Step 1: Understanding the concept of delegated legislation.
Delegated legislation refers to laws made by an authority other than the legislature but with its permission. The legislature delegates power to an executive body or local authority to make detailed rules and regulations within the framework of the enabling statute.
Step 2: Principle from MCD vs. Birla Cotton Mills.
In the case of MCD vs. Birla Cotton Mills (1954), the Supreme Court ruled that an authority empowered to make laws by delegation must act within the scope of the powers conferred on it by the enabling statute. Any exercise of delegated power that exceeds the boundaries of the original legislation is considered ultra vires (beyond the authority).
Step 3: Application to the question.
In this case, since the Panchayat was dissolved, it no longer holds the delegated power to legislate or make any rules, especially regarding restricting economic activities. Such an act would go beyond the permissible limits of delegated legislation as per the MCD vs. Birla Cotton Mills ruling.
Step 4: Conclusion.
Thus, the act of Mr. Haribansh is invalid as it exceeds the scope of the delegated power, and the correct case is MCD vs. Birla Cotton Mills.