* THE HON'BLE SRI JUSTICE A.RAMALINGESWARA RAO WRIT PETITION Nos.4962 and 7858 of 2003; 28225 of 2005 and 25463 of 2007 % 12.09.2014 Between: Toddy Tappers Cooperative Society, And others. … Petitioners AND The Prohibition & Excise Superintendent – cum – Functional Registrar, TTCS, Nizamabad District, at Nizamabad, And others. …Respondents Counsel for petitioners: Sri T.Amarnath Goud Sri S.Rahavender Goud Sri M.Rajamalla Reddy Sri Nandigam Krishna Rao Counsel for the Respondents : Government Pleader for Excise Sri Nandigam Krishna Rao Sri T.Amarnath Goud < Gist: > Head Note: ? CITATIONS: 1. 2003 (5) ALD 393 (DB) THE HON'BLE SRI JUSTICE A.RAMALINGESWARA RAO WRIT PETITION Nos.4962 and 7858 of 2003; 28225 of 2005 and 25463 of 2007 COMMON ORDER: W.P.No.4962 of 2003: Heard the learned Counsel for the petitioner, learned Government Pleader for respondent Nos.1 to 4 and the learned Counsel for respondent No.5. 2. The petitioner society was registered on 14.10.1993 under the provisions of the Andhra Pradesh Cooperative Societies Act, 1964. Its area of operation extends to 36 wards of Nizamabad Town. It was granted a licence to sell toddy in respect of Nizamabad area from 01.04.2002 to 31.03.2007 under licence dated 04.05.2002. The said society was allotted 11 toddy shops and they cater to the entire Nizamabad Town having 36 wards. The shops are not restricted to the wards in which they were located. While so, during November 2002, around 500 persons underwent test and 135 of them were found to be eligible tappers and the society resolved to provide them membership. In respect of another 200 persons, the first respondent issued proceedings on 03.10.2002 directing the petitioner society to admit 77 persons as members in view of the report of the SHO, Nizamabad, dated 15.09.2002. But, the petitioner society was not aware whether any test was conducted to the said 77 persons and, in fact, only 9 persons from out of 77 persons applied to the society seeking membership. The said 9 persons were given membership. The petitioner filed W.P.No.21609 of 2002 challenging the jurisdiction of the first respondent to direct the petitioner to admit members, and the said Writ Petition was disposed of on 17.03.2003 directing the society to consider the applications for membership and pass orders in accordance with law, within a period of one month from 17.03.2003. When steps were taken by respondent Nos.1 to 4 to form a new society and open new toddy shops in Nizamabad area in respect of the persons indicated in the proceedings of the first respondent dated 03.10.2002, W.P.No.25349 of 2002 was filed, and the same was dismissed on 17.03.2003. The petitioner further states that there is no provision in Andhra Pradesh Cooperative Societies Act to have one more society of the same nature within the area of operation of the existing society. The Commissioner of Prohibition and Excise has no role with regard to the creation of a new society, but the Commissioner of Prohibition and Excise issued orders in CR.No.119/2003/CPE/E2 dated 18.03.2003 directing the Prohibition and Excise Superintendent, Nizamabad, to form a new TCS at Nizamabad with 67 members in the seven toddy shops. The said proceedings of the Commissioner of Prohibition and Excise, Hyderabad, dated 18.03.2003, is challenged in the present Writ Petition. 3. A counter affidavit is filed on behalf of respondent Nos.1 to 4 stating that one Sri Raja Goud and 198 others had submitted an application on 11.04.2002 seeking admission of membership in the petitioner society. They stated that their request for admission as members was rejected by the petitioner society on the ground that they were non-residents. The Excise Inspector concerned submitted a report dated 15.09.2002. As per the said report, all the applicants were residents of topes allotted to the petitioner society. Skill test was conducted by the Excise Inspector concerned on 03.09.2002, 10.09.2002 and 11.09.2002. Out of 199 applicants, 112 attended for the skill test and 77 persons were qualified. Clause 17 of the Excise (Toddy) Policy for the period 01.04.2002 to 31.03.2003 states as follows: “Steps shall be taken by every toddy tappers cooperative society located in Municipality/Municipal Corporation to enroll as regular members all such tappers who are entitled for tapping for them in rural areas where topes are situated and the trees earmarked for such society irrespective of the actual resident of such tappers.” 