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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.4832  OF 2012 (Arising out of SLP (C) No. 1758 of 2011)

Village Panchayat, Calangute  … Appellant

Versus

The Additional Director of Panchayat-II and Others … Respondents

with

CIVIL APPEAL NO. 4833 OF 2012 (Arising out of SLP (C) No. 10569 of 2011)

J U D G M E N T

G. S. Singhvi, J.

1. Leave granted.

2. Whether  a  Village  Panchayat  established  under  Section  3  of  the  Goa  

Panchayat  Raj  Act,  1994  (for  short,  ‘the  Act’)  or  any  other  statutory  

dispensation existing prior to the enactment of the Act has the locus to file a  

petition under Article 226 and/or 227 of the Constitution for setting aside an  

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order  passed by the  designated  officer  exercising the power  of  an appellate  

authority  qua  the  action/decision/resolution  of  the  Village  Panchayat  is  the  

question  which  arises  for  consideration  in  these  appeals  filed  against  order  

dated  18.08.2010  passed  by  the  learned  Single  Judge  of  the  Bombay  High  

Court, Goa Bench in Writ Petition Nos. 16 and 312 of 2010.

3. M/s. Kay Jay Constructions Company Pvt. Ltd. (hereinafter described as,  

‘the company’) (respondent No.4 in the appeal arising out of SLP (C) No.1758  

of  2011)  was  granted  permission  by  the  appellant  in  2006  for  raising  

construction on property bearing Survey No. 362/12 and part of Survey No.  

362/10 at Porbawado, Calangute, Bardez.  The company is said to have illegally  

constructed a  wall  and thereby blocked access  to  the water  well  situated in  

Survey No.362/10 and the chapel situated beyond Survey No.362/12 as also the  

existing water drains.  When the local residents complained against the illegal  

construction, the appellant passed resolution dated 24.03.2008 for revocation of  

the occupancy certificate, which was issued by the Secretary on the basis of  

what  were  termed  as  manipulated  resolutions  passed  on  22.12.2007  and  

28.02.2008.  The  appellant  passed  another  resolution  dated  25.3.2009  and  

revoked the permission granted to the company.  The latter challenged the same  

by filing Panchayat Petition No.6/2009 on the ground that the decision taken by  

the appellant was contrary to the rules of natural justice.  On realizing that the  

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action  taken  by  it  was  not  proper,  the  appellant  revoked  resolution  dated  

25.03.2009.  Thereafter,  the  Sarpanch  issued  notice  dated  29.7.2009  under  

Section 64 of the Act and directed the company to stop further construction.  

Simultaneously, he fixed 4.8.2009 as the date for inspection of the site.  The  

company challenged the notice in Panchayat Appeal No.12/2009.  Respondent  

No.1 - the Additional Director of Panchayat entertained the appeal and passed  

an ex-parte interim order dated 3.8.2009.

4.  In the meanwhile, application dated 24.7.2009 was made on behalf of  

the company for grant of permission to use the property for running a guest  

house.  The same was rejected by the appellant vide resolution dated 4.8.2009.  

The Managing Director of the company challenged the decision of the Gram  

Panchayat in Panchayat Appeal No.174/2009. On being noticed, the appellant  

made a request that hearing of Panchayat Appeal No. 174/2009 may be deferred  

till the disposal of Panchayat Appeal No. 12/2009 and it may be permitted to  

inspect the construction made by the company.  Respondent No.1 rejected the  

appellant’s request and fixed Panchayat Appeal No.174/2009 for final hearing.

5. It  is  borne  out  from  the  record  that  some  residents  had  also  filed  

complaint before Block Development Officer, Bardez, Goa against the illegal  

construction raised by the company and the consequential blockage of access to  

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the well and change of the natural flow of rain water resulting in water logging.  

Initially, the Block Development Officer passed an injunction order against the  

company but after considering the latter’s reply, he dismissed the complaint by  

observing that the construction made by the company was not illegal and any  

restriction on the use of property would seriously prejudice its cause.

6. The appellant challenged orders dated 3.8.2009 and 30.11.2009 passed  

by  respondent  No.1  and  order  dated  19.10.2009  passed  by  the  Block  

Development  Officer  in  Writ  Petition  No.16/2010  on  the  ground  that  

respondent No.1 did not have the jurisdiction to entertain an appeal against the  

notice issued under Section 64 of the Act and, in any case, such notice could not  

be stayed under Section 178.  It was also pleaded that even if the appeal filed by  

the company was treated as maintainable, there was no justification to pass an  

interim order which had the effect of allowing the appeal.  As regards the order  

of  the  Block  Development  Officer,  it  was  pleaded  that  he  could  not  have  

exercised power under Section 66 of the Act and disposed of the complaint filed  

by the local residents and thereby allowed the company to continue the illegal  

construction which had effectively blocked access to the water well and the  

chapel.  

