(1) If, in the opinion of the Government, the Corporation is not competent to perform, or persistently makes default in the performance of the duties imposed on it by or under this Act or any other law or exceeds or abuses its powers, the Government may by an order published, together with a statement of the reasons therefor, in the [Government Gazette], declare the Corporation to be incompetent or in default or to have exceeded or abused its powers, as the case may be, and dissolve the Corporation :
Provided that before making an order of dissolution as aforesaid, reasonable opportunity shall be given to the Corporation to be heard and to show cause why order of dissolution should not be made.
(2) When the Corporation is dissolved by an order under sub-section (1)––
(a) all Councillors, shall on such date as may be specified in the order vacate their offices without prejudice to their eligibility for election under clause (d) ;
(b) all powers and duties conferred and imposed upon the Corporation by or under this Act shall be exercised and performed by such person or authority as the Government may by notification appoint in this behalf ; and
(c) all property in possession of Corporation shall be held by the Government ;
(d) the Government shall reconstitute a Corporation as specified under sub-section (2) of section 4 and election to reconstitute such Corporation shall be completed before expiration of a period of six months from the date of dissolution ; provided that where the remainder of the period for which the dissolved Corporation would have continued, is less than six month, it shall not be necessary to hold any election under this sub-section for reconstituting the Corporation for such period ;
(e) the Corporation reconstituted upon the dissolution of the existing Corporation before the expiration of its duration, shall continue only for the remainder of the period for which the dissolved Corporation would have continued under section 5 had it not been so dissolved.