(1) The State Government shall, on the establishment of a Gram Mandal [for a gramdan village in which, whether or not a panchayat is functioning] by notification in the Official Gazette, declare that the Gram Mandal shall exercise all the powers and discharge all the duties and functions of the panchayat in relation to the Gramdan village.
(2) Upon the issue of a notification under sub-section (1),-
(a) [The panchayat, if any,] which functioned immediately before the date of the notification shall, in relation to the Gramdan village, cease to function therein ;
(b) all the powers, duties and functions attaching to the panchayat under the Panchayats Act, or under any law for the time being in force in the State, shall, in relation to the Gramdan village, attach to the Gram Mandal, and accordingly, the Gram Mandal shall exercise the powers and discharge the duties and functions aforesaid; and the officers and servants of the panchayat [, if any], shall, subject to the provisions of the Panchayats Act, become the officers and servants of, or as the case may be, work under the Gram Mandal ;
(c) the person elected by the panchayat [, if any,] for the purpose of constituting a Nyaya Panchayat under section 64 of the Panchayats Act shall be deemed to be the person elected by the Gram Mandal out of its members for the constitution of that Nyaya Panchayat until the Gram Mandal elects any other person as provided by section 64 of that Act ;
(d) the provisions of the Panchayats Act shall, subject to such restrictions and modifications as the State Government may specify in the notification, apply to the Gram Mandal as if it were panchayat constituted under that Act for the Gramdan village ;
(e) the Gram Mandal shall be entitled to all the assets and be subject to all the liabilities of the panchayat (including all rights and liabilities under any contract made by it) as on the date of the notification ;
(f) where immediately before the date of the notification aforesaid, a panchayat was a party to any legal proceeding in any Court or tribunal in the State, the Gram Mandal shall stand substituted for that panchayat as a party to that proceeding, or added as a party thereto, as the case may be, and the proceedings continued accordingly.
(3) Any notification issued under sub-section (1) may contain such supplemental, incidental and consequential provisions as the State Government may deem necessary, and in particular, may direct,-
(i) that any tax, fee or other sum due to the panchayat shall be payable to the Gram Mandal ;
(ii) that appeals, petitions or other applications with reference to any such tax, fee or sum which are pending on the date of such notification shall be disposed of by the Gram Mandal.