(1) There shall be constituted three classes of urban areas constituting two sets of Municipalities and one Municipal Corporation in accordance with the provisions of this section as specified below:––
(a) a “Municipal Committee” for small town ;
(b) a “Municipal Council” for medium town ; and
(c) a “Municipal Corporation” for the capital cities of Jammu and Srinagar :
Provided that no cantonment or part of cantonment shall form part of any Municipal Committee, Municipal Council or Municipal Corporation :
Provided further that a municipality under this section may not be constituted in such urban area or a part thereof as the Government may, having regard to the size of the area and the municipal services being provided or proposed to be provided by an industrial establishment in that area and such other factors as it may deem fit, by notification, specify to be an industrial township.
(2) The Government shall, by notification, constitute the municipalities and specify the class to which a municipality shall belong in accordance with the provision of this section after observing the procedure as laid down in section 4 :
Provided that the Municipalities, Town Area Committees and Notified Area Committees existing at the commencement of the Act and listed in the Schedule to this Act would be deemed to have been constituted and notified as such, under and in accordance with the provisions of this section :
Provided further the Government may, after giving a reasonable notice of not less than thirty days of its intention to do so, amend the Schedule, by notification and declare any Municipal Council to be Municipal Committee and vice versa or include or exclude any area from any Municipality or de-notify any Municipal Committee or Municipal Council through medium of a notification and procedure as it may deem fit.