7. During  the  pendency  of  Writ  Petition  No.16/2010,  respondent  No.1  

passed  final  order  dated  12.02.2010  in  Panchayat  Appeal  No.  12/2009  and  

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directed the appellant to reconsider the application made by the company for  

grant of permission to use the property for running a guest house. The appellant  

challenged that order in Writ Petition No. 312/2010.  

8. The learned Single Judge of the High Court relied upon the order passed  

in  Writ  Petition  No.620/2009  and  dismissed  both  the  writ  petitions  as  not  

maintainable.

9. Shri Shyam Divan, learned senior counsel relied upon the judgment of  

the  learned Single  Judge  in  Village  Panchayat  of  Calangute  v.  The Deputy  

Director of Panchayats 2004(2) Goa LR 497 and of the Division Bench of the  

Kerala High Court in Karunagappally Grama Panchayat v. State of Kerala 1996  

(1) KLT 419 and argued that summary dismissal of the writ petitions was not at  

all warranted because the issues raised by the appellant were of considerable  

public importance.  Shri Divan submitted that the illegal construction raised by  

the company has the effect of preventing the public from having access to the  

water  well  in  Survey  No.  362/10  and  the  chapel  situated  beyond  Survey  

No.362/12 and argued that  the appellant  being a  representative  body of  the  

people of the village has the right to question the orders passed by respondent  

No.1 and the Block Development Officer and the High Court could not have  

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non-suited  it  by  accepting  the  narrow  interpretation  of  the  term  ‘person  

aggrieved’.  

10. Shri V.C. Daga, learned senior counsel for the company relied upon the  

judgment  of  the Division Bench of  the High Court  in  Village Panchayat  of  

Velim v. Shri Valentine S.K.F. Rebello and another 1990(1) Goa L.T 70 and  

order dated 13.08.2010 passed by learned Single Judge in Writ Petition No.  

620/2009 and batch and argued that the writ petitions filed by the appellants  

were  rightly  dismissed  as  not  maintainable.  Shri  Daga also  relied  upon the  

judgment in Rex v. London Quarter Sessions Ex parte Westminster Corporation  

(1950) 1 KB 148 and argued that the appellant cannot be treated as a ‘person  

aggrieved’  by  the  orders  passed  by  respondent  No.1  and  the  Block  

Development  Officer.   Learned  senior  counsel  also  pointed  out  that  Writ  

Petition  No.  5/2010  filed  by  the  local  residents  questioning  order  dated  

19.10.2009 passed by the Block Development  Officer  was dismissed by the  

learned Single Judge vide order dated 20.10.2010 and argued that in view of  

that order the appellant is estopped  from questioning order dated 19.10.2009 .

11. We have considered the respective submissions.  Before independence,  

majority population of the States which merged in the Union was rural.  After  

independence  and  even  now  India  continues  to  be  a  pre-dominantly  rural  

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country. There are almost six lakh villages in the country and almost 75% of the  

population lives in the villages.  Article 40 of the Constitution, which enshrines  

one of the Directive Principles of State Policy was incorporated in the Draft  

Constitution in the light of the suggestions made by S/Shri M.A. Ayangar, N.G.  

Ranga,  Surendra Mohan Ghose and Seth Govind Das,  all  of whom strongly  

advocated that the dream of the Father of Nation of initiating democracy at the  

grass root (rural India) be translated into reality by making Panchayats as units  

of self-Government.  This Article mandates the State to take steps to organize  

Village Panchayats and endow them with such powers and authority as may be  

necessary  to  enable  them  to  function  as  units  of  self-Government.  

Notwithstanding the mandate of Article 40, the State failed to take effective  

steps  to  make  Village  Panchayats  as  units  of  self-Government.   In  1977,  a  

Committee was constituted under the chairmanship of  Shri  Ashok Mehta to  

evaluate  Panchayati  Raj  institutions and their  functioning.   In its  report,  the  

Committee observed that the existing model of Panchayats has failed to transfer  

the  fruits  of  democracy  to  the  weaker  sections  of  society  because  they are  

dominated mostly by socially and economically privileged people.  

