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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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