APHC010246922019 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3329] WEDNESDAY,THE THIRD DAY OF SEPTEMBER TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE VENKATESWARLU NIMMAGADDA WRIT PETITION NO: 11101/2019 Between: 1. DEEPANA NEELADRI REDDY,, S/0 CHINNAIAH,AGED 81 YEARS, EX SARPANCH, R/O BIRLANGI, ICHAPURAM MANDAL, SRIKAKULAM DISTRICT. ...PETITIONER AND 1. EXTENSION OFFICER PANCHAYATRAJ AND RURAL DEVELOPMENT, ICHAPURAM, SRIKAKULAM DISTRICT. 2. MANDAL PRAJA PARISHAD DEVELOPMENT OFFICER, ICHAPURAM, SRIKAKULAM DISTRICT. 3. DIVISIONAL PANCHAYAT OFFICER, ,TEKKALI, SRIKAKULAM DISTRICT. 4. DISTRICT PANCHAYAT OFFICER, SRIKAKULAM. 5. DISTRICT COLLECTOR, SRIKAKULAM. 6. BAKI LAXMINARAYANA, S/O DUDISTY REDDY,OCC EX. MPTC/ AGRICULTURE,AGED ABOUT 42 YEARS, R/O D.NO.1-307, BIRLANGI VILLAGE, ICHAPURAM MANDAL, SRIKAKULAM DISTRICT. R6 IS IMPLEADED AS PER THE COURT'S ORDER DT.23.07.2025 IN I.A.NO.02 OF 2019 ...RESPONDENT(S): Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be 2 pleased toto issue a Writ order or direction more particularly one in the nature a Writ of Mandamus declaring the action of respondent No5 in issuing proceedings Dt. 15-7-2019 in S.No. 09/2017 P5 as illegal, arbitrary and contrary to principles of natural Justice and violative of Panchayatraj Act and also rules there under and to pass IA NO: 1 OF 2019 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to stay all further proceedings in pursuance of proceedings issued by R5 Dt. 15- 7-2019 in S.No. 09/2017 P5 pending disposal of above writ petition and to pass IA NO: 2 OF 2019 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased To implead the petitioner as respondent No. 6/proposed respondent in W.P No. 11101 of 2019 of this Hon'ble Court and pass Counsel for the Petitioner: 1. Sravanthi Kunuku Counsel for the Respondent(S): 1. VISWANATH N 2. 3. K K DURGA PRASAD 4. GP FOR PANCHAYAT RAJ RURAL DEV (AP) The Court made the following: 3 THE HON’BLE SRI JUSTICE VENKATESWARLU NIMMAGADDA WRIT PETITION NO: 11101/2019 ORDER: This writ petition is filed under Article 226 of the Constitution of the India seeking the following reliefs:- “to issue a writ, order or direction more particularly one in the nature of Writ of Mandamus declaring the action of respondent No.5 in issuing proceedings dated 15.07.2019 in S.No.09/2017 P5 as illegal, arbitrary and contrary to principles of natural Justice and violative of Panchayat Raj Act and also Rules there under and pass such other order.” 2. Heard the learned counsel for the petitioner, learned Standing Counsel for respondent Nos.1 and 2 and the learned Government Pleader for respondent Nos.3 to 5 and perused the material available on record. 3. The case of the petitioner is that the petitioner is an Ex.Sarpanch of Birlangi Gram Panchayat of Ichapuram Mandal, Srikakulam District, Andhra Pradesh. He worked as Sarpanch for a period of five years from 2013 to 02.08.2018. 4. Learned counsel for the petitioner submits that the due to political rivals, one B.Lakshminarayana made a petition/complaint to respondent No.4 against the petitioner alleging misappropriation of Gram Panchayat funds. Then, respondent No.3 conducted an enquiry and recorded the statements of the petitioner, all the ward 4 members of Gram Panchayat and Panchayat Secretaries and found that there is neither any statement nor admission from any one regarding misappropriation of public funds against the petitioner. Now, the respondents issued the impugned proceedings stating that the petitioner misappropriated the Gram Panchayat funds to a tune of Rs.14,62,840/- and authorized the Mandal Parishd Officer, Ichapuram, to recover the said amount from the petitioner by initiating proceedings under A.P. Revenue Recovery Act, 1864. It is submitted by the learned counsel for the petitioner that the petitioner discharged his duties without there being any misconduct, commission or omission and negligent in performing the duties and as such, the allegations made against the petitioner are misconceived. He further contended that the respondent No.5 without following the procedure provided under Section 265 of the A.P. Panchayat Raj Act issued the impugned proceedings. 5. Learned counsel further submits that a show-cause notice was issued to the petitioner. For which, the petitioner also submitted his explanation. It is further contended that the report of the 3rd respondent was not furnished either along with the show-cause notice or with this impugned proceedings. It is contended that the order impugned in this Writ Petition is issued in violation of principles of natural justice and prayed this Court to set aside the same in the interest of justice. 5 6. Counter-affidavit of respondent No.4 was filed, wherein it is contended that during the tenure of the petitioner as Sarpanch, Birlangi Gram Panchayat, Ichapuram Mandal of Srikakulam District, he has misappropriated an amount of Rs.14,62,840/- under various heads such as General Funds-Rs.1,56,000/-, SFC- Rs.42,000/-, 13th Finance Commission – Rs.8,34,021/- and 14th Finance Commission – Rs.4,30,819/-. A show cause notice was issued to the petitioner stating that he incurred expenditure in the capacity of Sarpanch of Birlangi Gram Panchayat against the orders issued in G.O.Ms.NO.432 dated 30.10.2013. The petitioner has misappropriated Gram panchayat funds to the tune of Rs.14,62,840/- . The post of the Sarpanch was ended by 11.08.2018. Accordingly, a show-cause notice was issued in Rc.No.09/2017 P5 17.01.2019, why the misappropriated amount should not be recovered from him under the provisions of A.P. Revenue Recovery Act, 1864. The amount of Rs.14,62,840/- was incurred by the petitioner for unauthorized works and the petitioner committed irregularities, which are as follows: “i. Gram Panchayat approvals was not obtained for the works done. ii. Electrical goods purchased under 13th Finance Commission Funds against to the guidelines, 6 iii. Works have been executed without preparing Action Plan, and the approval of the concerned officers was not obtained, iv. Payments were made by cash instead of by way of cheques. v. Entries in the M.Book not made. vi. Vouchers/bills not produced for verification before the Inspecting Officer, i.e., 3rd respondent. vii. Added to this the Ex-Sarpach has taken an amount of Rs.42000+33193 = Rs.75193 from the Gram Panchayat Funds under Sarpanch Advance category and kept the money with him for a long period which is highly objectionable. ix. Stock Register not maintained and not shown to the Inspecting Officer.” 