The bill, Tamil Nadu Municipal Corporation Laws (Amendment) Act, 2016, seeks to ensure election of mayors by councillors and not by the people as was the practice so far.
The House saw an intense debate on the bill with DMK questioning the ruling AIADMK's intention behind it, and asking as to why it made such a proposal even though AIADMK was dominating all the 12 corporations in the state.
After Speaker P Dhanapal declared the bill as passed by a voice vote, DMK sought a division.
Ruling out a division, the Speaker said he will go for a headcount of those backing and opposing it.
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As he asked those supporting the bill to rise from their seats, members in the Treasury benches, led by Chief Minister J Jayalalithaa promptly stood up.
Later, DMK members and their allies -- Congress and IUML -- stood up to register their opposition to the bill.
The Speaker later announced that the bill has the support of 132 members while 88 opposed it.
Earlier, DMK's M Subramanian, a former Mayor of Chennai, asked why AIADMK had proposed the bill, considering that all 12 municipal corporations in the state were dominated by the party which also had about 80 per cent representation in the local bodies.
He said it was AIADMK which had earlier changed the system of councillors electing mayors and asked why it was reverting to the old system.
Intervening, Jayalalithaa said it was usual practice for a government to go for a review of its own policy.
Surbamaniam claimed that the provision easing the norms for moving a no-confidence motion would lead to a "short-cut" for people eyeing mayor and deputy mayor's posts and also make their removal process easier.
Congress member J G Prince said the government move amounted "to stifling the voice of democracy".
Municipal Administration and Rural Development Minister S P Velumani, who moved the bill yesterday in the House, rejected the opposition allegations and said the sole aim was to ensure better delivery of services to the people.
"It is considered that if the mayor of a corporation enjoys the support of a majority of councillors, the councillors can function in a better manner," it had said, adding that it had thus decided to get mayors elected indirectly by the councillors from among themselves.