4. The petitioner society refused membership to the applicants by resolution dated 06.06.2002 on the ground that they were non-residents and the said ground is not factually correct. In those circumstances, the first respondent issued proceedings dated 03.10.2002 directing the petitioner to convene a General Body Meeting of TCS Nizamabad within 15 days and admit 77 qualified tappers as members according to the Excise Policy for the year 2002-03. The petitioner filed W.P.No.21069 of 2002 questioning the said proceedings. The petitioner also filed W.P.No.25349 of 2002 questioning the proposal to grant new TCS and new toddy shops at Nizamabad in the area of operation of the petitioner society. This Court, by order dated 17.03.2003, directed the petitioner society to consider the application for membership and pass orders in accordance with law within a period of one month from that date. W.P.No.25349 of 2002 was dismissed. Basing on the representation made by the eligible tappers who were denied admission by the petitioner society, the fourth respondent issued proceedings on 18.03.2003 sanctioning 7 new toddy shops in vacant wards of 3, 13, 20, 26, 31, 34 and 36 duly fixing ration and rentals. Based on the orders of the fourth respondent the first respondent registered the new society Nizabamad-2 with Presidency of Sri Raja Goud and other members on 20.03.2003. The petitioner was not affected by the formation of new society as the area of operation of the petitioner is not encroached nor the ration of the petitioner was reduced. Hence, the petitioner had no locus standi to question the formation of new society in the area of operation not covered by the petitioner society. As per the delegation of powers issued under G.O.Ms.No.234 dated 03.04.1979, the Excise Superintendent, being the functional Registrar of Toddy Tappers Cooperative Society, is empowered to register the society. Under the Excise (Toddy) Policy, the Government delegated the powers to the Commissioner of Prohibition and Excise to implement the policy guidelines. The contention of the petitioner that the area of operation of the society extended to the entire municipal area of Nizamabad is not correct. As per the Toddy Policy for the year 1996-97, the area of operation of TCS located in the Municipality is restricted to only to those wards where shops are located. After conducting the tapping test by the Station House Officer, Nizamabad, and submitting a report, the Prohibition and Excise Superintendent, Nizamabad, had directed the petitioner society to admit 77 members who were found to be genuine tappers. But, the petitioner did not comply with the same and approached this Court by filing W.P.No.21069 of 2002, which was disposed of on 17.03.2003. In spite of the directions, the membership was not given to the eligible tappers. When the rejected tappers represented for formation of a new society in Nizamabad Municipality, proposals were submitted to the Commissioner of Prohibition and Excise, Andhra Pradesh, Hyderabad, for sanction of the new society, fixation of rental and other levies etc. 5. The respondents relied on an order of this Court in W.A.Nos.1116 and 1117 of 2001, wherein it was held that if the Excise Policy was not contrary to the provisions of the Andhra Pradesh Excise Act, 1968, it has to be followed by the authorities. In view of the same, the Commissioner, Prohibition and Excise issued orders for establishment of 7 toddy shops by the fifth respondent with 67 members in the vacant wards. The counter affidavit further states that the Commissioner of Prohibition and Excise, being the over all In-charge of the excise administration in the State and the Chief Controlling authority in all matters connected with the administration of Andhra Pradesh Excise Act under Section 3 of the Act, has the inherent powers in the matters of grant of lease of existing toddy shops and creation of new toddy shops and lease of such shops to the tappers under TCS/TFT scheme within the guidelines issued by the Government. The policy for the year 2002- 03 of the Government was extended up to 30th September 2003 vide G.O.Ms.No.50 dated 18.01.2003. 6. The fifth respondent filed a counter affidavit stating that the petitioner society is formed and is being managed by the contractors defeating the very purpose of tree for tapper scheme and the object of the tappers cooperative society. The members of the fifth respondent were actual tappers working in the petitioner society as daily wage employees. Since the inception of the petitioner society, the services and hard labour of the fifth respondent were employed by the middlemen who promoted the petitioner society and they were making wrongful gain by defeating the purpose of TFT scheme as well as the object of TCS. 77 daily wage employees are working with the petitioner. They have been agitating for grant of membership for more than 7 to 8 years, though they were fully qualified and eligible to become members of the petitioner society. It is not correct to state that 11 shops which were allotted to the Petitioner society cater to the entire needs of Nizamabad Town i.e., all the 36 wards. The shops are restricted to the wards in which they are located. The members of the petitioner society are not dependent on the shops run by the society. It is true that the first respondent had conducted