R. A. MEHTA, J. ( 1 ) LEAVE to amend as per the draft. The matter which was before the learned single Judge has come up before the Division Bench in view of the amendment challenging the validity of Sec. 260 of the Gujarat municipalities Act, 1963. Said Sec. 260 reads as follows :"260. Power to Director to prevent extravagance in the employment of establishment: If in the opinion of the Director the number of persons who are employed by the Municipality as officers or servants, or whom a Municipality proposes to employ or remuneration assigned by the Municipality to those persons or to any particular person is excessive the Municipality shall on the requirement of the Director reduce the number of the said persons or the remuneration of the said person or person : provided that the Municipality may appeal against any such requirement to the State Government whose decision shall be conclusive. "the petitioners who were the employees of the Municipality are aggrieved by the termination order dated 16-3-1993. The said order has been passed by the Municipality stating that the Municipality has been facing financial scarcity since some time and has not been able to make regular payment of salaries and in respect of the petitioners, the Local Fund Examiner has raised an objection that the petitioners posts have not been created by the government or by any award and therefore, the petitioners appointment is irregular and the Director of Municipalities has also issued direction for reduction of the staff and accordingly, by that order, the Municipality retrenched the petitioners under Sec. 25f of the Industrial Disputes Act, 1947. The payment has been made as calculated by the Municipality under sec. 25f of the Industrial Disputes Act, 1947. ( 2 ) THE learned Counsel for the petitioners submitted that the Sec. 260 is arbitrary and gives unguided powers to the Director of Municipalities to issue directions and therefore, that provision is violative of Art. 14 of the constitution. It is also submitted that the conferment of powers on the director amounts to undue interference in the functioning of an autonomous local authority. It is also submitted that the section does not provide for any hearing to the concerned employees and does not provide for any inquiry by the Director and therefore, the provision is arbitrary and unconstitutional. It is also submitted that the conferment of powers on the director amounts to undue interference in the functioning of an autonomous local authority. It is also submitted that the section does not provide for any hearing to the concerned employees and does not provide for any inquiry by the Director and therefore, the provision is arbitrary and unconstitutional. ( 3 ) THE section clearly indicates the guidelines that whenever there is extravagant expenditure or excessive staff, the Director of Municipalities is enabled to issue directions to the Municipality to put the things right by directing the Municipality to reduce the number of employees. These guidelines guide the exercise of powers of the Director and it cannot be said that there are arbitrary and unguided powers conferred on the Director. ( 4 ) AS far as the argument regarding principles of natural justice is concerned, it is to be noted that the Director is not empowered to issue directions in respect of a particular employee or employees and therefore, there is no question of giving any hearing to any individual employee. The Director merely takes an administrative or management decision which ordinarily should be taken by the Municipality itself, as to what should be the strength of the staff and what measures should be taken to reduce the excessive staff or prevent extravagant employment. When the municipality has failed to act in prudent manner, the Director is enabled to issue directions to the Municipality to achieve these purposes which are purely management functions and policy decisions. In taking such decisions, the Municipality is not required to give any hearing nor the Director is required to give hearing to any employee. The decision of the Director does not directly affect any particular employee. Therefore, there is no question of giving any hearing to such person and there is no violation of principles of natural justice. As far as the Municipality is concerned, it has been given a right of appeal against the direction of the Director, to the State Government. ( 5 ) THERE is no substance in the contention that Sec. 260 amounts to interference with the management of the autonomous local body. As far as the Municipality is concerned, it has been given a right of appeal against the direction of the Director, to the State Government. ( 5 ) THERE is no substance in the contention that Sec. 260 amounts to interference with the management of the autonomous local body. Under the scheme of the Gujarat Municipalities Act, constitution and powers of the local authorities are subject to the provisions of the Act and subject to the powers of the Director and the Government to regulate the functions and protect the interest of that autonomous local authority. When guided powers are given to the Director, it cannot be said that there is undue interference by the Director or by the Legislature in conferring the powers on the Director. In fact, the powers have been conferred on the Director to check undue or improper exercise of the powers by the Municipality. Thus, there is no merit in any of the contentions raised by the petitioners regarding validity of Sec. 260 of the Act. We therefore, hold that Sec. 260 is not ultra vires Arts. 14 and 16 of the Constitution. In view of this finding, we direct that the matter be placed before the learned single Judge, taking up such matters, at the request of the learned Counsel for the petitioners. .