JUDGMENT :- (Per Justice G. Bhavani Prasad) 1. G.O.Ms.No.274 Panchayat Raj & Rural Development (RWS.III) Department, dated 08-09-2009 (for short “G.O.Ms. No.274”) by which G.O.Ms.No.350 Panchayat Raj & Rural Development (RWS-III) Department, dated 31-08-2006 (for short “G.O.Ms.No.350) was amended substituting the original paragraph No.5 with a new paragraph providing for the names of the local persons, namely, a member from among the elected Ward Members of the Gram Panchayat, a Woman Member from among the Self Help Group and a Person of the village, who is having interest in development activities, to be submitted by the Mandal Parishad Development Officer to the District Collector, who will in turn take the approval of the District In-charge Minister, for reconstitution of the Village Level Implementation-cum-Monitoring Committee at Gram Panchayat Level in respect of various activities under INDIRAMMA Programme, is under challenge in this batch of writ petitions. 2. The petitioners are mostly Sarpanches of various Gram Panchayats (except the 3rd petitioner in W.P. No.20701 of 2009, who is a Mandal Parishad Territorial Constituency Member) and contend that various Government Orders were issued by State Government from time to time to enable the Gram Panchayats to function as units of self- government after the Seventy-third Amendment to the Constitution of India and various development activities and programmes are taken up at the village level including the Integrated Novel Development In Rural Areas and Model Municipal Areas popularly known as INDIRAMMA Programme. G.O.Ms.No.350 was issued keeping in view the provisions of the Seventy-third Constitution Amendment for reconstituting the Implementation-cum-Monitoring Committee for INDIRAMMA Programme with the Sarpanch as Chairperson to ensure that only eligible persons will get the benefit of the Programme and to find out and take action regarding ineligible beneficiaries. Phase I and Phase II Projects under INDIRAMMA Programme were undertaken for the benefit of the persons selected by the Committee and most of the Sarpanches of Gram Panchayats selected under Phase I and Phase II belong to ruling party, while those selected under Phase III are not so. The Government issued G.O.Ms.No.505 Panchayat Raj & Rural Development (RWS.III) Department, dated 12-11-2007 in respect of preparatory works for implementation of Phase III of the Programme specifying that the constitution of the Village Level Implementation Committee and Monitoring Committee shall be as per the provisions of G.O.Ms. No.350. The Government issued G.O.Ms.No.505 Panchayat Raj & Rural Development (RWS.III) Department, dated 12-11-2007 in respect of preparatory works for implementation of Phase III of the Programme specifying that the constitution of the Village Level Implementation Committee and Monitoring Committee shall be as per the provisions of G.O.Ms. No.350. The selection of beneficiaries should commence from 01-01-2008 and by G.O.Ms.No.238 Panchayat Raj & Rural Development (RWS.III) Department, dated 01-08-2009, the existing composition of the Committee was changed still retaining the Sarpanch as the Chairman/Chairperson, but making a Member from among the elected Ward Members of Gram Panchayat, a Woman Member from among Self Help Group, a Person of the village, who is having interest in development activities and the Panchayat Secretary, as Members, the last being Member Convener, in the place of a Member of Rajeev Yuva Shakti Group, a Member of the Women Self Help Group, three local persons having interest in development activities and the Village Secretary, the last being Member Convener. 3. By virtue of the impugned G.O., the provision for submission of the names of the local persons by the Panchayat Secretary/Village Secretary in consultation with the Sarpanch, was deleted and the intent and purpose of G.O.Ms.No.350 was defeated. The Sarpanch as the Chairman of the Committee was reduced to a figure head with the Committee being constituted in entirety, in effect and substance, by the Mandal Parishad Development Officer. The Directive Principle under Article 40 of the Constitution to endow the Gram Panchayats with such powers and authority as may be necessary to enable them to function as units of self-government, was defeated and the Seventy-third Amendment to the Constitution and the consequential G.O.Ms.No.571 Panchayat Raj & Rural Development (RD.III) Department, dated 26-12-2007 were also contravened by the impugned Government Orders. The discrimination in the implementation between Phases I and II on one hand and Phase III on the other, was mala fide, unjustified and malicious. The colourable exercise of power