tapping test to some persons in September 2002 and found that 77 persons were eligible for membership and accordingly orders were issued on 03.10.2002. But, in order to create a rift among the eligible members, they wanted to provide membership to 10 persons only leaving the remaining 67 persons of their right to become members. In those circumstances only, the members of the fifth respondent approached the authorities for formation of a new society. The request of the members of the fifth respondent society had been pending since 15.06.2002. There is no ban in the Excise Policy for sanction of toddy shops. The shops, which were granted to the fifth respondent are not within the area of operation allotted to the petitioner. The fifth respondent had commenced operation of 5 shops out of 7 shops in the wards allotted to them on 25.03.2003, and the remaining shops would be opened on 26.03.2003. W.P.No.28225 of 2005: 7. The case of the petitioner is that there are two toddy tappers societies in Nizamabad Town and they are arrayed as respondent Nos.5 and 6. When respondent Nos.5 and 6 did not give membership to the petitioner, he along with others filed an application to the first respondent and other respondents on 10.08.2004 requesting them to register them as members of the Toddy Tappers Cooperative Society-II at Nizamabad. The request of the petitioner was recommended by two Hon’ble Ministers and in spite of the same the first respondent passed the impugned order on 17.01.2005 in Rc.No.973/Coop/2004, rejecting the request on the ground that there were already two Toddy Tappers Cooperative Societies at Nizamabad Town and there are only 36 wards in the Municipality; the toddy shops allotted to both respondent Nos.5 and 6 were 18; there is no suitable place for allocation of another toddy shop away from a distance of 2 kms to another existing toddy shop; and, the ration was also not available with a distance of 50 kms. Challenging the same, the present Writ Petition is filed. 8. The case of the petitioners is that the Nizamabad has become a Municipal Corporation with 46 wards, and there are no toddy shops in Nagaram, Seetaramanagar and Gayatri Nagar, Padmanagar, Kotagalli, Chandrasekhar Nagar and Gowtam Nagar, Kateshwar Bank Colony, New Housing Board, Hyderabad Road, Nizamabad, Vengalrao Nagar and Auto Nagar Malapalli. The said areas are situated at a distance of more than 2 kms from the existing toddy shops and hence, the reasons assigned by the first respondent are not correct. The first respondent is not permitting the formation of a new society at the instance of respondent Nos.5 and 6. W.P.No.7858 of 2003: 9. This Writ Petition is filed challenging the proceedings of the third respondent dated 20.03.2003 sanctioning new TCS Group, Kamareddy No.II with seven toddy shops for being established in Kamareddy Town within the area of operation of the petitioner society, as arbitrary and illegal. 10. The petitioner submits that the petitioner society is an age-old society having its area of operation extended to the entire Kamareddy Town including its abutting Villages Devanpally, Sarampally, Lingapuram, Tekrial, Paatha Rajampet and Devaipally. The first respondent, being the functional Registrar and Registering Authority, recognized the area of operation of the petitioner society and granted 13 licences in different wards of Kamareddy Municipality. Out of 13 licences, 9 licences were in respect of Kamareddy Town and the remaining four were in abutting Villages. There are more than 80 members in the petitioner society. The Prohibition and Excise Sub- Inspector, SHO, Kamareddy, had submitted a report on 25.11.2002 to the excise authorities stating that in the verification, the society was found to be genuine. While so, the first respondent issued proceedings dated 23.05.2002 directing the petitioner to enroll 77 persons as members. The petitioner filed W.P.No.24264 of 2002, and the same was allowed on 05.12.2002 holding that the respondents had no power under Section 19 of the Andhra Pradesh Cooperative Societies Act to direct admission of members. The petitioner further states that 30 persons applied to the petitioner seeking membership on 18.12.2002 and the managing committee passed a resolution admitting all the 30 persons as members. The petitioner held a general body meeting and expressed their willingness to provide membership to new persons. After disposal of W.P.No.24264 of 2002 on 05.12.2002 holding that the respondent was not having jurisdiction to direct admission of members, the respondent issued five TFT licenses to the third parties in respect of Devanpally Village toddy shop, for which the licence was already issued in favour of the petitioner up to 31.03.2007. The petitioner further states that the second respondent in his proceedings dated 19.07.2002 and the first respondent in his proceedings dated 06.08.2002 clarified that they were