12. In  1992,  the  Constitution  (Seventy-third  Amendment)  Act  was  

introduced  in  Parliament  and  the  existing  Part  IX  was  substituted.   The  

background in which this amendment was introduced is evinced from the first  

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two paragraphs of the Statement of Objects and Reasons, which are extracted  

below:  

“Though  the  Panchayati  Raj  institutions  have  been  in  existence for a long time, it  has been observed that  these  institutions  have  not  been  able  to  acquire  the  status  and  dignity of  viable  and responsive  people's  bodies due to  a  number of  reasons  including absence  of  regular  elections,  prolonged  supersessions,  insufficient  representation  of  weaker  sections  like  Scheduled  Castes,  Scheduled  Tribes  and women, inadequate devolution of  powers and lack of  financial resources.   Article 40 of  the Constitution which enshrines one of  the  directive principles of State Policy lays down that the State  shall take steps to organise Village Panchayats and endow  them with such powers and authority as may be necessary to  enable them to function as units of self-government. In the  light of the experience in the last forty years and in view of  the shortcomings which have been observed, it is considered  that  there  is  an  imperative  need  to  enshrine  in  the  Constitution  certain  basic  and  essential  features  of  Panchayati  Raj  institutions  to  impart  certainty,  continuity  and strength to them.”

13. The aforesaid amendment is a turning point in the history of local self-

Government.  By  this  amendment  Panchayat  became  an  ‘institution  of  self-

governance’  –  Article  243(d)  and  comprehensive  provisions  came  to  be  

incorporated  for  democratic  decentralization  of  governance  on  Gandhian  

principle  of  participatory  democracy.  The  Panchayati  Raj  institutions  

structured under 73rd Amendment are meant to bring about sweeping changes in  

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the  governance  at  the  grass  root  level.   By  this  amendment,  Parliament  

introduced three tier system of Panchayati Raj institutions at Village, Block and  

District  levels.   Article  243-C provides for  composition of  a  Panchayat  and  

filling up of the seats in a Panchayat by direct election.  Article 243-D provides  

for reservation of seats and Article 243-E provides for duration of Panchayat.  

Article 243-F enumerates the grounds of disqualification of membership of the  

Panchayat  and  Article  243-G  prescribes  the  powers,  authority  and  

responsibilities  of  a  Panchayat.   Article  243-H  gives  power  to  the  State  

Legislatures  to  enact  law  and  authorise  a  Panchayat  to  levy,  collect  and  

appropriate  taxes,  duties,  tolls  and  fees;  assign  to  a  Panchayat  such  taxes,  

duties, tolls and fees levied and collected by the State Government and also  

provide for making such grants-in-aid to the Panchayats from the Consolidated  

Fund of the State.  Clause (d) of this Article envisages a legislative provision  

for constitution of appropriate provisions for crediting all monies received by or  

on behalf of the Panchayats and also for withdrawal of such monies.  Article  

243-I  envisages  constitution  of  Finance  Commission  to  review  financial  

position of the Panchayats.  Article 243-K (1) declares that the superintendence,  

direction and control of the preparation of electoral rolls for, and the conduct of,  

all elections to the Panchayats shall be vested in a State Election Commission.  

Clause  4  of  this  Article  empowers  the  State  Legislature  to  make  law with  

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respect  to  all  matters  relating  to,  or  in  connection  with,  elections  to  the  

Panchayats.  By virtue of Article 243-L, the provisions of Part IX have been  

made  applicable  to  the  Union  Territories.   Article  243-M  declares  that  

provisions  of  Part  IX shall  not  apply to  the Scheduled Areas  referred  to  in  

clause (1) and the tribal areas referred to in clause (2) of Article 244, the States  

of Nagaland, Meghalaya and Mizoram, hill areas in the State of Manipur for  

which District Councils exist as also the hill areas of Darjeeling.  Clause 3(a) of  

this Article excludes the application of the provisions relating to reservation of  

seats  for  the Scheduled Castes  insofar  as  the State  of  Arunachal  Pradesh is  

concerned.  Article 243-N contains a transitory provision for continuance of the  

existing laws for a maximum period of one year.  Article 243-O contains a non-

obstante clause  and  declares  that  the  validity  of  any  law  relating  to  the  

delimitation of constituencies or the allotment of seats to such constituencies,  

made or  purporting to  be made under  Article  243-K,  shall  not  be called  in  

question in any Court and that no election to any Panchayat shall be called in  

question except by an election petition presented to such authority and in such  

manner as is provided for by or under any law made by the State Legislature.  

