Tirumala Balaji Wines and Others vs Commissioner of Prohibition and Excise and Others

V.V.S. Rao, J.—It is necessary to dispose of all the three writ petitions by a common order as common questions of fact and law arise for consideration. All the petitioners were granted licence in Form IL-24 under the A.P. Indian Liquor and Foreign Liquor Rules, 1970 (hereafter called ''the Rules'') during the year 1998-99. The licences were renewed from time to time. The licence granted for the year 2001-2002 was to expire on 31-3-2002. In that context, the third respondent issued a notice dated 18-3-2002 informing the petitioners that the licence fee payable for the year 2002-2003 will be Rs. 4,50,000/-. By another notice dated 26-3-2002, the third respondent informed the petitioners that licence fee payable is Rs. 8,25,000/. They contend that the population of Dhone town is 46,611 and, therefore, the licence fee payable is Rs. 4,50,000/- only. The respondents are taking into consideration the population of Dharmavaram, Dhorapalli, Gosanipalli, Yerraguntla and Venkatanayanipalli villages also as part of Dhone Village/town, in which event the population would be 56,276, and insisting that they should pay the licence fee @ Rs. 8,25,000/-. They obtained a certificate dated 26-3-2002 from the Mandal Parishad Development Officer, Dhone, to the effect that the five villages namely, Dharmavaram, Dhorapalli, Gosanipalli, Yerraguntla and Venkatanayanipalli have been bifurcated as separate Gram Panchayats. They also obtained another certificate dated 26-3-2002 from the Mandal Revenue Officer, Dhone to the effect that the population of Dhone town is 46,611 and requested the second respondent to renew the licences by collecting licence fee @ Rs. 4,50,000/- by treating the population of Dhone as less than 50,000. The third respondent refused to renew the licence, and, therefore, they filed these writ petitions praying for a writ of mandamus declaring the action of the respondents in demanding Rs. 8,25,000/-for renewal of licences for the year 2002-2003 is illegal and for a consequential direction to the respondents to renew their licences by collecting licence fee @ Rs. 4,50,000/-.

This Court, while admitting the writ petitions on 28-3-2002 passed the following interim orders:

Learned Counsel for the petitioners submits that there is no final publication of 2001 census. He has also submitted that the petitioners would pay the balance amount of licence fee basing on the population figures of 2001 census as soon as the final publication is made for the excise year 2002-2003...... In the writ affidavit, the petitioners have not disputed the powers of the respondents in collecting the licence fee on the basis of the final publication of the census of 2001...... Heard the learned Government Pleader for Prohibition and Excise appearing for the respondents.......... Under the above circumstances, there shall be an interim direction to the respondents to accept the licence fee from each of the petitioners at Rs. 4,50,000/- and consider renewal of their licences for the excise year 2002-2003, subject to further orders of this Court.

Now it is reported that pursuant to the interim orders of this Court, the petitioners were granted renewal of IL-24 licence for the year 2002-2003 by collecting licence fee @ Rs. 4,50,000/- only. As the authorities were directed to renew the licences subject to further orders of this Court, whether or not the petitioners are liable to pay balance of licence fee over and above Rs. 4,50,000/- would depend on the decision in these writ petitions.

A counter-affidavit is filed on behalf of the respondents stating that as per 2001 census, the population of Dhone revenue village is 56,276 and, therefore, the licence fee is Rs. 8,25,000/-. Based on such census report, the third respondent as having issued notice dated 20-3-2002 requesting the petitioners to remit Rs. 8,25,000/- for renewing the licence for 2002-2003. It is also stated that the population of Dhone Gram Panchayat is 46,611 and whereas the population of other five villages forming part of Dhone revenue village cumulatively is 9,665. It is further stated that the Commissioner of Prohibition and Excise, the first respondent herein, issued instructions vide his Memo in Cr.No.1701/2002/CPE/ G2, dated 13-2-2002 directing renewal of licence for the year 2002-2003 obtaining an undertaking on non-judicial stamp paper of Rs. 100/- with regard to payment of differential licence fee as and when census are published for 2001. Therefore, the licences were renewed after taking such undertaking.

Sri P. Nagendra Reddy, learned Counsel for the petitioners, submits that the five villages do not form part of Dhone revenue village. They were already declared as separate Gram Panchayats and, therefore, the population of those five village cannot be considered for the purpose of total population of Dhone village/town. He, also submits that when once part of a revenue village or a hamlet of a revenue village, is bifurcated and separate Gram Panchayat is established, it ceases to be part of the original revenue village and, therefore, treating all the five villages as forming part of Dhone revenue village is unsustainable. He submits that the population of Dhone village/town is 46,611 and, therefore, the second respondent is not entitled to collect licence fee @ Rs. 8,25,000/- from each licensee by treating the population of Dhone as exceeding 50,000. The learned Counsel, relied on the decision of this Court in Edupalli Jagannatha Rao v. Regional Inspector of Municipal Councils 1955 (1) An.WR 341. Learned Counsel also submits that the basis for fixing licence fee is the population of a village/town/city as per the latest census and the 2001 census has not been published finally, it is not competent for the excise authorities to revise or re-fix the licence fee based on the provisional census.

