Full Judgment Text
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PETITIONER:
CHINTAPALLI AGENCY TALUK ARRACK SALESCO-OPERATIVE SOCIETY LT
Vs.
RESPONDENT:
SECRETARY (FOOD AND AGRICULTURE) GOVT. OFANDHRA PRADESH, ET
DATE OF JUDGMENT28/09/1977
BENCH:
GOSWAMI, P.K.
BENCH:
GOSWAMI, P.K.
SHINGAL, P.N.
SINGH, JASWANT
CITATION:
1977 AIR 2313 1978 SCR (1) 563
1977 SCC (4) 337
CITATOR INFO :
R 1981 SC 136 (22,23)
1986 SC 180 (48)
F 1991 SC2137 (3,5)
ACT:
Andhra Pradesh Co-operative Societies Act, 1964, section
77(2)-Whether mandatory-Whether the orders passed in
revision invalid for non-compliance with s. 77(2) and non-
affording an opportunity to the person prejudicially
affected-Scope of s. 77(2).
HEADNOTE:
The appellants are the registered societies under the Andhra
Pradesh Cooperative Societies Act and the area of operation,
as provided by the bye-laws, was for the entire taluk with a
view to grant arrack licences to them in respect of the
arrack shops within the said taluk. To spread the co-
operative movement at the village level the trials, in the
various villages in the taluk, were also permitted to form
their own village co-operative societies and to ask for
grant of licences of their village shops in favour of the
respective village societies and enter into the liquor
trade. After the village societies were registered on 4th
October 1975, the Deputy Registrar (Co-operative Societies),
gave a notice to the appellants u/s. 16(5) of the Andhra
Pradesh Co-operative Societies Act 1964 calling upon them to
amend their bye-laws so as to restrict their area of
operation only to the taluk headquarters.
The revision petition filed by the Chintapalli Agency
Society against the said orders of Deputy Registrar was
allowed by the Registrar on 10-12-1975 directing the
District Co-operative Authorities to recommend the case of
the appellants for grant of licence for all the shops
situated within the taluk for the excise year 1975-76 ending
with 30th September 1976. As the licences had already been
granted in favour of the village societies, the orders could
not be given effect to for the year 1975-76. However, the
licence was granted for the year 1976-77 ending with 30th
September 1977 in favour of the appellants. The village
societies preferred revision petitions under s. 77 of the
Act against the orders of the Registrar dated 10-12-1975
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before the Government. On the very day. namely, 6-10-1976
when the respondent-village societies filed their revision
petitions before the Government, the appellants also filed
an application before the Government disputing the claim of
the village societies followed by another application dated
28-10-1976. On 5-11-1976, the appellants prayed to the
Government for an opportunity to file their counter in the
revision petition filed by the respondent-village societies.
The Government, however, without any notice to the
appellants passed final orders on 4-12-1976 allowing the two
revision petitions filed by the village societies and set
aside the orders of the Registrar dated 10-12-1975. The
Government also "requested" the Excise Superintendent,
Visakhapatnam, to take action u/s. 32 of the Andhra Pradesh
Excise Act 1968 for withdrawal of the licence already
granted in favour of the appellants and to issue a fresh
licence amending the area of operation restricting it only
to Chintapalli village. The writ petitions filed by the
appellants were dismissed by a common judgment dated 27th
January 1977 by the Andhra Pradesh High Court.
Allowing the appeals by special leave, the court
HELD : (1) Section 77(2) of the Andhra Pradesh Co-operative
Societies Act 1964 is a mandatory provision. The view of
the High Court that this provision can be by-passed by
resort to belying into correspondence between the appellant
and the Government is not correct; The minimal requirement
u/s. 77(2) is a notice informing the opponent about the
application and affording him an opportunity to make his
representation against whatever has been alleged
564
in his petition. It is true that a personal hearing is not
obligatory but the minimal requirement of the principles of
natural justice which are ingrained in s. 77(2) is that the
party whose rights are going to be affected and against whom
some allegations are made and some prejudicial orders are
claimed should have a written notice of the proceedings from
the authority disclosing the grounds of complaint or other
objection preferably by furnishing a copy of the petition on
which action is contemplated in order that a proper and
effective representation may be made. This minimal
requirement can on no account be dispensed with by relying
upon the principle of absence of prejudice or imputation of
certain knowledge to the party against whom action is sought
for.