not vested with powers for bifurcation of the societies under the provisions of the Andhra Pradesh Cooperative Societies Act. When the petitioner came to know that the respondents were inclined to favour a group of persons enabling them to form a new society, the petitioner submitted its objections before the respondents on 13.12.2002 informing them that membership would be provided to the persons and not to sanction new toddy shops. Challenging the action of respondent Nos.1 to 3 in sanctioning toddy shops in Devanpally Village under TFT licence and proposing to form a new TCS in Kamareddy, the petitioner filed W.P.No.24341 of 2002 and W.P.No.25613 of 2002, and they were disposed of by a common order dated 17.03.2003. Against the said order, W.A.No.509 of 2003 was filed and the same was disposed of on 26.03.2003 directing the first respondent/licensing authority to reconsider the licences granted and to take action if the petitioner society provided membership to the group of new persons. But, respondent Nos.1 to 3 allowed the fourth respondent to form a new society, even though they were not eligible to form a society. Challenging the same, the petitioner filed this Writ Petition as it is contrary to the guidelines 17 and 22 of the Excise Policy 2002-03 published in G.O.Ms.No.234 dated 03.04.1979 and the provisions of the Andhra Pradesh Cooperative Societies Act. 11. The fourth respondent filed a counter affidavit stating that the first respondent had not fixed any area of operation in relation to the petitioner society. The first respondent granted licence to the petitioner only in relation to few wards and the area of operation is confined to those wards only. Most of the members of the petitioner society are contractors and are not economically backward. It is not correct to state that the business of the petitioner society is spread to the entire Kamareddy and neighbouring villages, and the respondents permitted tappers of Devunipalli Village to establish a new society. The petitioner filed W.P.No.25613 of 2002 and the same was dismissed by this Court on 17.03.2003. The writ appeal, being W.A.No.509 of 2003, filed by the petitioner against the said judgment was disposed of on 26.03.2003 upholding the order of the learned single Judge. The petitioner had deprived the actual tappers from their right to have membership and the petitioner society is managed by contractors. The alleged grant of membership to 30 persons, who applied for membership on 18.12.2002, was a bogus transaction. They were not actual tappers, but they were the relatives of the members of the managing committee and their henchmen. The guidelines referred in relation to the excise policy for the year 2002-03 under clause 22 was not mandatory and it was framed only for the administrative convenience of the authorities. W.P.No.25463 of 2007: 12. The petitioners’ case is that Medak Town has 27 wards and out of the said wards, in respect of 10 wards, licence was granted to the Toddy Tappers Cooperative Society, Medak. Most of the members of the said society are not tappers and are being managed by the contractors. Under the Tree for Tappers scheme the respondents have been granting licence to the genuine tappers. Tapping test was also conducted by the officials of the respondents to the petitioners and the petitioners were declared to be qualified as tappers through proceedings in Cr.No.1965/Coop/Sdpt/97, dated 02.07.1998 by the Assistant Commissioner of Prohibition and Excise, Medak District. The petitioners submitted applications to the Toddy Tappers Cooperative Society, Medak, for grant of membership under Section 19 of the Andhra Pradesh Cooperative Societies Act as they are qualified and eligible to be granted membership. But, the said society has not acted on the applications of the petitioners dated 12.08.2003 and hence they approached respondent Nos.1 to 3, who directed the society to consider the cases of the membership of the petitioners. Since the petitioners were agitating for membership, the management of the society attacked them, and in respect of the said altercation, Crime No.59 of 2003 was registered in P.S. Medak Town. However, the said case ended in acquittal. When the society did not admit the petitioners as members, they approached the official respondents for permission to form a new society in respect of the wards left open. Their application dated 06.08.2003 was rejected by the impugned proceedings in Cr.No.B5/1320/2004, dated 19.03.2005. Challenging the same, the present Writ Petition is filed. 