The Government of A.P. and Others vs Toddy Tappers Co-operative Society and Others

P.S. Mishra, C.J.—These appeals under Clause 15 of the Letters Patent of the Court are preferred by the 1st, 3rd, 4th and 5th (together), the second, and the 6th and 7th respondents (together) respectively in Writ Petition No. 14501 of 1996. The writ petitioner - respondent in all these appeals is a Toddy Tappers Co-operative Society, which has, it is not in dispute, been granted licence to sell toddy in retail in Kukatpally. Kukatpally was a village in Balanagar Mandal, District Ranga Reddy, which has since been embraced by the urban agglomeration consisting of Kukatpally Housing Board, Shamsiguda, Bagh Ameer, Janata Nagar, Seetararn Basti and other areas and is converted thus from a village as a quarter of the municipal town of Kukatpally adjoining the twin cities of Hyderabad - Secunderabad. According to the writ petitioner- Society, it alone is entitled to carry on its business at Kukatpally and its area of operation would extend to the above quarters of the town of Kukatpally from which its members are drawn and as many as 3,500 trees, as per the Excise policy of the Government, are allotted to it. Subject to the provisions of the Andhra Pradesh Excise (Lease of Right to sell Liquor in Retail) Rules, 1969, the lease of right to sell toddy in retail, according to the writ petitioner-respondent, is granted by public auction duly notified for the period of one excise year, but as per the first proviso to Rule 2 of the said Rules, where the Commissioner considers it necessary to grant the lease of right to sell liquor in retail in any other manner, he shall do so with the prior approval of the Government in deviation of the public auction in respect of the notified toddy shops. As per Rule 3(2) of the Rules the Commissioner shall, before the publication of the auction under Rule 4, fix the number of shops to be established in an area, their location, assignment of trees for tapping that should be granted to the licencee and as per Rule 4 of the said Rules, the District Collector shall publish a notice in the Andhra Pradesh Gazette or the District Gazette giving full particulars, where it is proposed to grant the lease for sale of liquor in retail in respect of a shop or group of shops, such as the name, locality, area, etc. Writ Petitioner - respondent has alleged that certain toddy shops alone have been notified to be auctioned in Kukatpally Municipal area in the Gazette notifications of the last about ten years upto 1993-94 and no toddy shop of Shamshiguda and Bagh Ameer or New Kuktapally (KPHB) has ever been established or notified for the grant of lease for the retail sale of toddy at any time in any of the Ranga Reddy District Gazette notifications. As per Excise policy on toddy for the year 1994-95 (paragraph 7(b)) no new toddy shops shall be proposed for the year 1994-95. The writ petitioner - respondent has then alleged:

"The same Excise Policy on toddy for the year 1994-95 framed by the Government in G.O. Ms. No. 985, Revenue (Excise-II) Department, dated 28-9-1994 has been adopted and continued vide orders of the Government in G.O. Ms. No. 455, Revenue (Excise-II) Department, dt. 28-9-1995, on the Excise Policy on toddy for the year 1995-96. As per the Excise Policy on toddy for the year 1995-96, whatever toddy shops have been notified for publication in the Gazette Notification which were in the sanctioned list for the year 1993-94 alone shall be given licences and no new toddy shop shall be established any where in the State of Andhra Pradesh and there is a specific prohibition in para 7(b)of the Excise Policy on Toddy for the year 1994-95, which has been adopted and continued for the excise year 1995-96. Para 1.4 of the Excise Policy says that the shops closed due to cancellation of licences during the excise year 1993-94 and which were in the sanctioned list for the year 1993-94 can be permitted to be revived in case a new TCS/TFT comes forward. The total number of shops mentioned and published in the Gazette Notification in the entire State of A.P. for the excise year 1993-94 are 13,185 toddy shops and those toddy shops have been continued for the excise year 1994-95, in which 566 villages where the toddy shops were sanctioned but could not be licenced during the year 1993-94 were also included. I submit that the said sanctioned shops are the old shops which have been approved and fixed by the Commissioner under Rule 3(2) and were also find place in the Dist. Gazette Notification by the respective Dist. Collectors. The Excise authorities have no power or any authority to establish a new toddy shop for the excise year 1994-95 or 1995-96, but they can only revive the old toddy shop, if it was a sanctioned shop, to meet the total number of toddy shops, but cannot establish a new toddy shop in places wherein it was not originally sanctioned or established during the year 1993-94 and 1994-95."