In the instant case the impugned order of the Government is
invalid being in the teeth of s. 77(2) of the Act and in
violation of the principles of natural justice. Even though
the appellant may somehow get a copy of the application or
the appellant may have, on its own motion, submitted certain
representations, the duty of a quasi-judicial authority, as
the Government undoubtedly is, in disposing of a matter u/s.
77, could not be avoided in affording the appellant an
opportunity to make representations. This requirement u/s
77(2) cannot be considered as an empty formality and sub-
s.(2) of s. 77 has to be complied with by the Government.
[569 H. 570 A-D]
(2) It is not correct that the Registrar could not exercise
powers u/s. 77 in examining the correctness, legality or
propriety of the proceedings initiated by the Deputy
Registrar u/s. 16(5) of the Act and that the Registrar’s
order in revision is, a nullity. In exercise of the powers
conferred by s. 3 of the Act, the Governor of the Andhra
Pradesh has conferred, inter alia, powers u/s. 16 on the
Deputy Registrar of Co-operative Societies in charge of the
Divisions. It was competent for the Deputy Registrar
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to issue the notice u/s. 16(5) to the appellants. Section
3(1) of the Act provides for the appointment of Registrars
and "other persons". Under s. 3(2) "every other person
appointed under subs. (1) "shall exercise such powers of the
Registrar under the Act as the Government may confer on him
under the general superintendence of the Registrar" The
Deputy Registrar belongs to the category of "other persons"
appointed under sub-s. (1) of s. 3. When, therefore, powers
of the Registrar are conferred upon. him he has to act
"under the general superintendence of the Registrar" as
specifically mentioned in sub-s. (2) of s. 3. Under the
scheme of the Act "any other person" appointed under s. 3(1)
on whom Government confers powers under s. 3(2) is not
equated with the Registrar. The Deputy Registrar is an
officer subordinate to the Registrar for all purposes and
has to act under the supervision of the Registrar. It is
true that the power u/s. 16 is that of the Registrar but the
Deputy Registrar exercises that power as empowered by the
Government but always "under the general superintendence of
the Registrar". Again, under s. 76(2) any order passed in
pursuance of the power so exercised u/s. 16 is appealable to
the Registrar as order passed by "any other officer"
appointed u/s 3(1). [568 C-D, G, 569 A-C, E, F]
Roop Chand v. State of Punjab [1963] Suppl. (1) SCR 539,
distinguished.
(3) Any request of the Government to a subordinate authority
is tantamount to a positive direction or order and it will
be difficult for the subordinate authority to disregard the
same. [The court, however, expressed no opinion as to
whether Government in exercising revision power u/S. 77 of
the Act was competent to issue directions to the Excise
Department in the matter of settlement of arrack shops. The
court also left open to the Government to notify the policy
with regard to the settlement of arrack shops as it may deem
fit.]
[570 E-G]
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 503-504 of
1977.
Appeals by Special Leave from the Judgment and Order dated
27-1-77 of the Andhra Pradesh High Court in Writ Petitions
Nos. 3967 and 3987/76 respectively.
A. Venkataramana, K. Rajendra Chaudhary and Mrs. Veena
Devi Khanna for the Appellant.
P. Parmeswara Rao and G. Narayana Rao for Respondent No.
1.
565
G.Yenkatarama Sastry (In CA No. 503/77 for Respondent
No. 1.
G.Yenkatarama Sastry (In CA No. 503/77 for Respondent
No. 5.
The Judgment of the Court was delivered by
GOSWAMI, J. Chintapalli Agency Taluk Arrack Sales Co-
operative Society Ltd. and the Paderu Taluk Tribal Arrack
Sales Co-operative Society Ltd. were registered as Co-
operative Societies by the Deputy Registrar of Co-operative
Societies, Yelamanchili. The question raised in this case
by these two Societies has been decided by a common judgment
of the High Court of 27th January, 1977. It is sufficient
to state the facts appertaining to Chintapalli Agency Taluk
Arrack Sales Co-operative Society Ltd. (briefly the
appellant) as these are common.
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The appellant was registered by the Deputy Registrar of Co-
operative Societies, Yelamanchili, on 26th September, 1975.
The area of operation of the appellant was provided in its
bye-laws was for the entire taluk with a view to grant
arrack licences to it in respect of all the arrack shops
within the said taluk. There was, however, an infection of
the cooperative movement and it appears that trials in the
various villages in the taluk were. also encouraged by the
Cooperative Department to form their own village cooperative
societies and to ask for grant of licences of their village
shops in favour of the respective village societies instead
of granting all the licences of the taluk to a single
society, such as the appellant. With this purpose of
initiating them into the liquor trade, the village societies
were registered on 4th October, 1975.