substituting paragraph 5 in G.O.Ms.No.350 operates retrospectively making the Committees constituted earlier void and in W.P. No.4252 of 2008 and batch, the High Court stayed constitution of any Committees contrary to G.O.Ms.No.350. The impugned Government Orders issued to get over the said interim stay, which was made absolute, are not legal and valid and have to be declared so. 4. The impugned Government Orders issued to get over the said interim stay, which was made absolute, are not legal and valid and have to be declared so. 4. The writ petitions were opposed by the respondents contending that G.O.Ms.No.360, dated 28-10-2005 was issued with the aim of developing model villages and towns with basic infrastructure facilities and welfare measures and the programmes were identified in G.O.Ms.No.442, dated 27-12-2005. The Government issued G.O.Ms.No.140, dated 01-05-2006 for constituting awareness-cum-monitoring committee at Gram Panchayat/Ward level. The composition and functions of the Committee were reviewed in view of the provisions of the Seventy-third Constitution Amendment and accordingly, G.O.Ms.No.350 was issued reconstituting the Committees with specified duties. However, there were instances where the Sarpanches did not show any interest leaving it to the Panchayat Secretary to send the names and after composition of the Committee was modified as per G.O.Ms.No.238, dated 01-08-2009, the impugned G.O.Ms.No.274, was issued to ensure a fair composition of the Committee, which will be more representative. The Sarpanch still remained the Chairman without any change in his position irrespective of his political affiliation and the amendments became necessary only due to some Sarpanches not showing any interest in sending the names of the proposed Committee Members and to ensure that the benefit reaches the common man at the grass root level. Therefore, the respondents desire the writ petitions to be dismissed. 5. It was also contended by the petitioners in W.P. No.20701 of 2009 that National Rural Employment Guarantee Act, 2005 was enacted to achieve the objective of the Directive Principle laid down in Article 41 of the Constitution of India, but G.O.Ms.No.231 Panchayat Raj & Rural Development (RD.II) Department, dated 24-07-2009 and the consequential Government Orders for taking up road works and G.O.Ms.No.350 and G.O.Ms.No.274 entrusting the works to the Committees, are in contravention of the National Rural Employment Guarantee Act, 2005 making the Gram Panchayats responsible for such works and limiting such road works only to 10% of the total works. 6. When the matters came up for hearing before one of us (Hon’ble Sri Justice P.S. Narayana), while noting that predominant role is assigned to Gram Sabhas and Gram Panchayats under the National Rural Employment Guarantee Act, 2005, it was felt that the following questions need be decided by a Division Bench in view of the general importance and far reaching consequences. 1. 1. Whether the Government Orders under challenge in these writ petitions, G.O.Ms.No.274 can be said to be in consonance with the spirit of the different provisions of the Constitution of India brought in by virtue of Seventy-third Constitution Amendment? 2. Whether G.O.Ms.No.274 aforesaid can be said to be not in conflict with the provisions of the National Rural Employment Guarantee Act, 2005 in general, Sections 13, 16, 17 and 18 in particular? Accordingly, the matters are before us and extensive arguments of Sri Taddi Nageswara Rao, Sri Dammalapati Srinivas and Sri Vinay Kamisetty, learned counsel for the respective petitioners; and the learned counsel for the respondents are heard. 17. The point that arises for consideration is, hence, whether the impugned G.O.Ms.No.274 is in consonance or conflict with the Seventy-third Constitution Amendment and/or the National Rural Employment Guarantee Act, 2005 and/or Sections 13, 16, 17 and 18 thereof ? Point: 8. Article 40 of the Constitution of India among the Directive Principles of State Policy obligated the State since inception 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. 9. However, it was observed that “the Panchayat Raj institutions in existence for a long time have not been able to acquire the status and dignity of viable and responsive people’s bodies due to a number of reasons” including “inadequate devolution of powers and lack of financial resources”. Consequently, it was felt forty years after the Indian Constitution came into force that there was “an imperative need to enshrine in the Constitution certain basic and essential features of Panchayat Raj institutions to impart certainty, continuity and strength to them”. Accordingly, the Constitution (Seventy-third Amendment) Act, 1992 was enacted and brought into force with effect from 01-06-1993 adding Part IX relating to Panchayats in the Constitution to provide for among other things, “devolution by the State Legislature of powers and responsibilities upon the Panchayats with reference to the preparation of plans for economic development and social justice and for implementation of development schemes” as specified in the statement of objects and reasons for the Constitution Amendment Bill. 10. 