POWERS, AUTHORITY & RESPONSIBILTY OF PANCHAYAT
Article 243G, provides that subject to the provisions of this constitution the
legislature of a state may, by law, endow the panchayats with such powers &
authority as may be necessary to enable them to function as an institution of self
government. Such law may contain provisions for the devolution of powers &
responsibilities upon panchayats subject to such conditions as may be specified
therein, with respect to -
(a) The preparation of plans for economic development & social justice;
(b) The implementation of schemes for social development & social justice as
may be entrusted to them including those in relation to the matters listed in
the eleventh schedule.
The normal distribution of powers under Arts 245 & 246 cannot be affected
by the state legislature while vesting with powers & authorities upon the
panchayats. Thus, Art 243G is subjected the provisions of the constitution of
India.
If you read above Art 243G (b) , than Panchayats has power to interpret the sale deed, as already 6 plots should be used for Public utility its mentioned.