(1) Every municipal council may for the purpose of this Act, acquire and hold property both movable and immovable, whether within or without the limits of the¹[municipal area].

(2) All property of the nature herein specified, and not being speciallyreserved by the Government, shall be vested in and belong to the municipal council and shall, together with all other property of whatsoever nature or kind not being specially reserved by the Government, which may become vested in the municipal council, be under its direction, management and control and shall be held and applied by it as trustee, subject to the provisions and for the purposes of this Act, that is to say, --

(a) all public town-walls, gates, markets, slaughter houses, manure and night-soil depots, and public buildings of every description;

(b) all public streams, tanks, reservoirs, cisterns, wells, springs, aqueducts, conduits, tunnels, pipes, pumps and other water works and all bridges, buildings, engines, works, 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 and drains, and all sewers, drains, tunnels, culverts, gutters and water courses, in, alongside or under any street, and all works, materials and things appertaining thereto, as also all dust, dirt, dung, ashes, refuse, animal matter or filth or rubbish of any kind collected by the municipal council from the streets, houses, privies, sewers, cess-pools or elsewhere;

(d) all public lamps, lamp-posts and apparatus connected therewith, or appertaining thereto;

(e) all lands and buildings transferred to it by the Government, by gift or otherwise, for local public purposes;

(f) all public streets and the pavement, stones and other materials thereof and also all trees, erections, materials, implements and things provided for such streets:

Provided that lands transferred to the municipal council by the Government under clause (e) shall not, unless otherwise expressly provided in the instrument of transfer, belong by right of ownership to the municipal council but shall vest in it subject to the terms and conditions of the transfer, and on the contravention of any of the said terms or conditions, the lands with all things attached thereto, including all fixures and structures thereon, shall vest in the Government and it shall be lawful for the Government to resume possession thereof.

(3) It shall be competent to the Government from time to time, by notification, to take over any property vested or vesting in the municipal council under this section on such terms as the Government may determine.

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1. Substituted by Act 36 of 1994 w.e.f. 1.6.1994.

(1) In any municipal area to which a survey of lands, other than lands ordinarily used for the purposes of agriculture only, has been or shall be extended under any law for the time being in force, where any property or any right in or over any property is claimed by or on behalf of the municipal council, or by any person as against the municipal council it shall be lawful for the Deputy Commissioner after enquiry, of which due notice has been given to pass an order deciding the claim.

(2) Any suit instituted in any civil court after the expiration of one yearfrom the date of any order passed by the Deputy Commissioner under subsection (1), or, if one or more appeals have been made against such order within the period of limitation, then from the date of any order passed by the final appellate authority, shall be dismissed (although limitation has not been set up as a defence) if the suit is brought to set aside such order or if the relief claimed is inconsistent with such order provided that the plaintiff has had due notice of such order.

(3) (a) The powers conferred by this section on a Deputy Commissioner may also be exercised by an Assistant Commissioner¹[or any other officer of equal rank specified by the Government] in the case of a town municipal council.

(b) Any person shall be deemed to have had due notice of an enquiryor order under this section if notice thereof has been given in accordance with rules made in this behalf by the Government.

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1. Inserted by Act 83 of 1976 w.e.f. 8.12.1976.

All moneys received by or on behalf of the municipal council by virtue of this Act or any other law; all taxes, tolls and other imposts, fines, fees penalties paid to or levied by it under this Act; all proceeds of land or other property sold by the municipal council, and all rents accruing from its land or property; also all interest, profits and other moneys accruing by gifts or transfers from the Government or private individuals or otherwise shall constitute the municipal fund, and shall be held and dealt with in the same manner as the property mentioned in section 81;

Provided that, --

(a) nothing in this section, or in section 81 shall in any way affect anyobligation accepted by or imposed upon any municipal council by any declaration of trust executed by or on behalf of such municipal council, or by any scheme settled by order of the Government for the administration of any trust;

(b) a municipal council may, subject to the condition that reasonableprovision shall be made for the performance of all obligations imposed or that may be imposed on it by or under this Act or any other law for the time being in force, credit to a separate head in the municipal accounts any portion of the municipal fund received or set apart by it specially for the purposes of schools or dispensaries or water works or fire-brigades or other such purposes as the Commissioner in this behalf approves, and the municipal council may apply any sums properly so credited exclusively to the special purposes for which such sums were received or set apart; and

(c) a municipal council shall credit to a separate head in the municipalaccounts fees received under section 137, and the municipal council shall apply any sums so credited exclusively for the purposes specified in the said section.

