* THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN + WRIT PETITION NOs. 14932 and 26197 OF 2008 % 30.12.2008 W.P. No. 14932 of 2008 # Kalavakuru Washermen Cooperative Society Ltd., rep. by its Incharge President Tambavarapu China Yedukondalu, S/o late Veeraiah, Aged 38 years, R/o Gurramvaripalem, Addanki Mandal, Prakasam District. ….. Petitioner Vs. $ The District Collector, Prakasam District and others. ….Respondents. ! Counsel for the Petitioner: Sri P. Sriraghuram ^ Counsel for Respondents 1 and 2: GP for Panchayat Raj. Counsel for respondent No.3: Sri P. Venugopal. Counsel for respondent No.4: Sri Seetharam Chaparla. < Gist: >Head Note ? Citations: 1. 1999 (4) ALD 270 2. AIR 1958 SC 1018 3. AIR 1995 (AP) 1 (FB) THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION NOs.14932 and 26197 OF 2008 COMMON ORDER: The petitioner, a washerman cooperative society, invoked this court’s jurisdiction, in W.P.No.14932 of 2008, to declare the public auction notice dated 23.6.2008 issued by the 3rd respondent – Gram Panchayat for leasehold rights of fishing in respect of the tank in Sy.No.138 situated at Kalvakuru village of Addanki Mandal, Prakasam District for the years 2008-09 to 2010-11, as arbitrary and illegal and for a direction to the respondents to grant leasehold rights in its favour for the said period. W.P.No.26197 of 2008 is filed by the very same society to declare resolution No.4 dated 9.10.2006 of the 3rd respondent as arbitrary, illegal, contrary to Section 81 of the A.P. Panchayat Raj Act, 1994, in violation of principles of natural justice and for a consequential direction to set aside the same. Facts, in brief, are that the petitioner was formed in the year 1996 under the A.P. Cooperative Societies Act, 1964. The 3rd respondent-gram panchayat, in its resolution R.S.No.138/1 dated 3.3.1996, had allegedly set apart the said tank to the members of the petitioner – society for washing of clothes. The rules, notified in G.O.Ms.No.343 dated 10.4.1978, relate to grant of fishing rights in tanks situated in gram panchayats and for preference to be given to washermen cooperative societies. For the years 1999- 2000, 2001 and 2002, the 1st respondent had directed the 3rd respondent to give fishing rights to fishermen cooperative societies. Contending that the rules, notified in G.O.Ms.No.343 dated 10.4.1978, required preference to be given to washermen cooperative societies, the petitioner herein filed W.P.No.26078 of 1996 and this Court, by order dated 20.4.1999, held that the petitioner was entitled for grant of leasehold fishing rights in the subject tank. Thereafter, the 1st respondent issued orders in favour of the petitioner for three years from 1999-2000 till 2002. Subsequently, for the years 2005-06 till 2008, the 2nd respondent, vide proceedings dated 9.11.2005, fixed the upset price at Rs.2.00 lakhs for each year totaling to Rs.6.00 lakhs and granted lease to the petitioner – society. The period of lease subsisted till 30.6.2008. In the interregnum, the 2nd respondent issued proceedings dated 19.6.2008 proposing to auction leasehold rights to catch fish in the tank for the years 2008-2009 and 2010-2011 fixing the upset price at Rs.15.00 lakhs. The petitioner submitted its representation to the 2nd respondent requesting him to issue revised orders and to direct the 3rd respondent to grant fishing rights at the upset price fixed under the proceedings dated 19.6.2008. The 3rd respondent, however, published an auction notice dated 23.6.2008 inviting sealed tenders by 14.7.2008 on which date auction was to be held. The petitioner would contend that, since they were willing to pay the upset price fixed by the 2nd respondent, and as there was no default on their part in the earlier lease terms, the 3rd respondent had, necessarily, to grant leasehold rights for fishing in their favour for the 3 years ending 2011. According to the petitioner, though they fulfilled the conditions stipulated in G.O.Ms.No.343 dated 10.4.1978, the 3rd respondent had forcibly obtained a letter from the President of the Society that he had no objection for the same to be leased out by public auction, that the letter of consent said to have been given by the president was not with the society’s approval, that he was not competent to give consent on the society’s behalf and that they had not waived their rights. This Court, by order in W.P.M.P. No.29869 of 2008 dated 20.11.2008, impleaded the gram panchayat, represented by its Sarpanch, as respondent No.4. In his counter affidavit, the Sarpanch would submit that it was evident from the audit reports that the petitioner society was not genuine and was being run without even a managing committee, that it was classified as “C” and “D”, that it had ceased to function, that unauthorized and bogus persons were