Having thus registered the village co-operative societies
(briefly the village societies), the Deputy Registrar of Co-
operative Societies gave a notice to the appellant under
section 16(5) of the Andhra Pradesh Co-operative Societies
Act, 1964, calling upon it to, amend its bylaws so as to
restrict its area of operation only to the taluk head-
quarters.
The underlying idea behind such a notice was that the
appellant should be given the licence in respect of shops
situated in the taluk headquarters while licences in
respect of shops Situated within the villages should be
granted to the respective village societies which have since
been registered.
The appellant filed a petition of revision before the
Registrar of Co-operative Societies challenging the above
notice. The petition was allowed by the Registrar by his
order dated 10th December , 1975. In the said order the
Registrar not only set aside the aforesaid notice of the
Deputy Registrar but also directed the District Co-operation
authorities to recommend the case of the appellant for grant
of licences for all the shops situated within the taluk for
the excise year 1975-76 ending 30th September, 1976. This
direction, however, could not be
566
implemented since by that time the village societies had
already been granted licences in respect of shops situated
in the respective villages. The appellant’s licence was
confined to the area in taluk headquarters ’for the year
1975-76.
With the said recommendation staring in the face, the
village societies apprehended trouble in the year 1976-77
and filed writ petitions in the High Court challenging the
Registrar’s order of 10th December, 1975. Indeed the
licences for 1976-77 were granted to the appellant for the
entire area as recommended by the Registrar. No stay orders
could be obtained by the respondents and hence the licences,
for 1976-77 continued with the appellant.
The village societies also, almost simultaneously approached
the Government by way of revision under section 77 of the
Andhra Pradesh Co-operative Societies Act, 1964 (briefly the
Act) against the order of the Registrar of 10th December,
1975. On 6th October 1970, the Government suspended the
operation of the order of the Registrar dated 10th December
1975 and further directed the Collector (Cooperation)
Visakhapatnam to recommend the case of the village societies
to the Excise Superintendent for the issue of licences for
the excise year 1976-77.
The appellant filed a writ petition in the High Court
against the aforesaid order of the Government dated 6th
October 1976. The High Court issued Rule nisi, but declined
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to stay the impugned order. We are not concerned with this
writ petition which was dismissed as infructuous.
On the very day, viz., 6th October, 1976, when the
respondents filed their revision before the Government,
the appellant filed anapplication to the Government
disputing the claim of the village societies.The
appellant also field before the Government a similar
applicationon 28th October, 1976. On 5th November,
1976, the appellant prayed to the Government for an
opportunity to file counter in the revision petition filed
by the respondents. The Government, however, without any
notice to the appellant, passed final orders on 4th
December, 1976, allowing the two review petitions filed by
the village societies and set aside the order of the
Registrar dated 10th December, 1975.
Under the aforesaid order the Government "requested" the
Excise Superintendent, Visakhapatnam, to take action under
section 32 of the Andhra Pradesh Excise Act, 1968, for
withdrawal of the licence already granted in favour of the
appellant and to issue a fresh licence amending the area of
operation restricting it only to Chintapalli village. The
Excise Superintendent was also requested to issue thereafter
fresh individual licences to all the village level societies
in the Chintapalli taluk for arrack shops existing in their
respective villages. It was, however. mentioned in that
order that the appellant should have opportunity to
represent its grievances, if any, before the Divisional Co-
operative Officer, Yalamanchili, who issued the notice
under section 16(5) of the Act. The appellant felt
aggrieved by the, above order of the Government and filed
two writ petitions Nos. 3947 and
567
3987 of 1976, in which the impugned order was passed by the
High Court and with which alone we are concerned in these
appeals.
The short question that arises for decision is whether the
order of the Government in revision which was passed under
section 77 of the Act is invalid for non-compliance with
section 77(2) which provides that no order prejudicial to
any person shall be passed under sub-section (1) unless such
person has been given an opportunity of making his
representation. It is submitted that the Government did not
afford any opportunity to, the appellant for making
representation before it. The High Court rejected this plea
on the ground that from a perusal of the voluntary
applications filed by the appellant it was clear that the
appellant had anyhow met with the points urged by the
respondents in their revision petition before the
Government. We are, however, unable to accept the view of
the High Court as correct.
