1[“114. Municipal fund. -
(1) There shall be established, for each municipality a Municipal Fund and to the credit whereof shall be placed all sums received including the grants-in-aid from the consolidated fund of the State and all loans raised, by or on behalf of the municipality.
(2) Every municipality shall constitute a Development Fund for the purpose of this Act. The constitution and disposal of the Development Fund shall be effected in such manner as may be prescribed.
(3) Twenty-five per cent of the Development Fund constituted under subsection (2) shall be non lapsable and shall be earmarked and utilized to provide and promote services for the urban poor and the inhabitants of the slum areas.
Explanation. -
For the purposes of sub-section (3) "services" shall include basic environmental services, roads, primary education and health, housing, water supply, sanitation, social security and such like services. However it shall not include establishment expenses (including salary and wages) not directly and specifically incurred for delivery of services.”]
[114A. Powers of the] [Municipality] to borrow money. -
For performance of its duties and functions, whether mandatory or discretionary, a [Municipality] may with the previous sanction of the State Government, and subject to the rules prescribed in this behalf, raise loans in the open market or from any financial institution by issue of debentures or against any other security.
115. Custody and investment of municipal fund. -
[(1) The municipal fund shall be kept in the Government treasury or sub-treasury or in the State Bank of India or with the previous sanction of the State Government, in the Uttar Pradesh Co-operative Bank or in a Scheduled Bank.]
(2) In places where there is no such treasury or sub-treasury or bank, the municipal fund may be kept with a banker, or person acting as a banker who has given such security for the safe custody and re-payment on demand of the fund so kept as the [State Government] may in each case think sufficient :
(3) Provided that nothing in the foregoing provisions of this section shall be deemed to preclude a [Municipality] from, with the previous sanction of the State Government, investing in any of the securities described in Section 20 of the Indian Trust Act, 1882, or placing on fixed deposit with a Presidency Bank and portion of its municipal fund which is not required for immediate expenditure.
116. Property vested in [Municipality]. -
Subject to any special reservation made by the [State Government], all property of the nature hereinafter in this section specified and situated within the [municipal area] shall vest in and belong to the [Municipality], and shall, with all other property which may become vested in the [Municipality], be under its direction, management and control, that is to say, -
(a) all public town walls, gates, markets, slaughter-houses, manure and night soil depots and public buildings of every description which have been constructed or are maintained out of the municipal fund;
(b) all public streams, lakes, springs, tanks, wells and works for the supply, storages and distribution of water for public purposes and all bridges, buildings, engines, materials and things connected therewith or appertaining thereto, and also any adjacent land not being private property appertaining to any public tank or well;
(c) all public sewers, drains, culverts and water-courses, and all works, materials and things appertaining thereto;
(d) all dust, dung, [nightsoil], ashes, refuse, animal matter or filth or rubbish of any kind, or dead bodies of animals collected by the [Municipality] from the streets, houses, privies, sewers, cesspools or elsewhere or deposited in places appointed by the [Municipality] under Section 273;
(e) all public lamps, lamp posts and apparatus connected therewith or appertaining thereto;
(f) all land or other property transferred to the [Municipality] by the Government or by gift, purchase or otherwise for local public purposes; and
(g) all public streets and the pavements, stones and other materials thereof, and also all trees, erections, materials, implements and things existing on or appertaining to such streets.
117. Compulsory acquisition of land. -
Where a [Municipality], for the purpose of exercising any power or performing any duty conferred or imposed upon it by or under this or any other enactment, desires the State Government to acquire on its behalf, permanently or temporarily, any land or any right in respect of land under the provisions of the Land Acquisition Act, 1894, or of other existing law, the State Government may, at the request of [Municipality], [in the manner prescribed] acquire such land or such right under the aforesaid provisions; and, payment by the [Municipality] to the State Government of the compensation awarded thereunder and of the charges incurred by the State Government in connection with the proceedings, the land or right, as the case may be, shall vest in the [Municipality].
118. Power of [Municipality] to manage and control property entrusted to its management. -
Subject to the provisions of the next section and to any condition imposed by the owner of the property a [Municipality] may manage and control any property entrusted to its management and control.
119. Public institutions. -
(1) The management, control and administration of every public institution maintained exclusively out of the municipal fund shall vest in the [Municipality].
(2) Any other public institution may be vested in, placed under the management control and administration of the [Municipality], provided that the extent of the independent authority of the [Municipality] in respect thereof may be prescribed by rule.
(3) All property, endowments and funds belonging to any public institution vesting in, or placed under the management, control and administration of, a [Municipality] shall be held by the [Municipality] in trust for the purpose, to which such property, endowments and funds were lawfully applicable at the time when the institution become so vested or was so placed.
(4) Provided that nothing in the foregoing provisions of this section shall be held to prevent the vesting of any trust property in the Treasurer of Charitable Endowments under the Charitable Endowments Act, 1890.
120. Application of municipal fund and property. -
(1) The municipal fund and all property vested in a [Municipality] shall be applied for the purposes, express or implied, for which, by or under this or any other enactment, powers are conferred or duties or obligations are imposed upon the [Municipality].
(2) Provided that the [Municipality] shall not incur any expenditure for acquiring or renting land beyond the limits of the [municipal area] or for constructing any work beyond such limits except, -
(a) with the sanction of the [State Government]; and
(b) on such terms and conditions as the [State Government] imposes.