managing the illegal affairs of the society, that the Assistant Registrar had conducted an enquiry into the affairs of the petitioner society, that most of the directors of the society were not residing in the village, that some of the members who had received notices did not turn up for the enquiry which was scheduled to be held on 24.11.2008, that the petitioner, which was on the brink of liquidation, should not be permitted to deprive the gram panchayat of its income, and that it was not entitled to claim benefits under G.O.Ms.No.343 dated 10.4.1978. He would further state that the present auction had fetched Rs.45.00 lakhs and that the petitioner – society was not entitled for grant of leasehold rights of the tank at a meager sum of Rs.15.00 lakhs. The status of the petitioner society is referred in detail in the counter affidavit. The 4th respondent would contend that, if indeed the resolution dated 3.3.1996 had been passed, a copy thereof should have been produced by the petitioner, that there was no such resolution, that the records were not handed over by the previous sarpanch who was behind the bogus society, that cases had been filed against him to hand over the records, that till date he had not handed over the entire records and that, in such circumstances, the gram panchayat had passed the resolution dated 9.10.2006. The 4th respondent would, further, state that as many as six members, including the chairman of the petitioner society, had given their consent to the gram panchayat to proceed with the auction, that till date no director, including the chairman, had filed any affidavit stating that consent was given under duress or that it was not binding, that the vice-chairman of the petitioner society did not have locus-standi to file the writ petition as his period in office had expired and that this fact, coupled with the mal- functioning of the affairs of the petitioner society, disentitled them from claiming leasehold rights over the said tank causing monetary loss to the gram panchayat. In W.P.No.26197 of 2008, the petitioner would state that the 3rd respondent had, vide resolution dated 9.10.2006, cancelled the earlier resolution dated 3.3.1996, that the rights which were granted to the petitioner society to wash clothes and raise fish were also cancelled and that the concerned authorities were requested to take steps to cancel registration of the petitioner society. Petitioner would contend that cancellation of the earlier resolution dated 3.3.1996 had deprived them of their fishing rights, that their entry into the subject tank was consequently prohibited, that, before passing the resolution, the 3rd respondent ought to have issued notice to the petitioner society and it is only after hearing them should the resolution have been passed. Petitioner would contend that the benefits which accrued in their favour, under Section 81 of the A.P. Panchayat Raj Act, were taken away by the gram panchayat, that the power of the gram panchayat was not absolute and had to be exercised in conformity with the rules framed by the Government, that they had come to know of the resolution dated 09.10.2006, only after the sarpanch of the gram panchayat had filed an implead petition before this Court, that, thereafter, they had caused enquiries at the office of the Gram Panchayat, that some of the members had stated that, while no such resolution had been passed, an entry was, however, made in the records of the gram panchayat after W.P.No.14932 of 2008 was filed and that the resolution was invented only to deprive the petitioner of its legitimate rights and to deny them the benefits which had accrued in their favour under G.O.Ms.No.343 dated 10.4.1978. Petitioner would contend that the gram panchayat had no jurisdiction to cancel an earlier resolution which could only be annulled, if carried in appeal, by the appellate authority, that the gram panchayat had no jurisdiction to prohibit usage of the tank without recording a finding that it was opposed to public health, that the gram panchayat had annulled the earlier resolution, earmarking the tank for washing clothes, without following the procedure prescribed under Section 81, that it was ex-facie malafide as it was intended to deprive the petitioner of their legal rights, that it was ante-dated and created subsequent to the filing of the earlier writ petition and that it was not binding on the petitioner. In the counter affidavit filed on behalf of the 3rd respondent, the petitioner’s locus-standi to challenge the resolution dated 9.10.2006 is called in question. It is contended that the petitioner is not in existence, that the earlier resolution dated 3.3.1996 was evidently false as it did not see the light of the day till date, that the erstwhile sarpanch did not maintain any record nor were