Article 243(d) and Article 243-G which have bearing on the issue raised in  

theses appeals read as under:

     “243(d). In this Part, unless the context otherwise requires,-  

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(d)   “Panchayat”  means an institution (by whatever name  called)  of  self-government  constituted  under  article  243B,  for the rural areas;

243G.  Powers, authority and responsibilities of Panchayat -  Subject to the provisions of this Constitution, the Legislature  of  a  State  may, by law, endow the Panchayats  with such  powers and authority and may be necessary to enable them  to function as institutions of self-government and such law  may contain  provisions  for  the  devolution  of  powers  and  responsibilities  upon  Panchayats,  at  the  appropriate  level,  subject to such conditions as may be specified therein, with  respect to  

(a) the preparation of plans for economic development and  social justice;  

(b) the  implementation  of  schemes  for  economic  development and social justice as may be entrusted to them  including  those  in  relation  to  the  matters  listed  in  the  Eleventh Schedule.”

14. In the light of the Constitution (Seventy-third Amendment) Act, the State  

legislature enacted the Act, as is evident from its preamble, which reads thus:

“Whereas it is expedient to replace the present enactment by a  comprehensive enactment to establish a two-tier Panchayat Raj  System in the State with elected bodies at village and district  levels, in keeping with the Constitution Amendment relating to  Panchayats  for  greater   participation of  the people and more  effective implementation of rural development programmes.”

15. Chapter  I  of  the  Act  contains  definitions  of  various  terms  including  

“Panchayat”  which means  a  Village  Panchayat  established  under  Section  3.  

Chapter  II  contains  provisions  relating  to  Gram  Sabha  and  constitution  of  

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Panchayats including election to the Panchayats in which every person enrolled  

in  the  electoral  roll  of  the  Legislative  Assembly  of  the  State  is  entitled  to  

participate.   Chapter  III  contains provisions relating to functions,  duties and  

powers  of  Panchayats,  Sarpanch  and  Deputy  Sarpanch.   Since,  we  are  not  

concerned with the provisions relating to staff of Panchayats,  constitution of  

Taluka Panchayats and related provisions, constitution of Zilla Panchayats and  

related provisions, we do not consider it necessary to make a detailed reference  

to  the  provisions  contained  in  Chapters  IV  to  IX.   Chapter  X  contains  

provisions relating to inspection and supervision etc. of  Panchayats.  Chapter  

XI  relates  to  financial  control  and  audit.   Chapter  XII  incorporates  

miscellaneous provisions.   For the sake of reference, Sections 2(14), 3(1), (2),  

47-A, 60, 62, 64, 66, 70, 84, 178, 201, 201-A and relevant portions of Schedule-

I are reproduced below:

“CHAPTER I Preliminary

2.  Definitions.—  In  this  Act,  unless  the  context  otherwise  requires,-

(14) “Panchayat” means a Village Panchayat established  under section 3;

CHAPTER II Gram Sabha — Constitution of Panchayats

3.  Declaration  of  Panchayat  areas  and  establishment  of  Panchayats.—  (1)  After  making  such  inquiry  as  may  be  

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necessary, the Government may, by notification, declare a local  area, comprising of a village or a group of villages or any part  or parts thereof, or a combination of any two or more of them to  be  a  Panchayat  area  for  the  purposes  of  this  Act  and  also  specify its headquarters.

(2) For every Panchayat area, there shall be a Panchayat as from  such date as the Government may, by notification, appoint.

47-A. Executive powers of the Sarpanch.— Notwithstanding  anything contained in this Act and the rules framed thereunder,  the  Sarpanch  shall  exercise  the  powers  on  the  following  matters, namely:—

(i) to implement the programme of welfare schemes and other  developmental works;

(ii)  to  execute  and  implement  the  resolution  passed  by  the  Panchayat on the matters not specified in section 47.

(Inserted by the Amendment Act 1 of 1997)

CHAPTER III Functions, Duties and Powers of Panchayats, Sarpanch and  

Deputy Sarpanch

60.  Functions  of  the  Panchayat.—  (1)  Subject  to  such  conditions as may be specified by the Government from time to  time,  the  Panchayat  shall  perform the  functions  specified  in  Schedule-I.

(2) The Panchayat  may also make provision for carrying out  within the Panchayat area any other work or measure which is  likely  to  promote  the  health,  safety,  education,  comfort,  convenience or social or economic well-being of the inhabitants  of the Panchayat area.

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62. General powers of the Panchayat.— Panchayat shall have  powers to do all acts necessary for or incidental to the carrying  out of the functions entrusted, assigned or delegated to it and in  particular  and  without  prejudice  to  the  foregoing  powers  to  exercise all powers specified under this Act.

