All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad, sallallaahu ‘alayhi wa sallam, is His Slave and Messenger.
The principle is that it is not permissible to exhume the grave and transport the deceased to another place except for a valid Sharee‘ah-based reason. If the mentioned council is responsible for the Muslim cemeteries, then it is assumed that it is keeping the (Islamic) rulings and Sharee‘ah interests in mind. So its decision about something and the provisions it lays down should be followed.
We draw attention to the fact that in principle a grave should not contain more than one person except in case of necessity or a lawfully considered need, like the narrowness of the space (i.e. if there is a scarcity of graves) and so forth. Likewise, men and women should not be put together in a single grave except in case of a similar necessity. This is in accordance with the actions of the Companions and those after them, as the Prophet, sallallaahu ‘alayhi wa sallam, would bury each deceased person in a single grave. He also buried multiple people in a single grave on the day of Uhud due to the great number of those killed.
There is no evidence in the Sharee‘ah, as far as we know, that limits the time period permitting the exhuming of graves. The criterion is that the deceased's body has decomposed. Shaykh Zakariyya Al-Ansaari said in Asna Al-Mataalib: "Exhuming the grave is forbidden before decomposition according to the experts who are acquainted with that land, lest the sanctity of the deceased be violated. If the deceased did decompose, meaning his body and bones lost form and turned to dust, then exhuming his grave is allowed, as is burying another person in his place."
Anyway, the limitation set by this council to the specified span of time could be for certain considerations.
Allaah Knows best.