The seventh respondent in the writ petition - Venkateswar Goud, it is alleged, filed an application before the Minister for Excise - 2nd respondent requesting him to consider his case for the grant of a new toddy shop licence at new Kukatpally (KPHB) and the Minister obliged him by the Government of Andhra Pradesh Memo No. 29460/Ex. II-l /96, dated 28-6-1996 and called for a detailed report together with connected records through the special messenger within fifteen days. Pursuant to the said order, the Commissioner of Prohibition and Excise on the next day itself vide his Circular No. 1118/2/96/CPE/E2, dated 29-6-1996, forwarded the memo of the Government dated 28-6-1996 along with the application of Venkateshwara Goud (7th respondent in the writ petition) to the Assistant Commissioner of Prohibition and Excise, Ranga Reddy District, to send a detailed report immediately. The Assistant Commissioner of Prohibition and Excise, Ranga Reddy District, in his Circular NO.E6/4891/96, dated 2-7-1996, while enclosing the documents of the Government Memo as well as the Circular Memo of the Commissioner of Excise to the Prohibition and Excise Inspector, Balanagar, directed him to enquire into the matter and send a detailed report together with records to enable him to submit the same to the Minister for Excise. The writ petitioner-respondent has then alleged:

"I came to know about it only on 19-7-1996 and immediately made enquiries. It appears that there is strict instructions given to all the concerned right from the Sub-Inspector, Inspector, Proh, & Excise, Balanagar, to the offices of the Superintendent, Asst. Commissioner, Dy. Commissioner and Commissioner of Prohibition & Excise and I could not secure any of the material papers such as the application of Sri Venkateshwara Goud or the Government Memo, except the directions of the Asst. Commr. of Proh, & Excise, R.R., dt. 2-7-1996, through a friend of Venkateshwara Goud, and it appears that the said Venkateshwara Goud submitted an application in his individual capacity and on the said application, the Hon''ble Minister for Prohibition & Excise, made an endorsement and pursuing the matter through his Personal Secretary and Personal Asst. to expedite the matter for sanctioning a new toddy shop as early as possible for the obvious reasons and therefore, the file is being moved in an unprecedent and abnormal course speedily and expeditiously."

The first respondent''s counter affidavit, which is allegedly based on the records available with the deponent - Joint Secretary to the Government, Revenue (Excise-II) Department, states, inter alia, as follows:

"Prior to the Excise Year 1993-94, most of the shops in the State and shops in the Districts of Hyderabad and Ranga Reddy in particular were auctioned to highest bidders in open auction as per notifications issued under the A.P. Excise (Lease of Right to sell Liquor in Retail) Rules, 1969.

It is submitted that from 1993-94 onwards due to discussions and demands of the Tappers Community representatives, auction system was given up for selling Toddy and licences were issued to the Tappers by profession. This was done either by registering a Toddy Tappers Co- operative Society under the A.P. Co-operative Societies Act, 1964 or under Tree for Tappers Scheme.

Because of the change in the policy Government is losing heavy amounts as nominal rentals are being collected from the Societies now Without change from year to year. This was done primarily to benefit the poor among the tapper community for providing them livelihood.

The Excise Policy for 1994-95 is adopted for the Excise year 1995-96 by the Government by issuance of G.O.Ms. No. 455, Revenue (Excise-II) Department, dated 28-9-1995. It is also contained in this G.O. (which is appended in the material papers herewith) that licences for selling toddy will be renewed automatically."