64.  Powers  and  duties  of  the  Sarpanch  and  Deputy  Sarpanch.—  (1)  The  Sarpanch  of  the  Panchayat  shall,  in  addition to the power exercisable under any other provision of  this Act or rules made thereunder,—

(j) stop any unauthorized construction erected in the Panchayat  area notwithstanding anything contained in sub-section (3) of  section 66 of this Act and place the matter immediately before  the  ensuing  meeting  of  the  Panchayat  for  taking  suitable  decision;  

(k) remove encroachment and obstruction upon public property,  street, drains and open sites not being private property;

(l) ensure due compliance of the provisions of the Act; and

66. Regulation of the erection of buildings.— (1) Subject to  such  rules  as  may  be  prescribed,  no  person  shall  erect  any  building or alter or add to any existing building or reconstruct  any building without the written permission of the Panchayat.  The permission may be granted on payment of such fees as may  be prescribed.  

(2) If a Panchayat does not, within thirty days from the date of  receipt  of  application,  determine  whether  such  permission  should  be  given or  not  and  communicate  its  decision  to  the  applicant,  the applicant may file an appeal within thirty days  from  the  date  of  expiry  of  aforesaid  period,  to  the  Deputy  Director who shall dispose of the same within thirty days from  the date of filings of such appeal. If the Deputy Director fails to  dispose of the appeal within thirty days, such permission shall  be deemed to have been given and the applicant may proceed to  execute  the  work,  but  not  so  as  to  contravene  any  of  the  

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provisions of this Act or any rules or bye-laws made under this  Act.

(3) Whenever any building is erected, added to or reconstructed  without such permission or in any manner contrary to the rules  prescribed under sub-section (1) or any conditions imposed by  the permission granted, the Panchayat may,—  

(a)  direct  that  the  building,  alteration  or  addition  be  stopped; or

(b) by written notice require within a reasonable period to  be specified therein, such building alteration or addition  to be altered or demolished.

70. Control of hotels etc.— No place within the jurisdiction of  a Panchayat shall be used as a hotel, restaurant, eating house,  coffee  house,  sweetmeat  shop,  bakery,  boarding  house  or  lodging  house  (other  than  a  hostel  recognized  by  the  Government),  or  a  dharmashala  or  for  manufacturing  ice  or  aerated water except under a licence granted or renewed by the  Panchayat  and except  in  accordance with condition specified  therein.

84. Powers and duties in regard to sources of water supply. — The Secretary or any officer authorized by the Panchayat in  this behalf may at any time by written notice require that the  owner or any person who has control over any well,  stream,  channel, tank, or other source of water supply shall, whether it  is private property or not,—

(a) if the water is used for drinking,-

(i) keep and maintain any such source of water supply  other than a stream, in good repair; or

(ii) within a reasonable time to be specified in the notice,  cleanse  any  such  source  of  water  supply  from silt,  refuse and decaying vegetation; or

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(iii) in such manner as the Panchayat may direct, protect  any such source of water  supply from pollution by  surface drainage; or  

(iv) desist  from using and from permitting others to use  for  drinking  purposes  any  such  sources  of  water  supply, which not being a stream in its natural flow, is  in the opinion of the Panchayat unfit for drinking; or  

(v) if  notwithstanding any such notice under sub-clause  (iv), such use continues and cannot, in the opinion of  the  Panchayat,  be  otherwise  prevented,  close  either  temporarily or  permanently, or  fill  up or  enclose or  fence  in  such  manner  as  the  Panchayat  considers  sufficient to prevent such use,  such source of water  supply; or

(vi) drain off or otherwise remove from any such source of  water  supply,  or  from  any  land  or  premises  or  receptacle  or  reservoir  attached  or  adjacent  thereto,  any stagnant water which the Panchayat considers as  injurious to health or offensive to the neighbourhood;

178. Power of suspending execution of unlawful  orders or resolution.— (1) If in the opinion of the Director,  the execution of any order or resolution of a Panchayat or  Zilla Panchayat or any order of any authority or officer of  the Panchayat or the Zilla Panchayat or the doing of  anything which is about to be done, or is being done, by or  on behalf of a Panchayat or a Zilla Panchayat is unjust,  unlawful or improper or is causing or is likely to cause  injury or annoyance to the public or to lead to a breach of  peace, he may by order suspend the execution or prohibit the  doing thereof.