(1) Subject to the provisions of this Act and such rules as may be prescribed, the municipal fund and all property held by or vested in the municipal council under this Act, shall be applied, for the purposes specified in sections 87, 88 and 91 and for all other purposes for which by or under this Act, or any other law for the time being in force, powers are conferred or duties imposed upon the municipal council, and with the previous sanction of the Commissioner or the Government, for any other purposes for which the application of such property or fund is in public interest.

(2) Notwithstanding anything contained in sub-section (1) any officer dulyauthorised by it in this behalf, -

(a) incur expenditure beyond the said limits, --

(i) in the acquisition of land, or

(ii) in the construction, maintenance, repair or purchase of works for the purpose of obtaining supply of water required for the inhabitants of the ¹ [municipal area], or of providing the supply of electrical energy for the use of the inhabitants of the said ¹ [municipal area] or of establishing slaughter houses or places for the disposal of night soil or sewage or carcasses of animals beyond the said limits, or for drainage works or for the purpose of providing mechanically propelled transport facilities for conveyance of the public or for the purpose of setting up of dairies or farms for the supply, distribution and processing of milk or milk products for the benefit of the inhabitants of the ¹ [municipal area], or for any other purpose calculated to promote the health, safety or convenience of the inhabitants of the said ¹ [municipal area]; or

(b) make whether within or beyond the limits of the ¹ [municipal area] a contribution towards expenditure incurred by any other municipal council or a ¹ [Taluk Panchayat or a Grama Panchayat or cantonment authority] or other public institution or person or body of persons for measures promoting the health, education or convenience of the public and calculated to benefit the residents within the limits of the contributing municipal council; or

(c) create scholarships tenable outside the limits of the ¹ [municipal area].

(3) Nothing in this section, or in any other provision of this Act, shall be deemed to make it unlawful for a municipal council when with the sanction of the Government it has constructed works beyond the limits of the said ¹ [municipal area] for the supply of water or electrical energy or for drainage as aforesaid, --

(a) to supply or extend to, or for the benefit of, any person or buildings or lands in any place whether such place is or is not within the limits of the said ¹ [municipal area], any quantity of water or electrical energy not required for the purpose of this Act within the said ¹ [municipal area], of the advantages afforded by the system of such drainage works on such terms and conditions, with regard to payment and to the continuance of such supply or advantages, as shall be settled by agreement between the municipal council and such person or the occupier or owner of such buildings or lands, or

(b) to incur any expenditure, on such terms with regard to payment as may be settled as aforesaid, for the construction, maintenance, repair or alteration of any connection pipes or any electric supply lines or other works necessary for the purpose of such supply or for the extension of such advantages.

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1. Substituted by Act 36 of 1994 w.e.f. 1.6.1994.

(1) It shall be lawful for the municipal council to deposit at interest with the Government savings bank, or with the sanction of the Government in any scheduled bank or a central co-operative bank in the State, approved by the Government any surplus funds in its hands which may not be required for current charges, and, with the like sanction to invest such funds in public securities in the name of the municipal council, and from time to time dispose of such securities as may be necessary.

(2) All surplus funds over and above what may be required for current expenses shall, unless deposited or invested as provided for in sub-section (1) be deposited in the local Government treasury or such other place or invested in such security as may be sanctioned by the Government.

A municipal council may, in pursuance of a resolution passed at a special general meeting and with the previous sanction of the Government and subject to such conditions as may be prescribed by the Government as to security, the rate of interest and the repayment of principal and interest, borrow either from the Government or from any bank, corporation or person, any sum of money required for constructing any work of a permanent nature which it is required or empowered to undertake under the provisions of this Act, or for acquisition of land.