the records handed over to the present sarpanch after he assumed office on 23.8.2006, that the entire process of fixing the upset price, for grant of fishing rights for the period upto 30.6.2008, was stage managed by the family members of the said sarpanch, on payment of a meagre amount of Rs.2.00 lakhs per annum as against the present bid of Rs.45.00 lakhs. It is stated that the members of the petitioner society were the henchmen of the former sarpanch’s family, that no washing activity was undertaken in the said tank at any point of time, that the petitioner society had become de-funct, that it did not work as a society at any point of time, that the petitioner had no right to insist on fishing rights being leased in its favour, that no clothes were washed in the said tank, that the resolution dated 9.10.2006 was passed withdrawing the said tank from being earmarked for washing purpose, that they had requested the authorities to enquire into the functioning of the petitioner society, that the Joint Registrar, vide proceedings dated 13.10.2008, had informed them that the petitioner was dormant, defunct and had to be liquidated, that no society, much less, the petitioner had any right to claim fishing rights in terms of G.O.Ms.No.343, that the petitioner was not entitled to any notice or for an opportunity of being heard before the resolution dated 9.10.2006 was passed, that the petitioner was well aware of the resolution even before filing of the earlier writ petition i.e. W.P.No.14932 of 2008 and that, having not challenged the resolution therein, the petitioner was precluded from questioning the same by way of a separate writ petition as it was barred by the provisions of Order 2 Rule 2 C.P.C. read with Rule 24 of the writ proceedings rules. The 3rd respondent would deny the allegation that no resolution was passed and that an entry was made in the records. They would state that the resolution was duly communicated, that an entry was recorded in the Agenda book on 4.10.2006 informing the members of the gram panchayat that a general body meeting would be held on 9.10.2006 at 11.00 a.m., that, out of 12, 11 members had received notices, and had signed in the Agenda book, that only one member was not available, that the general body meeting was conducted on 9.10.2006 at 11.00 a.m., that resolution No.4 was unanimously passed and entered into the minutes book of the gram panchayat, that the members had signed in the attendance register, that the sarpanch had duly certified the same, that the letter secured by the petitioner from the four members alleging that the resolution was passed in the minutes book, after filing of the writ petition, was false, that the same persons were signatories to the said resolution, that the erstwhile sarpanch must have induced his followers and procured the said letters, that the 3rd respondent had the power to pass the resolution dated 09.10.2006, particularly in the light of lack of washing activity in the said tank at any point of time, the bogus nature of the petitioner society and non-existence of washing necessity, that, in recent times, public water distribution was provided everywhere, including in the 3rd respondent village, that people were washing their clothes at home, that the members of petitioner society were residents of Gurramvanipalem which was 3 KM away from the said tank, that from that village nobody came and washed clothes in the subject tank, that Nargarjunasagar Project canal ran in the midst of Gurramvanipalem village, that there were 12 public hand pumps, that the residents used to wash clothes at their residence, that the petitioner had no right to fish and that they had the power to withdraw the tank from being earmarked for washing purposes. The 3rd respondent would submit that if, as contended by the petitioner, the resolution was referable to Section 246 of the A.P. Panchayat Raj Act, 1994, the petitioner had an alternative remedy of approaching the government, that the present writ petition was not maintainable and, without any preferential legal right of fishing, the petitioner could not seek a writ of mandamus from this Court. Sri P. Sriraghuram, learned counsel for the petitioner, would contend that the impugned resolution dated 09.10.2006, cancelling the earlier resolution dated 03.03.1996, is illegal and is liable to be set aside and that the Gram Panchayat does not have the power to cancel a resolution passed earlier as such a power is conferred, under the A.P. Panchayat Raj Act, only on the Government. According to the learned counsel, it was evident from a conjoint reading of Section 41 and Section 246 (1), that the power to cancel or suspend a resolution passed by the Grampanchayat could only be exercised by the Government either suo motu or on a reference made to it