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SUPREME COURT OF INDIA
P.K. GOSWAMI, P.N. SHINGHAL AND JASWANT SINGH, JJ.
Chintapalli Agency Taluk Arrack Sales Co-op. Society Ltd. etc., Appellants
Versus
Secretary (food and Agriculture) Govt. of A.P. and others ect., Respondents.
Civil Appeals Nos 503-504 of 1977,
D/- 28-9-1977.
Advocates Appeared
M/s. A Venkataramana, K. Rajendra Chaudhary and Mrs. Veena Devi Khanna, Advocates for Appellants; Mr. P. Parmeswara Rao, Sr. Advocate (Mr. G. Narayana Rao, Sr. Advocate (Mr. G. Narayana Rao, Advocate with him) (for No. 1) and Mr. G. Venkatarama Sastry. Sr. Advocate (In C. A. No. 503/77); (M/s. B. Parthasarathi and A. Lakshmana Rao, Advocates with him), (for No. 5), for Respondents.
Andhra Pradesh Co-operative Societies Act, 1964 - Section 16 (5) - Andhra Pradesh Excise Act, 1968 – Section 32 - Grant of licenses for all shops - Order of Registrar - Whether order of Government in revision which was passed under Section 77 of 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 - Whether Registrar could entertain a petition under Section 77 when proceedings under Section 16 (5) were questioned by appellant - Whether Government in exercising revision power under Section 77 of Act was competent to issue directions to Excise Department in matter of settlement of arrack shops - Appellant was registered by Deputy Registrar of co-operative Societies - Area of operation of appellant as provided in its bye-laws was for entire with a view to grant arrack licenses to it in respect of all arrack shops within said taluk - There was however an infection of co-operative movement and it appears that tribal’s in various villages in taluk were also encouraged by Co-operative Department to form their own village co-operative societies and to ask for grant of licenses of their village shops in favor of respective village societies instead of granting all licenses of taluk to a single society such as appellant - With this purpose of initiating them into liquor trade village societies were registered on October - Having thus registered village co-operative societies Deputy Registrar of Co-operative Societies gave a notice to appellant under Section 16 (5) of Andhra Pradesh Co-operative Societies Act, 1964 calling upon it to amend its bye-laws so as to restrict its area of operation only to taluk headquarters - Underlying idea behind such a notice was that appellant should be given license in respect of shops situated in taluk headquarters while licenses in respect of shops situated within villages should be granted to respective village societies which have since been registered – Held, Government did not give any notice communicating to appellant about entertainment of application in revision preferred by respondents - Even though appellant had filed some representations in respect of matter it would not absolve Government from giving notice to appellant to make representation against claim of respondents - Minimal requirement under Section 77 (2) is a notice informing opponent about application and affording him an opportunity to make his representation against whatever has been alleged in his petition - It is true that a personal hearing is not obligatory but minimal requirement of principles of natural justice which are ingrained in Section 77 (2) is that 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 proceedings from authority disclosing grounds of complaint or other objection preferably by furnishing a copy of 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 principle of absence of prejudice or imputation of certain knowledge to party against whom action is sought for - It is admitted that no notice whatever had been given by Government to appellant - There is therefore clear violation of Section 77 (2) which is a mandatory provision - Court do not agree with High Court that this provision can be by-passed by resort to delving into correspondence between appellant and Government - Such non-compliance with a mandatory provision gives rise to unnecessary litigation which must be avoided at all costs - Impugned order of Government is invalid being in the teeth of Section 77 (2) of act and in violation of principles of natural justice and High Court should have quashed the same under Article 226 of Constitution - Court therefore set aside judgment of High Court as well as order of Government - Court are allowing these appeals by setting aside order of the Government court express no opinion as to whether Government in exercising revision power under Section 77 of Act was competent to issue direction to Excise Department in matter of settlement of arrack shops - It was submitted however that there was no direction in order which was only by way of request and suggestion - Court are however unable to accept this submission as correct - Any request of Government to a subordinate authority is tantamount to a positive direction or order and it will be difficult for subordinate authority to disregard same - Court would have remanded revision petition to be disposed of by Government in accordance with law and in light of this judgment but since the period of arrack licenses will expire of September no useful purpose would be served by a remand - It will however be open to Government to notify its policy with regard to settlement of arrack shops in future in such appropriate manner as it may deem fit - Appeals are allowed
Judgment
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.he 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.
2. The appellant was registered by the Deputy Registrar of co-operative Societies, Yelamanchili, on 26th September, 1975. The area of operation of the appellant as 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 co-operative movement and it appears that tribals in the various villages in the taluk were also encouraged by the Co-operative Department 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 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.
3. 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 bye-laws so as to restrict its area of operation only to the taluk headquarters.
4. 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.
5. 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 D/- 10-12-1975. In the said other 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 implemented since by that time the village societies had already been granted licences in respect of shops situated in the respective villages. The appellants licence was confined to the area in taluk headquarters for the year 1975-76.
6. 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 Registrars 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.
7. 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, 1976, the Government suspended the operation of the order of the Registrar dated 10th December, 1975 and further directed the Collector (Co-operation) Visakhapatnam to recommend the case of the village societies to the Excise Superintendent for the issue of licences for the excise year 1976-77.
8. The appellant filed a writ petition in the High Court against the aforesaid order of the Government dated 6th October, 1976. The High Court
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