Under Tamil Nadu District Municipalities Act, it has power to set aside an order passed by a town panchayat or substitute it with a fresh order

A local body may have independent status under the Constitution, but it is bound by the State government’s directives, if the law provides for it, the Madras High Court has ruled.

Under the Tamil Nadu District Municipalities Act, the State government has the power to set aside an order passed by a town panchayat, substitute it with a fresh order or even give a positive direction, it said. Section 252 of the Act (Power of State Government to pass orders or give directions to municipal council) conferred wide powers to the State government to pass any order which it thought fit.

The First Bench comprising Acting Chief Justice R.K.Agrawal and Justice N.Paul Vasanthakumar was allowing a petition by a company seeking the quashing of the resolution adopted by the Athanur Town Panchayat in Namakkal district cancelling building plan approval of April 2010 for establishing a factory for manufacturing granulated manure. German Trading Corporation submitted it had obtained the necessary clearance from statutory authorities. The application was processed through the Single Window System for building plan approval. The town panchayat said the company could go ahead with the construction only after getting its approval.

After a legal battle and an appeal before the State government, a G.O. of the Municipal Administration and Water Supply Department dated April 20, 2010 was issued, directing the Executive Officer of the town panchayat to grant permission to establish the unit. Permission was granted.

The plan approval was cancelled by the town panchayat through a resolution at its meeting on May 6, 2010. Counsel contended that the local body could not have sat in appeal over the State government’s directions issued under Section 252 of the Act.

Therefore, the resolution was liable to be set aside.

The Bench said it was of the considered opinion that even though the town panchayat enjoyed the status of an independent local body under the Constitution, it could exercise its powers only in accordance with the Tamil Nadu District Municipalities Act.

The town panchayat was indeed empowered to grant or refuse permission, but it was subject to other provisions of the law.

As per Section 252, the State government had been authorised to exercise supervisory powers and an order issued by it was binding on the Athanur town panchayat.

Citing the principles laid down by the Supreme Court, the Bench said the town panchayat was not justified in passing the resolution cancelling the building plan approval granted to the petitioner on April 28, 2010.


  • German firm had obtained permission for a factory

  • Athanur panchayat cancelled building plan approval


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