10. Article 243G of the Constitution accordingly provided that the Legislature of a State may, by law, endow the Panchayats with such powers and authority as may be necessary to enable them to function as institutions of self-government, which law may contain provisions for the devolution of powers and responsibilities upon Panchayats with reference to the preparation of plans for economic development and social justice and “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”. The Eleventh Schedule, among other things, covers poverty alleviation programmes under item 16 and roads, culverts, bridges, ferries, waterways and other means of communication under item 13. 11. Thus, since the coming into force of the Constitution (Seventy-third Amendment) Act, 1992, it is the constitutional mandate to empower and authorize the Panchayats with respect to not only the preparation of plans for economic development and social justice but also the implementation of schemes for economic development and social justice as may be necessary to enable them to function as institutions of self-government. The devolution of powers and responsibilities upon Panchayats shall have to be to achieve the said objective in respect of all matters entrusted to the Panchayats as listed in the Eleventh Schedule. 12. The Government of Andhra Pradesh, which took a policy decision for development of model villages and towns on the concept of saturation of identified basic infrastructure facilities and welfare measures by following focus area approach, identified the facilities and programmes in G.O.Ms.No.360 Panchayat Raj and Rural Development (RWS.III) Department, dated 28-10-2005 with Mandal as the unit and in respect of the selected villages, the detailed exercise for assessment of total requirement and gap in respect of identified activities was proposed to be taken up by involving the Panchayat Secretary, Members of the Rajeev Yuva Shakti Groups, Self Help Groups and officials of the concerned departments. A massive awareness campaign about the objective of the approach and the responsibility of Gram Panchayats and Committees was decided to be launched in selected villages before collection of data. State, District and Mandal Level Coordination Committees were constituted under the Government Orders. 13. A massive awareness campaign about the objective of the approach and the responsibility of Gram Panchayats and Committees was decided to be launched in selected villages before collection of data. State, District and Mandal Level Coordination Committees were constituted under the Government Orders. 13. In G.O.Ms.No.442 Panchay Raj & Rural Development (RWS.III) Department, dated 27-12-2005, this new concept has been named as INDIRAMMA—Integrated Novel Development In Rural Areas And Model Municipal Areas and this Government Order about the design of the programme specified the focus to be on the holistic development of the villages and towns for the betterment of living conditions of the people and it invariably referred to the responsibilities of the Gram Panchayats in this regard. The selected Gram Panchayats and the population to be covered were specified in the Annexure. 14. Constitution of Awareness-Cum-Monitoring Committees at Gram Panchayat/Ward Level was ordered in the first instance under G.O.Ms.No.140 Panchayat Raj and Rural Development (RWS.III) Department, dated 01-05-2006 in order to achieve the involvement of local people in a meaningful manner to help in taking up continuous awareness building and monitoring the implementation of various progarammes as planned. The constitution of the Committees with a Member of Rajeev Yuva Shakti Group, a Member of Women Self Help Group and three local Persons having interest in development activities to be nominated by the Mandal Parishad Development Officer/Municipal Commissioner concerned, was entrusted to the respective Mandal Parishad Development Officers or Municipal Commissioners. 