and, that too, on formation of the opinion that such a resolution contravened the conditions stipulated in Clauses (a) to (c) of Section 246(1) of the Act. Learned counsel would submit that the resolution of the Gram Panchayat dated 09.10.2006, in effect, prohibits washing of clothes in the public tank and that the power to so prohibit could only be exercised by the executive authority, that too only on grounds of public health. Learned counsel would submit that, while the power to cancel a resolution is referable under Sections 246 and 41 of the Act, the grounds for exercise of the power to pass a resolution, such as the one passed on 03.03.1996, is referable to Section 81 of the Act. Learned counsel would state that, since the subsequent resolution dated 09.10.2006 canceling the earlier resolution dated 03.03.1996 is illegal, the public tank would remain to be set apart for washing purposes, and would confer a right on the petitioner, a washermen cooperative society, to be given preference in the grant of fishing rights over the tank in question. Learned counsel would submit that the petitioner is a registered society and, under Section 6(3) of the A.P. Cooperative Societies Act, once registration is granted there is a statutory presumption that the society is genuine, that, under G.O.Ms. No.343, dated 10.04.1978, the washermen cooperative society is entitled for preference in the grant of fishing rights in the subject tank on payment of the upset price, that the competent authority to fix the upset price was the Divisional Panchayat Officer, that he had fixed the upset price as Rs.15.00 lakhs which amount the petitioner was ready and willing to pay, that as the validity of the rules in G.O.Ms. No. 343 is not under challenge in these proceedings, the mere fact that the Grampanchayat would be able to secure a higher amount in a public auction would not disentitle the petitioner society from claiming preference in the grant of fishing rights in the public tank. Learned counsel would submit that, under Section 32 of the A.P. Panchayat Raj Act, it was the executive authority alone who was conferred the power to cancel a resolution and that the Grampanchayat had no power to do so. Learned counsel would rely on Fishermen Co-operative Society Ltd., Kothapeta v. District Collector, East Godavari and others[1], in this regard. Sri Seetharam Chaparla, learned counsel appearing for the fourth respondent, on the other hand, would contend that the power of the Gram Panchayat to pass a resolution is traceable to Section 81(1)(a), that it was open to an aggrieved person to question the legality of the resolution under Section 246 and that the petitioners herein were not entitled to invoke this Court’s jurisdiction under Article 226 of the Constitution of India questioning the legality of the resolution passed as early as in October, 2006. Learned counsel would highlight the absence of any averment in either of the writ petitions that the petitioners were washing clothes. He would contend that the power to pass a resolution would include the power to rescind or cancel the resolution and, while the Government had the power under Section 246(1) to cancel the resolution, such a power was available to be exercised by the Gram Panchayat also. Learned counsel would state that, since no washing activity was being carried on in the subject tank, the Gram Panchayat was of the view that it was no longer necessary to set apart the public tank for washing clothes, more so as an effective public water distribution system had resulted in the villagers washing their clothes in their respective houses instead of doing so at the public tank. Learned counsel would state that, since the tank or a portion thereof, is no longer set apart for washing clothes, a washermen cooperative society could no longer claim preference in grant of fishing rights in the said tank. Learned counsel would also refer in detail to the bogus nature of the petitioner society to contend that the earlier resolution dated 03.03.1996 had not seen the light of the day, that it was created by the petitioners only to legally enrich itself at the cost of the Gram Panchayat, that in the auction held for grant of fishing rights the highest bid received was for Rs.45.00 lakhs, which was three times more than the upset price of Rs.15.00 lakhs, fixed by the Divisional Panchayat Officer. Learned counsel would further contend that grant of preferential fishing rights to the petitioner society at the upset price of Rs.15.00 lakhs would result in the Gram Panchayat being deprived of a huge sum of Rs.30.00 lakhs which it would have received if the auction was confirmed, that some of the members of the petitioner society had given letters of consent agreeing that the fishing rights in the tank could be put to auction, that