(2) When the Director makes an order under sub-section (1),  he shall forthwith forward to the Government and the  Panchayat or Zilla Panchayat affected thereby a copy of the  order with a statement of the reasons for making it, and the  Government may confirm or rescind the order or direct that  

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it shall continue to be in force with or without modification  permanently or for such period as it thinks fit:

Provided that no order of the Director passed under sub- section (1) shall be confirmed, revised or modified by the  Government without giving the Panchayat or the Zilla  Panchayat concerned a reasonable opportunity of showing  cause against the proposed order.

201.  Appeals.— (1) Any person aggrieved by original order  of the Panchayat under section 76, 77, 84, 104 and 105 of  the  Act,  may,  within  such  period  as  may  be  prescribed,  appeal to the Director.

(2)  The  Appellate  Authority  may,  after  giving  an  opportunity  to  the  appellant  to  be  heard  and  after  such  enquiry as it deems fit, decide the appeal and its decision  shall be final.

201-A. Appeal on miscellaneous matter dealt by the  Panchayats. —  (1) Where no appeal has been specifically  provided in this Act on any miscellaneous matter which is  dealt  with  by  the  Panchayat  or  the  Village  Panchayat  Secretary or the Sarpanch, an appeal shall lie to the Block  Development Officer within a period of thirty days from the  date of refusal of any request by the said authority and his  decision  on such  appeal,  subject  to  the  provision of  sub- section (2), shall be final.

Explanation:— For the purpose  of  this  section,  "refusal"  means rejecting of any request in writing or non conveying  of any reply to the application within a period of fifteen days  from the receipt of application in his office.

(2) A revision shall lie to the Deputy Director against any  order passed by the Block Development Officer under sub- section (1) within a period of thirty days from the date of the order. ”

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SCHEDULE – I FUNCTIONS AND RESPONSIBILITIES OF VILLAGE  

PANCHAYAT

I. General functions:

(1)  Preparation  of  annual  plans  for  the  development  of  the  Panchayat area.

(7) Demolition of unauthorised construction.

VIII. Drinking water:

(1)  Construction,  repairs  and  maintenance  of  drinking  water  well, tanks and ponds.

(2) Prevention and control of water pollution.

(3) Maintenance of rural water supply schemes.”

16. The Preamble, Part IV and Part IX of the Constitution must guide our  

understanding of the Panchayati Raj institutions and the role they play in the  

lives of the people in rural parts of the country. The conceptualization of the  

Village Panchayat as a unit of self government having the responsibility to  

promote social justice and economic development and as a representative of the  

people within its jurisdiction must be borne in mind while interpreting the laws  

enacted by the State which seek to define the ambit and scope of the powers and  

the functions of Panchayats at various levels.

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17. An analysis of Article 40 and Articles 243 to 243-O shows that the  

framers of the Constitution had envisaged Village Panchayat to be the  

foundation of the country’s political democracy - a decentralized form of  

Government where each village was to be responsible for its own affairs. By  

enacting the Constitution (Seventy-third Amendment) Act, Parliament has  

attempted to remedy the defects and remove the deficiencies of the Panchayati  

Raj system evolved after independence, which failed to live up to the  

expectation of the people in rural India.  The provisions contained in Part IX  

provide firm basis for self-governance by the people at the grass root through  

the institution of Panchayats at different levels.  For achieving the objectives  

enshrined in Part IX of the Constitution, the State Legislatures have enacted  

laws and made provision for devolution of powers upon and assigned various  

functions listed in the Eleventh Schedule to the Panchayats.  The primary focus  

of the subjects enumerated in the Eleventh Schedule is on social and economic  

development of the rural parts of the country by conferring upon the Panchayat  

the status of a constitutional body. Parliament has ensured that the Panchayats  

would no longer perform the role of simply executing the programs and policies  

evolved by the political executive of the State.  By virtue of the provisions  

contained in Part IX, the Panchayats have been empowered to formulate and  

implement their own programs of economic development and social justice in  

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tune with their status as the third tier of government which is mandated to  

represent the interests of the people living within its jurisdiction.  The system of  

Panchayats envisaged in this Part aims at establishing strong and accountable  

systems of governance that will in turn ensure more equitable distribution of  

resources in a manner beneficial to all.  