Learned Assistant Government Pleader for Excise, Ms.Ramcmi, submits that as per the provisional census 2001, phone and other five villages put together were treated as one revenue village and, therefore, the population for the purpose of fixation of licence fee is 56,279. Hence, the petitioners are liable to pay Rs. 8,25,000/-. She placed before me xerox copy of the relevant page from the provisional census 2001 of Kumool District. The statement contains particulars of habitation, name of the village, number of households, male and female population as per 2001 census. The relevant portion reads as under.

Sl. No. Name of the Revenue Village Name of the habitation No. of Households Population as per 2001 Census

Male Female Total

Dhone Dhone 9309 23273 23338 46611

Dharmavaram 577 1280 1253 2533

Dhorapalli 455 1165 1117 2282

Gosanipalli 365 945 883 1828

Yerraguntla 280 724 694 1418

Venkatanayanipalli 357 933 871 1804

The above statement would show that Dhone, Dharmavaram, Dorapalli, Gosanipalli, Yarraguntla and Venkatanayanipalli are all treated as habitations which are included in one revenue village i.e., Dhone. Therefore, that contention of the respondents that the population of Dhone revenue village is 56,276 as per 2001 census is correct.

Under the Rules, the licensee is required to pay annual licence fee as per Rule 25 read with the schedule appended to the Rules. Item 8 of the schedule prescribes annual fee for a licence in Form IL-24 for establishing a retail liquor shop. The licence fee payable depends on the population of the area. For the purpose of the rules, a village or town or city is considered as a unit. How to determine the population? Rule 3(q) of the Rules defines "population" as the population of a village/town/city as per the latest census. "Village" is defined as to mean a revenue village in census. Item 8 of the schedule, as already mentioned, lays down that the earlier the licence fee for Form IL-24 shop was Rs. 3,00,000/- where the population of a village/town/city does not exceed 10,000. If the population of a village/town/city is above 10,000, but does not exceed 50,000, the licence fee is Rs. 4,50,000/- and whereas the licence fee is Rs. 8,25,000/-. If the population of a village/ town/city is above 50,000 and does not exceed Rs. 3,00,000. If the population of a village/town/city is above 3,00,000, the licence fee payable is Rs. 12,34,000/-.

The licence fee is prescribed for a village or town or city. The Rules define what is a revenue village. It must be remembered that nowhere the Rules refer to Panchayat or hamlet. Insofar as it is relevant to this case, the entire village is taken as a unit. Admittedly, Dhone is not a Municipality or Municipal Corporation or town though it may be locally called as town. Learned Counsel for the petitioners refers to Sections 3 and 4 of the A.P. Panchayat Raj Act, 1994 in support of his contention that a revenue village on being declared as such becomes a Gram Panchayat and, therefore, when other five villages were declared as Gram Panchayats, they became separate revenue villages and their population cannot be added to the population of Dhone revenue village or Dhone Gram Panchayat.

A.P. Panchayat Raj Act, 1994 (hereafter called ''the Panchayat Act'') defines a village {vide Section 3(42)} as any local area which is declared to be a village under the provisions of the said Act. Be that as it is, Section 3 of the Panchayat Act stipulates that the Commissioner of Panchayat Raj may declare any revenue village or hamlet thereof to be a village for the purpose of the Act. What is the effect of such declaration of a revenue village as village for the purpose of the Panchayat Act? Section 4(1) lays down that a Gram Panchayat shall be deemed to have been constituted for a village on the date of publication of the notification u/s 3 in respect of that village. That is to say when once a revenue village is declared as a village u/s 3(4), and a deeming provision comes into effect and for the purpose of Panchayat law, it is deemed to be a Gram Panchayat. The explanation to Sub-section (1) of Section 3 of the Panchayat Act describes a "revenue village" as to mean a village with the revenue accounts of the Government after excluding therefrom the area, if any included in Municipal Corporation, Municipality, a major settlement and a cantonment. Under Sub-section (2) of Section 3, it is competent for the Commissioner of Panchayat Raj to form a new village by separation of local area from any village or by uniting two or more villages or parts of villages or by uniting any local area to form part of the village in accordance with the Rules. It is also competent for the Commissioner of Panchayat Raj to increase the local area under a village or diminish local area of any village. Thus, a reading of Sections 3 and 4 read with A.P. Gram Panchayat (Declaration of Village) Rules, 1994 issued in exercise of power under Sub-sections (1) and (2) of Sections 3 and 268(1) of the Panchayat Act would show that a main village and its two hamlets are treated as a village (i.e., revenue Village) in the village accounts of the Government for the purpose of the Panchayat Act. It is not necessary that a village for the purpose of the Panchayat Act should mean only one revenue village. It could be any number of revenue villages treated as one village for the constitution of panchayat.