The case of the first respondent, on the above basis, is that it is not true to allege that the Excise Policy for 1995-96 does not permit establishment of any new toddy shop in the State and asserts that Clause 7 sub-clause(b)of the Excise Policy itself provides an exception that a new shop can be established within the total number of 13,185 shops as per Clause 7 sub-clause (a) of the Excise Policy for the year 1995-96 and as per Clause 2 sub-clause (4) of the Excise Policy even a hamlet of a village can have a new shop, apart from the shop in the village, if there are tappers in the hamlet requiring a separate shop for them for which purpose such tappers can be formed into a Society or licence to seli granted to them under TFT scheme (Tree for Tappers). There is a further mention in this affidavit of the policy that if there are more than one Cram Panchayat in a Revenue village, a separate Society for each Gram Panchayat can be considered afresh and such Society be permitted to sell toddy in their own licenced premises and there is also inter-convertibility of a Society into TFT scheme and vice-versa as per Clause 2 sub-clause (1) of the Policy, if the majority of the tappers desired so. As per Clause 2 sub-caluse (2) of the Policy, "the Society groups have to be split up into smaller entities in order to curb monopoly and ensure benfits to the poor tappers". It is not disputed that at present the upper limit of number of shops is fixed at 13, 185, It is, however, asserted in the counter that this number is not so far reached and there are still as many as 37 shops short in Ranga Reddy District itself.

The second respondent has filed a separate counter and has stated that being the Minister for Prohibition and Excise, the toddy tappers meet him to ventilate their grievances and,

"During one such meeting, one Sri Venkateshwara Goud has filed an application before me requesting to consider his case for the grant of anew toddy shop and in the routine manner I have made endorsement on the application "Please call for records, examine and circulate within 15 days" It is also pertinent to mention here that on that day similarly tappers from Mustipally Village, Pedakothapally Mandal, Mahaboobnagar District and tappers from Srikalahasti have made similar applications and I have made the same endorsement. Normally, whenever the persons come and make an application, ventilating their grievances, an endorsement is made asking the lower officials to look into the matter."

He has, however, denied the allegation of being interested in the matter in any manner, but also stated that,

"application has been filed by Sri M. Chandraiah Goud before the then Commissioner of Prohibition and Excise, Hyderabad on 7-9-95. The Commissioner of Prohibition and Excise has issued proceedings in Cr. No. l8051/95/CPT/B.2, dated 7-9-1995 to the Prohibition and Excise Superintendent, Ranga Reddy District to take necessary action as per rules on the representation, on the receipt of toddy policy for 1995-96. Thereafter, he made another representation to the Principal Secretary, Revenue Department, Hyderabad on 20-10-1995 and the same was forwarded to the Commissioner of Excise on 28-10-1995 in Memo No. 70348/Ex.11-I/954. Thereafter, on 2-12-1995 a letter was written by the Commissioner of Prohibition and Excise to the Principal Secretary to Government. Then on 19-12-1995, a report was called for requesting to furnish details with regard to the availability of trees. The Commissioner of Prohibition and Excise has sent a report on 22-12-1995. Then, after considering all the reports the G.O. Ms. No. 50, dated 11-1-1996 was issued."

We have no reason in this appeal to go further to detail the facts from the affidavits of the oilier respondents in the writ petition or the reply affidavit of the writ petitioner and also to go into the specific discussions and findings recorded by the learned single Judge in respect of each item of controversy between the parties, as, in course of the hearing of the appeal, it has transpired that at least in respect of three findings there is a need for a fresh look into the facts of the case, namely,

(1) Whether there is any basis for the learned single Judge to hold that there is some force in the contention of the petitioner-Society that in areas where the toddy trade is lucrative, the respondents in the writ petition started passing orders in contravention of the general policy after the second respondent assumed office as Excise Minister for extraneous considerations and for his holding, that the action of the respondents in issuing the impugned order for immediate report as indicated above is contrary to the general policy and not in furtherance of the object to help the poor tappers, but for extraneous consideration;

(2) Whether there is any basis for the learned single Judge to hold that legal mala fides and bias on the part of the second respondent and his Subordinate Officers are established beyond reasonable doubt; and

(3) Whether the finding of the learned single Judge that once a revenue village is included in the municipality for local governance, the village loses its identity for all purposes and the question of identifying that area on the basis of revenue village thereafter does not arise and hence the action of the Government in trying to give licence to a part of municipality by identifying it as a revenue village cannot be countenanced, has any basis.