15. These Committees were decided to be reconstituted under the Chairmanship of Sarpanch of the Gram Panchayat keeping in view the provisions of the Seventy-third Constitution Amendment under G.O.Ms.No.350, after a review in detail and after it was found necessary to revise the composition and also to assign some more functions to these Committees. It was specifically found necessary to entrust these Committees the responsibility to ensure that only eligible persons get the benefit under the programme and also to identify the ineligible beneficiaries. The Sarpanch being made Chairperson and the Village Secretary being made the Member Convener apart from the five members named earlier by G.O.Ms.No.140 to discharge the specified functions, were, thus, not only to be responsible for identification of the eligible and ineligible but also keeping in view the constitutional mandate of the Seventy-third Amendment. 16. The Sarpanch being made Chairperson and the Village Secretary being made the Member Convener apart from the five members named earlier by G.O.Ms.No.140 to discharge the specified functions, were, thus, not only to be responsible for identification of the eligible and ineligible but also keeping in view the constitutional mandate of the Seventy-third Amendment. 16. The further change in the composition of the Committee by G.O.Ms.No.238 Panchayat Raj and Rural Development (RWS.III) Department, dated 01-08-2009 was to restrict the number of local persons having interest in development activities to one and to make the Panchayat Secretary the Member Convener and to substitute a Member of the Rajeev Yuva Shakti Group with one among the elected Ward Members of the Gram Panchayat. 17. This was immediately followed by the impugned G.O.Ms.No.274 authorising the Mandal Parishad Development Officer to submit the names of the Committee Members to the District Collector, who will in turn take the approval of the District In-charge Minister, which responsibility was earlier with the Panchayat Secretary/Village Secretary, who shall do so in consultation with the Sarpanch through the Mandal Parishad Development Officer as per G.O.Ms.No.350. 18. The Village Level Functionaries are sought to be excluded with reference to the alleged instances where Sarpanches of many villages did not show any interest in naming the members or constituting the Committees. The allegation in the counter-affidavits is vague, indefinite and unspecific about the defaulting Sarpanches or their number or identification. In between G.O.Ms.No.350 and the impugned G.O.Ms.No.274, three years have elapsed and it is claimed that Phases I and II of INDIRAMMA Progaramme were gone through till the final stages with the Committees that existed under the unamended G.O.Ms.No.350, while it was for the III phase of INDIRAMMA Programme that the alleged default by many of the Sarpanches was sought to be projected as an excuse to exclude the grass root functionaries from naming the local members of the Committees. The reconstitution of the Committees born under G.O.Ms.No.140 specifically keeping in view the provisions of the Seventy-third Constitution Amendment and to invariably ensure confinement of the receipt of the benefit under the programme to only eligible persons as intended by G.O.Ms.No.350, was sought to be totally divorced from the involvement of the Sarpanch heading the Gram Panchayat and/or Village Secretary/Panchayat Secretary without any reference as to whether the provisions of the Seventy-third Constitution Amendment were still kept in view in effecting such a change. 19. The details or specifics of the instances where some of the Sarpanches (according to Para 13 of the counter-affidavits) or the Sarpanches of many villages (according to para 10 of the counter-affidavits) defaulted, were not forthcoming. While the respondents themselves, thus, do not appear to be sure whether the defaulting Sarpanches were only some or many, how the exclusion of the Panchayat Secretary/Village Secretary and the Sarpanch from the consultative process in naming the local persons for the Committee and the entrustment of the entire exercise to an official/Mandal Parishad Development Officer will ensure a fair composition of the Committee or make it more representative, is unintelligible and incomprehensible in the absence of any elaboration of such cryptic statement in the counter-affidavits. While the Members of Rajeev Yuva Shakti Group were excluded and the local Persons interested in development activities were restricted to one from three (while, of course, a Member of the Rajeev Yuva Shakti Group can come under the category of a local Person having interest in development activities) by G.O.Ms.No.238 on 01-08-2009 and the Sarpanch and Village Secretary/Panchayat Secretary were excluded from naming even the three local Persons (instead of five as earlier), how the change will result in making the Committee truly representative