7. Having heard the submissions of the respective counsel and upon perusal of the material available on record, it is appropriate to extract Section 265 of the Andhra Pradesh Panchayat Raj Act, 1994, for proper adjudication of the matter, which is as follows: “265. Liability of Sarpanch, President, Chairman etc., for loss, waste or misapplication of property:- (1) If, after giving the Sarpanch, Upa-Sarpanch, President, Vice- President, “Chairperson”, “Vice-Chairperson” or the Executive Authority, the Mandal Parishad Development Officer, the Chief Executive Officer an Opportunity of showing cause to the contrary, the Commissioner is satisfied that the loss, waste or misapplications of any money or other property owned by or vested in the 7 Gram Panchayat, Mandal Parishad, or as the case may be, the Zilla Parishad is a direct consequence of misconduct or gross neglect, on the part of such person, the Commissioner may, by order in writing, direct such person to pay to the Gram Panchayat, Mandal Parishad or as the case may be, the Zilla Parishad before the date fixed by him, the amount required to reimburse it for such loss, waste or misapplication, unless such person proves that he had acted in good faith. (2) If the amount is not so paid, the Commissioner shall cause it to be recovered as arrears of land revenue and credited to the fund of the Gram Panchayat, Mandal Parishad or, as the case may be, Zilla Parishad. (3) An appeal shall lie within thirty days from any decision of the Commissioner under this section to the Government whose decision thereon shall be final.” 8. Upon perusal of the above provision of law, it is clear that Section 265(1) of the Andhra Pradesh Panchayat Raj Act, 1994, provides that after giving the petitioner an opportunity of showing cause to the contrary, the Commissioner is satisfied that the loss, waste, misapplications of any money or other property owned by or vested in the Gram Panchayat, the Commissioner may, by order in writing, direct such person to pay to the Gram Panchayat before the date fixed by him, the amount required to reimburse for such loss, waste or misapplication, unless such person proves that he had acted in good faith. 8 9. 8 9. Section 265(2) of the Andhra Pradesh Panchayat Raj Act, 1994, provides that if the amount is not so paid, the Commissioner shall cause it to be recovered as arrears of land revenue and credited to the fund of the Gram Panchayat. 10. On plain reading of Section 265(1) of the Act, it is clear that unless and until Respondent No.5 arrives at a conclusion that loss, waste or misapplication of Gram Panchayat funds is a direct consequence of misconduct or gross neglect of the Sarpanch, there cannot be any order of recovery of the amount under Section 265(1) of the Act. Further, if it is shown that such loss or waste or misapplication was occasioned in spite of the petitioner acting in good faith, Section 265(1) of the Act has no application. 11. Section 265(2) of the Act enables the recovery of amount as a land revenue which only means by legally sanctioned methods. Therefore, unless and until conditions precedent for exercise of power under Section 265(1) of the Act exist, routine order without recording any finding cannot be sustained. 12. Learned Government Pleader submits that respondent No.5 issued the impugned proceedings in exercise of the power delegated to him by the Commissioner of Panchayat Raj. 13. It is settled law that Section 265(1) of the Act requires a specific finding that any loss to Gram Panchayat is a direct consequence of misconduct or gross negligence and that the 9 Sarpanch has not acted in good faith. All these were not considered by Respondent No.5 in the present case. As the very exercise of power is not in accordance with Section 265(1) of the Act, it is to be held that the impugned order suffers from malice in law. 14. It is well settled principle of administrative law that if an authority vested with power fails to appreciate the facts properly or fails to apply the law properly, such order would be vitiated by illegality. 15. The respondents contended that the petitioner has an alternative remedy of appeal under Section 265(3) of the Act. In the opinion of this Court, this contention cannot be accepted due to the reason that the impugned order itself is issued against to the principles of natural justice. 16. This Court is not expressing its opinion with regard to the allegations made against the petitioner. It is open to the respondents to initiate appropriate proceedings in accordance with law, if so advised. 17. Admittedly, the Order impugned in this Writ Petition is passed without following the procedure provided under Section 265 of the Andhra Pradesh Panchayat Raj Act, 1994, and accordingly, it is liable to be set aside. 18. Accordingly, this Writ Petition is allowed with the following direction: 10 The impugned Order in S.No.09/2017 P5, dated 15.07.2019, issued by respondent No.5, is hereby set aside. 19. There shall be no order as to costs. As a sequel miscellaneous application, pending, if any, shall also stand closed. ________________________________ VENKATESWARLU NIMMAGADDA, J 0033..0099..22002255 TTPPSS 11 248 HON’BLE SRI JUSTICE VENKATESWARLU NIMMAGADDA WRIT PETITION NO:11101 of 2019 0033..0099..22002255 TTPPSS