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the Co-operative Societies Act, 1912
Article 226 in The Constitution Of India 1949
Roop Chand vs State Of Punjab on 10 October, 1962
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Supreme Court of India
Chintapalli Agency Taluk Arrack ... vs Secretary (Food And Agriculture) ... on 28 September, 1977
Equivalent citations: 1977 AIR 2313, 1978 SCR (1) 563
Author: P Goswami
Bench: Goswami, P.K.
           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
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
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.

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 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 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 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 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