18. In the light of the above, it is to be seen whether the appellant has the  

locus to challenge the orders passed by respondent No.1 in the appeals filed by  

the company.  A conjoint reading of the provisions contained in Chapter III of  

the Act shows that a Panchayat is generally required to perform the functions  

specified in Schedule I and also make provision for carrying out any other work  

or measures likely to promote the health, safety, education, comfort or  

convenience or social or economic well-being of the inhabitants of the  

Panchayat area.  It also has the power to do all acts necessary for or incidental  

to carrying out the functions entrusted, assigned or delegated to it.  The  

Sarpanch is not only entrusted with the duty to implement the programme of  

welfare schemes and other development works, but also stop any unauthorised  

construction erected in the Panchayat area.  Section 66 which regulates erection  

of buildings within Panchayat area empowers it and/or the Sarpanch to take  

action against erection of building without obtaining permission from the  

competent authority or any violation of the conditions imposed at the time of  

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grant of such permission.  The Panchayat is also empowered to issue direction  

for up-keep and maintenance of sources of water supply which are in private  

hands.  

19. Section 178 empowers the Director to suspend the execution of any order  

or resolution passed by a Panchayat or prohibit the doing of anything by or on  

behalf of a Panchayat if he is satisfied that the execution of any such order or  

resolution or doing of anything by or on behalf of the Panchayat is unjust,  

unlawful or is improper or is causing or is likely to cause injury or annoyance to  

the public or lead to a breach of peace.  Section 178(2) casts a duty on the  

Director to forward to the Government and the Panchayat affected by his order  

a copy of the statement of reasons for making the order.  The Government has  

the power to confirm or rescind the order or direct that it shall continue to  

remain in force with or without modification permanently or for a specified  

period.  Proviso to this Section imposes an obligation on the Government to  

give reasonable opportunity of showing cause to the concerned Panchayat  

against the proposed confirmation, revision or modification of the order of the  

Director.  Section 201 provides for appeal against an order of the  

Panchayat made under Sections 76, 77, 84, 104 and 105.  

Where no appeal has been  provided under the Act on any  

miscellaneous matter dealt with by the Panchayat or the  

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Village Panchayat Secretary or the Sarpanch, an appeal lies to  

the Block Development Officer under Section 201-A(1).  In  

terms of Section 201-A(2), Deputy Director is empowered to  

exercise revisional power qua the order which may be passed  

by the Block Development Officer under sub-section (1).

20. In this case, the appellant had entertained the complaint made by local  

residents, revoked occupancy certificate and also cancelled the permission granted to  

the company for raising construction. The resolution cancelling the permission was  

recalled apparently because the rules of natural justice had not been followed.  

Thereafter, the Sarpanch issued notice under Section 64 and directed the company to  

stop further construction. The company challenged the notice and succeeded in  

persuading respondent No.1 to pass an ex-parte interim order. The application made  

by the company for permission to use the property for running a Guest House was  

rejected by the appellant because legality of the construction made by the company  

was under scrutiny. In both the cases, respondent No.1 set aside the resolutions passed  

by the appellant as also the notice issued by the Sarpanch. The orders passed by  

respondent No.1 do not refer to the particular provision under which the concerned  

officer was exercising the appellate power. Surely, he could not have exercised  

the power vested in the appellate authority under Section 201 because the source of  

power of the resolutions passed by the appellant and the notice issued by the Sarpanch  

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cannot be traced in Sections 76, 77, 84, 104 and 105 of the Act which  

relate to removal of any building or part thereof or any tree or  

branch of a tree if it is in a ruinous state or is likely to fall or is  

otherwise dangerous to any person occupying such building or  

part thereof or matters relating to sanitation, conservancy and  

drainage or exercise of power by the Secretary in relation to  

any well, stream, channel, tank or other source of water supply  

or which postulates right to carry drain through land or into  

drain belonging to other persons.  Similarly, respondent No.1  

cannot be said to have exercised power under Section 201-A  

because under that provision, only the Block Development  

Officer is competent to entertain an appeal in a miscellaneous  

matter which is dealt with by the Panchayat or the Village  

Panchayat Secretary or the Sarpanch and against which no  

appeal has been specifically provided under the Act.  

Therefore, it is reasonable to infer that respondent No.1 had  

exercised power under Section 178(1).  However, instead of  

suspending the execution of the resolutions passed by the  

appellant or the notice issued by the Sarpanch and sending the  

matter to the State Government for confirmation, the  

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concerned officer suo-moto annulled the resolutions and the  

notice by assuming that he had the power to do so.            

21. It is thus evident that while the appellant and the Sarpanch had exercised  

their respective powers in public interest, respondent No.1 nullified that  

exercise because he felt that the resolution/action was contrary to law and was  

unjustified.  While exercising the power under the Act, the Panchayat was not  

acting as a subordinate to respondent No.1 but as a body representing the will of  

the people and also a body corporate in terms of Section 8 of the Act.  

Therefore, it had the locus to challenge the orders passed by respondent No.1  

and the High Court was clearly in error in holding that the writ petition was not  

maintainable.