13. The second respondent filed a counter affidavit stating that the Government framed comprehensive and consolidated rules under G.O.Ms.No.1128, Revenue (Ex.II), dated 09.09.2007, and they are called, the Andhra Pradesh Excise (Grant of Licence to sell Toddy, Conditions of Licence and Tapping of Excise Trees) Rules, 2007. The same was notified in the gazette on 20.09.2007. As per the said rules, the fourth respondent is competent to fix the number of shops to be established in an area, their location, assignment of trees for tapping under Rule 3(2). The administrative instructions issued by the fourth respondent indicate that there shall be only one society for one village and one shop for one society. Since there is a society already existing in Medak Town, the request of the petitioners to form a second society was forwarded to the fourth respondent for suitable instructions, as the fourth respondent is the competent authority for sanction of the toddy shop. Accordingly, the fourth respondent vide Cr.No.B5/1320/2004, dated 19.03.2005, instructed the petitioners to approach the President, T.C.S.Medak, for their enrollment as members, as there was no provision for formation of another society within the area of operation of the existing society with the same objectives as per the Andhra Pradesh Cooperative Societies Act. Since the petitioners’ grievance is that the existing society is not admitting them as members, they can approach the Tribunal under Section 76 of the Andhra Pradesh Cooperative Societies Act. 14. It is clear from the above averments that Nizamabad Town had originally 36 wards. Later on, it became Corporation and the wards have been increased from 36 to 46. The petitioner in W.P.No.4962 of 2003 was registered and the bylaws of the society show that the area of operation of the petitioner extends to 36 wards of Nizamabad Town. The petitioners in W.P.No.7858 of 2003 and W.P.No.25463 of 2007 were agitating for becoming members of the society and when they failed in their attempt, they formed new societies. The case of the petitioner in W.P.No.28225 of 2005 is that on upgradation of Nizamabad Town as Corporation there are 10 more wards not covered by the area of operation of the petitioner society in W.P.No.4962 of 2003 and hence their application should have been considered in respect of the places not covered by the areas where there were no shops. 15. Learned Counsel for the petitioners in W.P. 4962 of 2003 submitted that when the area of operation of the society is indicated in the byelaws of the Society, no other Society shall be permitted to be formed and no new licenses should be issued to them. In any event, after the date fixed in the Excise Policy, no new licenses shall be granted. On the other hand, learned Counsel for the respondents submit that the Societies are permitted to do business in respect of the shops where licenses were granted and the area of operation is not the criteria. In respect of the shops to which the licenses were not granted, the authorities are entitled to grant licenses to the new shops. They further submit that by virtue of grant of licenses in respect of the new shops, the existing area of operation is not thereby affected. However, the respondents can always consider the grant of licenses for the areas, beyond the area of operation indicated in the byelaws of the society. 16. In view of these rival contentions, the points that arise for consideration in these Writ Petitions are: 1. What is the effect of “area of operation” indicated in the byelaws of a society registered under Andhra Pradesh Cooperative Societies Act in relation to the grant of licenses under the provisions of the Andhra Pradesh Excise Act and the Rules made thereunder? 2. Whether the area of operation is dependent on the licenses granted by the excise authorities in exercise of their powers under the provisions of the Andhra Pradesh Excise Act and the Rules made thereunder, and in respect of the shops to which licenses were not granted to the society formed already, whether the respondents can allow formation of some other society? 3. Whether the Excise Policy framed by the Government from time to time has a binding effect even in the face of express provisions of the Andhra Pradesh Excise Act and the Rules made thereunder? 4. Whether the qualified toddy tappers, who seek membership in a Society, failing in their attempt to get themselves admitted as members of the Society can seek formation of a separate Society without availing the remedies open under the provisions of A.P.Cooperative Societies Act and without pursuing their right to become members? 17. A Society registered under the provisions of the Andhra Pradesh Co-operative Societies Act is a body corporate by the name under which it was registered having perpetual succession and common seal. When ‘area of operation’ is indicated in the byelaws of the Society, the said area can be divided only by bifurcating the society under Section 15-A of the Andhra Pradesh Co-operative Societies Act. The said Section says that if the Registrar is of the opinion that in respect of a Society or Societies in receipt of State aid as specified under Section 43 of the Act it is necessary to amalgamate or merge any Society with any other such