The question of amendment of the bye-laws is intimately
connected in this case with the abridgement of the operation
of business directly affecting the existing licences which
had already been granted to, the appellant, Even though the
appellant may somehow get a copy of the application or the
appellant may have, on its own motion, submitted certain
representations, the duty of a quasi-judicial authority, as
the Government undoubtedly is, in disposing of a matter
under section 77, could not be avoided in affording the
appellant an opportunity to make representation. This
requirement under section 77(2) cannot be considered as an
empty formality and subsection (2) of section 77 has to be
complied with by the Government. This has not been done in
this case.
It is submitted on behalf of the respondents that the order
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of the Registrar is a nullity for the reason that the
Registrar could not entertain the revision petition against
the order of the Deputy Registrar who has been empowered to
exercise the functions, and powers of the Registrar under
section 16.
Section 2(n) of the Act defines Registrar as follows
" ’Registrar’ means the Registrar of Co-
operative Societies appointed under section
3(1) and includes any other person on whom all
or any of the powers of the Registrar under
this Act are conferred".
Section 3 may be read
"3(1) There shall be appointed a Registrar of
Co-operative Societies for the State and as
many other persons as the Government think fit
for the purposes of this Act.
(2)Every other person appointed under sub-
section (1) shall exercise, under the general
superintendence of the Registrar, such powers
of the Registrar, under this Act as the
Government may, from time to time, confer on
him".
568
In exercise of the powers conferred by section 3 of the Act
the Governor of the Andhra Pradesh has conferred, inter
alia, powers under section 16 on the Deputy Registrars of
Co-operative Societies incharge of Divisions. It was
therefore competent for the Deputy Registrar to issue the
notice under section 16(5) to the appellants.
The question next arises whether the Registrar could
entertain a petition under section 77 when the proceedings
under section 16(5) were questioned by the appellant. it is
strenuously submitted that the power exercised by the Deputy
Registrar under section 16 was the power of the Registrar
delegated to him and therefore any order passed in those
proceedings would lie the order passed by the Registrar and,
therefore, the Registrar was not competent to entertain a
petition of revision against what may be described as his
own order. In this context the respondents rely upon a
decision of this Court in Root) Chand v. State of Punjab (1)
in support of the above submission.
We may first examine the scheme of the present Act with
which we are concerned. The appointment of the Registrar
and "other persons" is provided for under section 3(1).
Under section 3(2) " every other person appointed under sub-
section (1)" shall exercise such powers of the Registrar
under the Act as the Government may confer on him "under the
general superintendence of the, Registrar". It is,
therefore, clear that the Deputy Registrar belongs to the
category of "other persons" appointed under sub-section (1)
of section 3. When, therefore, powers of the, Registrar are
conferred upon him be has to act "under the general
superintendence of the Registrar" as specifically mentioned
in subsection (2) of section 3.
Again, we may refer to section 76 of the Act which provides
for appeals. Under section 76(2) any person or society
aggrieved by any decision under section 6, refusal to
register a society under section 7 or amendment of the bye-
laws under section 16, etc. may appeal to the Government if
the order is passed by the Registrar [section 76(2) (i)] and
to the Registrar if the decision is of any other person
[section 76 (2) (ii) ]. The Explanation in sub-section (2)
of section 76 provides that the Registrar includes the
Additional Registrar, the Joint Registrar, the District
Collector and the Special Cadre Deputy Registrar working as
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Personal Assistant to the Collector, but not the Deputy
Registrar of Co-operative Societies incharge of the
Divisions. Thus under the scheme of the Act, "any other
person" appointed under section 3 (1) on whom Government
confers powers under section 3 (2) is not equated with the
Registrar. It is manifest that the Deputy Registrar is an
officer subordinate to the Registrar for all purposes and
has to act under the supervision of the Registrar. Any
order passed by the Deputy Registrar of Co-operative
Societies under section 16 is appealable to the Registrar
under section 76(2) (ii).
Section 77 provides for the power of revision and only the
Registrar and the Government have this concurrent Flower.
This power can be exercised either on an application by a
party or suo moto. Power under section 77 is not conferred
on the Deputy Registrar
(1) [1963] Supp. (1) SCR 530.
