former sarpanch of Premnagar, as he sat by a fire burning brightly beside a verdant vegetable patch. “The decision was taken without our consent.” Ghasi Ram,

Jaggi Devi and two other residents filed a petition in the Bilaspur High Court, claiming that the ‘urbanisation' of Premnagar was unconstitutional and pushed by the local administration and politicians to set up a thermal power plant on village land.

About 64 km from Ambikapur, the administrative headquarters of Surguja, Premnagar is no ordinary village. In legal parlance, Premnagar falls in a ‘Schedule V area,' distinguished in the Constitution by its significant tribal population and governed by special laws like the Panchayat (Extension to Scheduled Areas) Act (PESA), 1996.

“Parts IX and IX (A) of the Indian Constitution govern the creation of gram panchayats and urban municipalities and specifically state that their provisions shall not be applicable in scheduled areas.” says Sudha Bharadwaj, counsel for the Premnagar residents. “So, the PESA was necessary to extend the panchayat system to rural areas.”

The PESA only governs gram panchayats and makes no mention of urban bodies like nagar panchayats. “You need a separate act to create a nagar panchayat in a scheduled area, without which notification of an urban area would be unconstitutional,” the counsel says.

A Municipal (Extension to Scheduled Areas) Bill was introduced in the Rajya Sabha in 2001, but was not passed. In September 2009, the Jabalpur High Court held that the PESA did not apply to scheduled areas, stayed the elections in 52 district panchayats and municipalities in such areas, and asked for the parliament to devise a law for urban areas.

It is hard to overstate the importance of the PESA. Specific provisions in the law are designed to prevent tribal alienation from their lands and the restoration of illegally alienated land. Another provision makes it mandatory for the gram sabha to be consulted prior to land acquisition in tribal areas. . In their 2009 report, ‘Development Challenges in Extremist Affected Areas', the Planning Commission notes that “Schedule V and PESA are powerful legislation…but implementation of this law is weak and ineffective.”

In 2008, the Union government asked the Institute of Rural Management, Anand, (IRMA) to include a chapter on the PESA in the Panchayati Raj Report 2008-09. Titled, ‘PESA, Left-wing Extremism and Governance: Concerns and Challenges in India's tribal districts,' the chapter noted that “legal and administrative subterfuge has kept the provisions of the PESA as a set of aspirations and the agenda of self-governance remains postponed…In several cases, the practice of the State government is to sign high profile MoUs with corporate houses … deploy the Acquisition Act to ostensibly acquire the land for the State industrial corporation …[which] leases the land to the private corporation — a complete travesty of the term ‘acquisition for a public purpose,' as sanctioned by the act.” However, the chapter was dropped from the final report without any explanation.

The conclusions of the IRMA report are eerily echoed in the Premnagar experience In June 2005, the Chhattisgarh State Electricity Board and Indian Farmers Fertilizer Cooperative (IFFCO) signed a memorandum of understanding to set up a 1,320 MW thermal power plant on about 850 hectares of land in Premnagar and six adjoining villages. “The plant would have taken about three quarters of the land of our village,” said Mr. Ghasi Ram, “So we refused to give our land.”

Through 2005 and 2006, the Premnagar gram sabha passed three resolutions opposing the project and expressed their opposition in a series of representations to the office of the Governor of Chhattisgarh and the President of India. The proposed power plant was finally shifted to an adjacent cluster of villages, “But the government made us an urban centre because of our opposition to the power plant,” Mr. Ghasi Ram claimed.

‘Nagar panchayat, a gift to residents'

On July 8 2009, the Chief Minister of Chhattisgarh, Raman Singh visited Ambikapur where he held an informal interaction with a group of local journalists. The Nayi Dunia newspaper carried a report, quoting Mr. Singh as saying that Premnagar had been made a nagar panchayat as a “gift” to her residents for the support extended to the IFFCO power plant.

On the same day, the MLA of Premnagar, Renuka Singh (BJP), wrote to a letter to Mr. Raman Singh, requesting that Premnagar be designated an urban area as its population was approached a threshold limit of about 5,500 persons as per the 2001 census. However, census records show that Premnagar had a population of only 3,920 persons at the time.

The administration swung into action. On July 30 2009, the Secretary for Urban Administration and Development issued a notification, designating Premnagar as a nagar panchayat and invited objections. Villagers allege that they were not informed and that no signs or notices were posted in their village.

In November 2009, the office of the Surguja Collector issued a notification disestablishing Premnagar village to make way for a new municipality. The notification itself was dated 13 July 2009 but referred to Letter No.4618/2009/18/3971 dated August 4 2009 – nearly three weeks in the future.

On January 7 2010, the State government nominated a committee for the Municipal Council of Premnagar. Soon after, the villagers went to court. “I don't see any link between the IFFCO plant and the Premnagar case, especially now that the plant shall not be built there.” said Kamalpreet Singh, District Collector, Surguja. Mr. Singh said that Premnagar, much like other former villages in Chhattisgarh, had been notified under the Chhattisgarh Municipalities Act which does not distinguish between scheduled and non-scheduled areas. “If there is a conflict between two laws, then the courts shall have to decide,” he said.