Section 3: Declaration of local area and constitution of development Authority.

(1) As soon as may be after the commencement of this Act, the Government may, by notification in the [Government Gazette], declare any area to be local area for purposes of this Act and constitute therefor an authority to be called the Development Authority hereinafter referred to as the Authority.

(2) The Authority shall be a body corporate by the name of the Local Area having perpetual succession and a common seal with power to acquire, hold and dispose of property, both movable and immovable, and to contract and shall in the said name sue and be sued.

[(3) Notwithstanding anything contained in this Act, the Government may on the written request of an Army officer not below the rank of Corp Commander, declare an area as Strategic Area within a local area, only for direct operational and training requirements of armed forces, which may be excluded from the operation of this Act and rules/regulations made there under in the manner and to the extent specified in the declaration and the Government may satisfy itself about the reasons cited for declaring the area as strategic area and will have such area notified accordingly with such conditions as may be required.]