22.  In Karunagappally Grama Panchayat v. State of Kerala, 1996 (1) KLT  

419, the Division Bench of the Kerala High Court considered an identical  

question.  In that case, the Writ Petition filed by the appellant –  Gram  

Panchayat questioning the order of the State Government whereby a direction  

was issued to permit construction of a multi-storied building was dismissed by  

the learned Single Judge by observing that the Panchayat cannot be treated as an  

aggrieved person.  While reversing the order of the learned Single Judge, the  

Division Bench made the following observations:

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“If a Panchayat has a legal right to sue, then its corollary is that it  can mention an action under Art. 226 of the Constitution. The  legal  character  of  a  Panchayat  is  very much analogous  to  that  of  a  Municipality  or  such other  local  body.  In  the  case  of  a  municipality,  the  position  seems to  be  settled  that  it  can  sue  or  be  sued.  The  right  of  a  company  registered under the Companies Act for suing another and also  for moving under Art 226 has been recognised by the Apex Court  in  D. C. & G. M. Co. Ltd.  v.  Union of India  (AIR 1983 SCC  937). It may be that an officer of a Company or  local body is  incompetent to challenge  an order  passed by  any  authority  superior to  the  local body through a  suit  or writ  petition.  He  has  to  abide  by  the  order.  But  that  principle  cannot  be  imported  to  the  situation  where  the  Juristic  person  itself  becomes the aggrieved party.

In this context, we refer to S. 5 of the Act which says "every  Panchayat  shall  be  a  body  corporate  by  the  name of  the  Panchayat…".   It  shall  have  perpetual  succession  and  a  common  seal.  It  shall,  subject  to  any  restriction  or  qualification imposed by or under the Act or any other law  "be vested with the capacity of suing or being sued on its  corporate  name".  The Section  further  says  that  Panchayat  shall be vested with the capacity of acquiring, holding and  transferring  property,  movable  or  immovable  or  entering  into contracts, and of doing all things necessary, proper or  expedient for the purpose for which it is constituted.

Legal  concept  envisaged  in  S.  5  of  the  Act  makes  the  position clear that Panchayat is a body corporate. If so it can  sue or be sued. In that position Panchayat cannot be denuded  of the right to move under Art. 226 of the Constitution when  any of its legal right is infringed by the authorities including  the Government.”

23. In High Court of M.P. v. Mahesh Prakash and others (1995) 1 SCC 203,  

this Court considered several questions including the one whether the High  

Court has the locus to challenge the order passed on judicial side by filing a  

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petition under Article 136 of the Constitution.  While rejecting the decision of  

the High Court, this Court observed:       

“The order that the first respondent challenged in the writ  petition filed by him before the High Court was an order  passed  by  the  High  Court  on  its  administrative  side.  By  reason of Article 226 of the Constitution it was permissible  for the appellant to move the High Court on its judicial side  to  consider  the  validity  of  the  order  passed  by  the  High  Court  on  the  administrative  side  and  issue  a  writ  in  that  behalf. In the writ petition the first respondent was obliged  to implead the High Court for it was the order of the High  Court  that  was  under  challenge.  It  was,  therefore,  permissible for the High Court to prefer a petition for special  leave to appeal to this Court against the order on the writ  petition passed on its judicial side. The High Court is not  here to support the judicial order its Division Bench passed  but  to  support  its  administrative  order  which its  Division  Bench set aside. We find, therefore, no merit in what may be  termed the preliminary objection to  the maintainability  of  the appeal.”

24. In State of Orissa v. Union of India 1995 Supp. (2) SCC 154, the Court  

considered  the  question  whether  the  State  Government  has  locus  standi to  

challenge  the  order  passed  by  the  Central  Government  in  exercise  of  its  

revisional power under the Mineral Concession Rules, 1960.  While answering  

the question in affirmative, this Court observed:   

“In this connection, it is necessary to note that in the first  place,  the  State  Government  is  not  merely  an  authority  subordinate  to  the  Central  Government  which  would,  

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27. In the result, the appeals are allowed, the impugned order is set aside and  

the writ petitions filed by appellant are restored to their original numbers.  The  

High  Court  shall  now  issue  notice  to  the  respondents  and  decide  the  writ  

petitions on merits.

28. It will be open to the appellant to apply for interim relief.  If any such  

application is filed, then the High Court shall decide the same on its own merits.  

…...……..….………………….…J.  [G.S. Singhvi]

…………..….………………….…J.           [Sudhansu Jyoti Mukhopadhaya] New Delhi, July 02, 2012.

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