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(1) Where a person who seeks to establish a new town or extend the boundaries of a town fails to comply with the condition imposed by the District Assembly within a period of twelve months from the date on which the condition was imposed, the District Assembly shall give that person notice of the failure and the application shall lapse after the notice is served on that person.

(2) A person who proceeds, after the notice is served, to establish the new town or extend the boundaries commits an offence and is liable on summary conviction, to a fine of not less than three hundred penalty units and not more than five hundred penalty units or to a term of imprisonment of not less than one year and not more than three years or to both.

(3) Where the District Assembly decides to extend the validity or review the application, a fee shall be paid for the extension or review.