569
whereas power under section 16 along with some other powers
is conferred on the Deputy Registrar. Section 77 provides
that the Registrar may of his own motion or on an
application made to him call for and examine the record of
any officer subordinate to him in respect of any proceeding,
not being a proceeding wherefrom appeal lies to the Tribunal
under section 76(1) to satisfy himself as to the regularity
of such proceeding, or the correctness, legality or
propriety of any decision passed or order made therein and
pass any of the appropriate orders specified in section
77(1). This power of the Registrar is in accord with the
preeminent position accorded by the Act to the Registrar
under whose supervision "every other person appointed under
section 3(1)" may function and act. It is, therefore, not
correct that the Registrar could not exercise power under
section 77 in examining the correctness, legality or
propriety of the proceedings initiated by the Deputy
Registrar under section 16(5) of the Act.
Roop Chand’s case (supra) is clearly distinguishable since
there under section 41(1) of the East Punjab Holdings
(Consolidation and Prevention of Fragmentation). Act, 1948,
the State Government appoints persons and delegates its
powers or functions under the Act to such officers. When,
therefore, an officer acts as a delegate of the State
Government lie exercises statutory power of appeal of the
Government under section 21 (4) of the Act. This Court
observed ,in that case
".... such a power when delegated remains the
power of the Government, for the Government
can only delegate the power given to it by the
statute and cannot create an independent power
in the officer. When the delegate. exercise
the power, he does so for the Government".
In the present case it is true the power under section 16 is
that of the Registrar but the Deputy Registrar exercises
that power as empowered by the Government but always "under
the general superintendence of the Registrar". Again, under
section 76(2) any order passed in pursuance of the power so
exercised under section 16 is appealable to the Registrar as
an order passed by "any other officer" appointed under
section 3(1). The scheme of the Consolidation Act which
this Court had to deal with in Roop Chand’s case (supra) is
different from that of the Co-operative Act. The submission
of counsel that the Registrar’s order in revision is a
nullity is devoid of substance.
As mentioned earlier in the judgment the Government did not
give any notice communicating to the appellant about
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entertainment of the application in revision preferred by
the respondents. Even though the appellant bad filed some
representations, in respect of the matter, it would not
absolve the Government from loving notice to the appellant
to make the representation against the claim of the
respondents. The minimal requirement under section 77(2) is
a notice informing the opponent about the application and
affording him an opportunity
570
to make his representation against whatever has been alleged
in his petition. It is true that a personal hearing is not
obligatory but the minimal requirement of the principles of
natural justice which are ingrained in section 77(2) is that
the party whose rights are going to be affected and against
whom some allegations are made and some prejudicial orders
are claimed should have a written notice of the proceedings
from the authority disclosing grounds of complaint or other
objection preferably by furnishing a copy of the petition on
which action is contemplated in order that a proper and
effective representation may be made. This minimal
requirement can no on account be dispensed with by relying
upon the principle of absence of prejudice or imputation of
certain knowledge to, the party against whom action is
sought for.
It is admitted that no notice whatever had been given by the
Government to the appellant. There is, therefore, clear
violation of section 77(2) which is a mandatory provision.
We do not agree with the High Court that this provision can
by-passed by resort to delving into correspondence between
the appellant and the Government. Such non-compliance with
a mandatory provision gives rise to unnecessary litigation
which must be avoided at all costs.
The impugned order of the Government is invalid being in the
teeth of section 77(2) of the Act and in violation of the
principles of natural justice and the High Court should have
quashed the same under Article 226 of the Constitution. We,
therefore, set aside the judgment of the High Court as well
as the order of the Government dated 4th December, 1976.
Since we are allowing these appeals by setting aside the
order of the Government, we express no opinion as to whether
the Government in exercising revision power under section 77
of the Act was competent to issue directions to the Excise.
Department in the matter of settlement of arrack shops. It
was submitted, however, that there was no direction in the
order which was only by way of ’request" and suggestion. We
are, however, unable to accept this submission as correct.
Any "request" of the Government to a subordinate authority
is tantamount to a positive direction or order and it will
be difficult for the subordinate authority to disregard the
same.
Normally we would have remanded the revision petition to be
disposed of by the Government in accordance with law and in
the light of this judgment but since the period of the
arrack licences will expire on 30th September, 1977, no
useful purpose would be served by a remand. It will
however, be open to the Government to notify its policy with
regard to the settlement of arrack shops in future in such
appropriate manner as it may deem fit.
This judgment will govern both the appeals. Both the
appeals are allowed, but there will be no. order as to
costs,.
S. R. Appeal allowed.
571
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