What would be effect of declaring a part of a revenue village or a hamlet thereof as a village u/s 3(1) of the Panchayat Act duly constituting a new panchayat? Learned Counsel for the petitioners submits that the five villages which were hitherto hamlets of Dhone Village were duly constituted as separate Gram Panchayats and, therefore, they cannot be treated as forming part of Dhone village. Reliance is placed on Rule 12(1)(iii) of the A.P. Gram Panchayat (Declaration of Village) Rules, 1994, it lays down that "it shall be competent for the Commissioner to cancel notification u/s 3(2)(f) where the revenue village or part thereof declared as a village u/s 3(1) of the Panchayat Act, ceases to be revenue village due to submersion or de-population and the necessity for gram panchayat is felt. He also submits that as per Rule 3(q) of the Rules, census figures means as published finally in the official gazette and, therefore, based on the provisional census, enhancement cannot be resorted to. I am not able to agree with the learned Counsel for the petitioners that the moment the five villages are constituted as Gram Panchayats (this fact is also denied by the Asst. Govt. Pleader), they cease to be part of Dhone revenue village. Rule 12(1)(iii) of the Panchayat Rules does not support such contention. It only says that the Commissioner can cancel the notification u/s 3(1) of the Panchayat Act when such Gram Panchayat ceases to be revenue village due to submersion (by reason of an irrigation or hydel power project) or de-population and such necessity of treating the village as gram panchayat. A revenue village or part of such village which is separate and declared as panchayat does not cease to be part of the revenue village from which it was carved out for the purpose of panchayat. It must be remembered that constitution of panchayat is different from constitution or continuation of village as a revenue village for the purpose of revenue accounts. A panchayat is relevant for the purpose of local administration whereas a revenue village is relevant for the purpose of revenue administration. The rule making authority was very much aware of this distinction and, therefore, has taken abundant care to define a village as revenue village as per the census for the purpose of the A.P. Indian Liquor and Foreign Liquor Rules, 1970.

The question whether provisional census can be taken into consideration by the Excise authorities for enhancement of licence fee was considered by my learned Brother Sri Justice A. Gopala Reddy in P. Narasimha Rao and Others Vs. Government of Andhra Pradesh and Others, , wherein it was held that in the absence of any Rule that population means as officially published, any publication can be a factor for fixing rentals/licence fee basing upon the population figures so published.

In Edupalli Jagannatha Rao v. Regional Inspector of Municipal Councils (supra), this Court held that the expressions "village" and "revenue village" used in the Madras Village Panchayats Act, 1950 are not synonymous and that a "revenue village" means the area which is recognised as a village in the revenue accounts while the word "village" in the Panchayat Act means any local area which is declared as a village under the Act. It was also held that a village can be a revenue village with portions of other villages added to it, while a hamlet or a revenue village if it is notified by the authorities to be a revenue village for the purpose of the Panchayat Act.

In Sri Rama Wines and Others Vs. Excise Superintendent, Adilabad, , the question that arose before a Division Bench of this Court is whether it is competent to the licensing authority to impose conditions while granting licence. Having regard to the provisions of the A.P. Excise Act it was held thus:

The licence though was granted u/s 28 of the Act, is subject to certain conditions as prescribed in the Rules. It is true that conditions of licence do not contain any such liability to pay any enhanced licence fees. But the conditions do not place any embargo on the authorities to collect the same. When such is the situation and when the authorities have been clothed with the power to require the applicant to given an undertaking for such payment, it cannot be said that the undertaking is contrary to the letter and spirit of the licence or Section 28 of the Act. The counterpart agreement is a statutory one and an undertaking has been given as prescribed in Clause (iv) of Form FL 28 under Rule 30. It is not far to seek the reason for requiring the licensee to give such an undertaking. The population of a place varies due to the lapse of time and also for the reason of merger of another area into the concerned village/town/municipality. Many other situations also can be visualized. These situations cannot be anticipated on the date of grant of licence. Since the licence fees was payable depending upon the density of the population, the Act gives the power to the authorities to require the licensee to pay the enhanced licence fee as and when levied, even during the currency of the period of licence. This power having been given by the Act itself, it cannot be said that it runs counter to the licence granted under the Act.

The learned Asst. Government Pleader has produced before me the letters addressed by the District Collector, Kurnool, Revenue Divisional Officer, Kurnool and Mandal Revenue Officer, Dhone, to the Excise authorities. As seen from the population figures supra, Dhone is a revenue village and the five villages or habitations namely, Dharmavaram, Dorapalli, Gosanipalli, Yerraguntla and Venkatanayanipalli, are all included in Dhone revenue village and, therefore, for the purpose of the Rules, the population of Dhone revenue village has to be taken into consideration. Further, as already seen, under Rule 3(q) of the Rules, population means the population of the revenue village as per the census.

In the result, for the above reasons, the writ petitions fail and are accordingly dismissed. The interim order dated 28-3-2002 stands vacated. It shall be open to the respondents to collect the differential licence fee from the petitioners over and above Rs. 4,25,000/-, if not already paid for the excise year 2002-2003. It is also open to the respondents to take appropriate action at the time of renewal of licence. There shall be no order as to costs.