It is trite and unexceptionable that malice in fact and malice in law are two well demarcated and well understood principles which strike at the root of any action of a person or authority who has to discharge a public duty. Malice in law is distinguished from malice in fact on principle that someone, while acting innocently, may do a thing for irrelevant considerations or without relevant considerations or considerations which are extraneous for the purpose and thus the action or the doing is inflicted by malice in law. Malice in fact, however, is referable to the presence of animus or some sort of a bias in the mind of the doer in discharge of his public duty and the doing, which is questioned, is intended to cause injury to someone or to favour someone. We are not elaborately going into these aspects for the simple reason that a glance through the judgment of the learned single Judge and the manner in which the above findings have been recorded are enough to convince that parties have evidently not addressed the Court on the principles as above and the issues as to malice in fact and malice in law have got confused with each other. While it is well settled that malice in law is generally a matter of inference, malice in fact is always a matter which needs specific allegations and proof. One has to treat with care in entertaining either of the pleas of malice and unless there are specific materials to hold in favour of the existence of either of the two, it is better that they are avoided.

On question as to the identity of the area of the operation of business of the writ petitioner - Society there is a need, in our view, of more clearer averments than are available on the record of the case for a clear understanding how all concerned identified, after the constitution of the municipality, the location and the area assigned to the writ petitioner. Even if one is left with what is available on the record, one will have to be sure, before any specific finding is recorded, that a reference to the revenue village in the counter affidavit of the first respondent is a clear identification of the area assigned to the writ petitioner - Society and also whether, when admittedly trees falling in several other areas are assigned to the writ petitioner - Society, the area which must be deemed to be reserved for the writ petitioner should include all such quarters of the municipality in which trees allotted to the writ petitioner - Society are located. These, however, are not the only aspects but a few only. There may be other aspects which one will have to advert to before any stand is accepted as correct in respect of this question.

The questions whether there is any violation of the general policy or whether there is any variation in the policy of the Government, however, are such which cannot be answered in the absence of examination of the excise policy in respect of retail sale of toddy for the year 1995-96 and for knowing whether what the writ petitioner has alleged is the policy or what the respondents have asserted is the policy, it will be necessary to see whether the Government has introduced any new policy for the year 1995-96 and if any policy in this behalf is adopted, at what level of the Government has it been done and the level at which it has been done is the level of the executive power of the Government which can be ascertained by looking into the Rules of Executive Business framed under Article 166 of the Constitution of India.

Since the errors in this behalf have resulted in the observations in the judgment which appear to affect the conduct of the second, the third, the fourth and the fifth respondents in the writ petition and are suggestive of the fact that there has been an undue favour extended to the sixth respondent in the writ petition and the other likely beneficiary would be the seventh respondent, we are of the view that a fresh opportunity should be afforded to the parties to file, if so advised, further affidavits and materials in support of their respective cases and the stage of the proceeding for any such filing of further affidavits and materials cannot evidently be the appeal, which is being heard only on the question whether the impugned judgment is valid or not. Any order invalidating the impugned judgment for the reasons as above cannot obviously bring the proceedings to an end unless further opportunity is afforded to the parties by remitting the matter to the writ Court for fresh hearing in accordance with law. It is obvious that until a fresh hearing and a fresh order in the matter on all relevant issues including the three referred to above, nothing stated in the impugned judgment can be sustained.

The appeals are accordingly allowed. The impugned judgment is set aside and the case is remitted to the Writ Court for a fresh hearing in the light of the observations as above. Office is directed to post the writ petition for hearing before a Division Bench on 7-10-1996.