the petitioner had, without authority, filed the present writ petition and that larger public interest would only be served if the Gram Panchayat was permitted to auction the leasehold rights and maximize its revenues. Sri P. Venugopal, learned counsel for the Gram Panchayat, would submit that the entire basis on which W.P. No. 14932 of 2008 was filed is the judgment of this Court in W.P. No.26078 of 1996 dated 20.04.1999, that in the pleadings, and the documents enclosed to W.P. No.14932 of 2008, it had come on record that the petitioners were aware of the resolution dated 09.10.2006 and that they should have questioned its legality in the very same writ petition. According to the learned counsel, the petitioners, having failed to do so, were barred from making a challenge to the resolution dated 09.10.2006 by way of a subsequent writ petition. Learned counsel would submit that the resolution dated 09.10.2006 was legal and valid, that the power to make a resolution included within it the power to rescind the resolution, that the Gram Panchayat was free to discharge its functions within the ambit of A.P. Panchayat Raj Act and that the petitioner could not deprive the Gram Panchayat of its legitimate revenues. Before dealing with the rival contentions, it is necessary to note that the petitioner society had earlier filed W.P. Nos.26078 of 1996 and 4053 of 1998, wherein they had sought a declaration that the minor irrigation tank of Kalvakur Gram Panchayat vested with the Gram Panchayat as per the provisions of Section 65(1) (a) and (b) and Section 80(1) and (2) of the A.P. Panchayat Raj Act and that earmarking of the tank for washing purposes, under Section 81(1)(c) of the A.P. Panchayat Raj Act, was valid. Even in the earlier writ petitions, a contention was raised that the gram panchayat had never passed the resolution dated 03.03.1996 and that it had been incorporated in the minutes book by way of manipulation. This Court, in its order dated 20.04.1999, held that it did not propose to express any opinion on this question, that the fact was that, as on date, the resolution dated 03.03.1996 passed by the Gram Panchayat was not set aside or modified by any competent authority, that the said resolution had not been questioned and must be held to be in existence on date and, as long as the resolution dated 03.03.1996 held the field, the Gram Panchayat was bound to grant lease of fishing rights to the local Rajaka Seva Sangham. The writ petitions were allowed declaring that, under the Rules, the washermen cooperative society was entitled for grant of lease of fishing rights in the minor irrigation tank of the Gram Panchayat. The Rules, which give the washermen cooperative society preference in grant of fishing rights in the village tank, are those notified in G.O. Ms. No.343 dated 10.04.1978. These rules were made in exercise of the powers conferred by Sections 65(1)(b) and Section 89(2) read with Section 217(1) of the A.P. Gram Panchayat Act, 1964. Rule 3 thereof reads thus: “3.(a)(i) The Gram Panchayat shall lease out, except sources set apart for washing of clothes by the local washermen, the rights of fishing in Minor Irrigation tanks and other tanks vested in it under clause (b) of sub-section (1) of section 65 and under sub-section (2) of section 85 of the Andhra Pradesh Gram Panchayat Act, 1964 (hereinafter called the Act), without public auction to the Fishermen Co-operative Society of the local area.” This Court in Fishermen Co-operative Society Ltd., Kothapeta v. District Collector, East Godavari (1 supra), observed: “……….The policy of the Government to offer the fishing rights in the minor irrigation tanks and other sources vesting in Gram Panchayats (there are innumerable such tanks in the State) is a step towards achieving social justice. The purpose is not only the welfare of the Fishermen but also the economic well-being of the Gram Panchayat. The under-lying object of G.O. Ms. No.343 is to see that the tank is put to proper use by the Gram Panchayat as well as fishermen can be benefited. Therefore, adequate steps were taken to see that the Executive Authorities do not have any discretion in the matter. Unfortunately in this case, the 3rd respondent has ignored the object of the Rules and flouted the Rules which are very clear. In a number of cases, this has repeatedly stated that if the public auction is conducted ignoring the rights of the Fishermen Co-operative Society, the auction would be illegal. In Pamarru Fishermen Co-operative Society Ltd. v. Government of A.P., 1981 (2) ALT 40 (NRC), this Court struck down the circular issued by the District Collector directing the lease of fishing rights in public auction without first making offer to the Fishermen Co-operative Society of the local area. This Court also held that the