(3) Provided also that priority shall be given in the order set forth below, to the following liabilities and obligations of a [Municipality], -
[(a) the payment of salaries and allowances of Safai Mazdoors;]
(a1) the liabilities and obligations arising from a trust legally imposed upon, or accepted by the [Municipality];
(b) the re-payment of, and the payment of interest on, any loan incurred under the provision of the Local Authorities Loans Act, 1914;
(c) [except the payments under clause (a), the payment of establishment charges], including such contributions as are referred to in Section 78, and the salary, allowances and pension of an executive officer appointed by the [State Government];
(d) any sum ordered to be paid from the municipal fund under subsection (3) of Section 35, sub-section (2) of Section 36, Section 126, sub-section (3) of Section 163 or sub-section (3) of Section 320.
[Explanation. -
For the purposes of this sub-section, a person shall be deemed to be a Safai Mazdoor if he is employed by the] [Municipality] for the purposes of sweeping and cleaning of municipal roads, lanes, pathways, drains, sewers, latrines and urinals, carrying of dead animals and refuge and for other jobs of the like nature.
[120A. Restriction on expenditure from municipal fund over certain litigation. -
No expenditure from the municipal fund shall be incurred without the prior sanction in writing of the director for the purposes of defraying the costs of any proceedings instituted or commenced in any Court of law by or on behalf of a] [Municipality] or its President in respect of any order made or purporting to have been made by the State Government under Section 30, Section 34, Section 40 or Section 48.
121. Disposal of municipal fund when area ceases to be a [transitional area or a smaller urban area, as the case may be.] -
(1) When, by reason of a notification under Section 3, any local area ceases to be [transitional area or a smaller urban area, as the case may be,] and is immediately placed under the control of some other local authority, the municipal fund and property vesting in the [Municipality] shall vest in such other local authority and the liabilities of the [Municipality] shall be transferred to such other local authority.
(2) When, in like manner, any local area ceases to be a [transitional area or a smaller urban area, as the case may be,] and is not immediately placed under the control of another local authority, and balance of the municipal fund and other property vesting the [Municipality] shall vest in the [State Government] and the liabilities of the [Municipality] shall be transferred to [the State Government].
122. Disposal of municipal fund when area ceases to be included in a [transitional area or a smaller urban area, as the case may be]. -
(1) When, by reason of a notification under Section 3, any local area ceases to be included in a [transitional area or a smaller urban area, as the case may be,] and is immediately placed under the control of some other local authority such portion of the municipal fund and other property vesting in the [Municipality] shall vest in that other local authority, and such portion of the liabilities of that [Municipality] shall be transferred to that other local authority, as the [State Government] after consulting the [Municipality] and that other local authority, declares by notification.
(2) When in like manner, any local area ceases to be included in a [transitional area or a smaller urban area, as the case may be,] and is not immediately placed under the control of some other local authority, such portion of the municipal fund and other property vesting in the [Municipality] shall vest in the [State Government], and such portion of the liabilities of the [Municipality] shall be transferred to the [State Government], as the State Government after consulting the [Municipality] and considering any representation made by the inhabitants of the excluded area, declares by notification.
(3) Provided that where an excluded area is placed under the control of local a local authority not existing at a date previous to the exclusion, the [State Government], before making a declaration under sub-section (1), shall take into consideration any representation made by the inhabitants of the excluded area.
(4) Provided also that the foregoing provisions of this section shall not apply in any case where the circumstances, in the opinion of the [State Government] render undesirable the transfer of any portion of the municipal fund or liabilities.
123. Application of funds and property accruing to Government under Section 121 or 122. -
Any municipal fund or portion of a municipal fund or other property of a [Municipality] accruing under the provisions of Section 121 or 122 to the [State Government], shall be applied in the first place to satisfy any liability of the [Municipality] transferred under such provisions to the [State Government] and secondly for the benefit of the inhabitants of the local area.
124. Power of [Municipality] to transfer property. -
(1) Subject to any restriction imposed by or under this Act, a [Municipality] may transfer by sale, mortgage, lease, gift, exchange or otherwise any property vested in the [Municipality] not being property held by it on any trust the terms of which are inconsistent with the right to so transfer.
(2) Notwithstanding anything contained in sub-section (1), the [Municipality] may with the sanction of the [State Government] transfer to Government, any property vested in the [Municipality] but not so as to affect any trust or public rights to which the property is subject.
(3) Provided that every transfer under sub-section (1), other than a lease for a term not exceeding one year, shall be made by instrument in writing sealed with the common seal of the municipality and otherwise complying with all conditions in respect of contracts imposed by or under this Act.
1[“(4) For safeguarding the interest of weaker section of the society in an urban area, the State Government may issue directions as it may think fit with respect to the acquired or vested land in a municipality.”]
125. Payment of compensation from municipal fund. -
The [Municipality] may make compensation out of the municipal fund to any person sustaining any damage by reason of the exercise of any of the powers vested in the [Municipality], its officers or servants under this or any other enactment or vested in the [State Government], the [Prescribed Authority] or the District Magistrate under Section 34 and shall make such compensation where the person sustaining the damages was not himself in default in the manner in respect of which the power was exercised.
126. Payment by [Municipality] for special police protection at fairs, etc. -
(1) When special police protection is, in the opinion of the State Government, requisite on the occasion of a fair, agricultural show or industrial exhibition managed by a [Municipality], the [State Government] may provide such protection, and the [Municipality] shall pay the whole charges thereof or such portion of such charge as the [State Government] considers equitably payable by it.
(2) If the sum charged is not paid, the District Magistrate may make an order directing the person having the custody of the municipal fund to pay the expenses from such fund.
127. Other matters relating to municipal fund and property. -
The following matter shall be regulated and governed by rules made by the [State Government] under Section 296, namely, -
(a) the authority on which money may be paid from the municipal fund;
(b) the conditions on which property be acquired by the [Municipality] or on which property vested in the [Municipality] may be transferred by sale, mortgage, lease, exchange or otherwise; and
(c) any other matter relating to the municipal fund or municipal property in respect of which the Act makes no provision or insufficient provisions and provision is necessary.