as claimed in the counter-affidavits, merely because the Sarpanch still continues to be the Chairman/Chairperson, defies any logical answer. Preservation of status of the Sarpanch as the figurehead of the Committee while nullifying his role in its formation, is alone not an acceptable excuse for the change in the procedure, which is considered ‘little’ by the counter-affidavits. Whether the factors that necessitated G.O.Ms.No.350 ceased to exist to justify reverting back to the Mandal Parishad Development Officer nominating the Members as under G.O.Ms.No.140 originally is nowhere stated in G.O.Ms.No.274. How the change will ensure that the benefit reaches the common man at the basic level is left inexplicable. 20. Whether the factors that necessitated G.O.Ms.No.350 ceased to exist to justify reverting back to the Mandal Parishad Development Officer nominating the Members as under G.O.Ms.No.140 originally is nowhere stated in G.O.Ms.No.274. How the change will ensure that the benefit reaches the common man at the basic level is left inexplicable. 20. In the absence of any data justifying the allegations of delay or disinterest on the part of any Sarpanches or a significant number of them as to adversely effect the object and purpose of the Committees or their constitution, displacement of the democratically elected Sarpanch by an administratively posted bureaucrat with no tangible rationale or explicable justification cannot be sustained, when such an attempt is plainly opposed to the object, purpose, letter and spirit of the Seventy-third Constitution Amendment enumerated above. 21. In fact, the State Government had issued G.O.Ms.No.505 Panchayat Raj & Rural Development (RWS.III) Department, dated 12-11-2007 for implementation of Phase III of INDIRAMMA Programme based on the experience gained during the implementation of earlier Phases I and II, in which the constitution of the Village Level Implementation Committee and Monitoring Committee was specifically directed to be in accordance with G.O.Ms.No.350 without any reference to any adverse experience of delay or disinterest of any Sarpanches in Phases I and II. The lists of beneficiaries selected by the Committees require consultation with the officials of the concerned departments and approval of Gram Sabha apart from further scrutiny at higher levels. There was no whisper of any need for change in the procedure prescribed by G.O.Ms.No.350. (The petitioners filed copies of resolutions of some Gram Sabhas approving unanimously the selection of the names of the Members of the Committees.) 22. The allegations of the writ petitioners about the political affiliation of themselves and others whose interest they purport to represent and the impugned Government Order being motivated with a mala fide intention to exclude them from the selection of the beneficiaries, are equally unsupported and unsubstantiated by any data on record. Consequently, any extraneous consideration in the issuance of the impugned Government Order making it vitiated by any malice in law or colourable exercise of power cannot be considered proved. But the basic flaw of offending the Seventy-third Constitution Amendment, of course, still remains. 23. Consequently, any extraneous consideration in the issuance of the impugned Government Order making it vitiated by any malice in law or colourable exercise of power cannot be considered proved. But the basic flaw of offending the Seventy-third Constitution Amendment, of course, still remains. 23. The State Government had, in fact, recognized that the Constitution Seventy-third Amendment provides for strengthening and revitalizing the Panchayat Raj institutions so that they can subserve the needs of the teeming millions that live in the rural areas. G.O.Ms.No.571 Panchayat Raj and Rural Development (RD.III) Department, dated 26-12-2007 referred to the enactment of the Andhra Pradesh Panchayat Raj Act, 1994 reflecting the spirit of the Constitutional mandate, identification of ten core subjects to be devolved to the Panchayat Raj institutions by demarcating official responsibility basing on the subsidiarity principle and the implementation of National Rural Employment Guarantee Scheme being devolved on the Panchayat Raj institutions. If that were the spirit of devolution of the State Government, the impugned Government Order No.274 is not in tune with such declared objective. 24. The petitioners also contended that the substitution of para 5 of G.O.Ms.No.350 by the impugned Government Order will, in effect and substance, make the Committees constituted hitherto prior to the impugned Government Order also void making the impugned Government Order operate retrospectively, which is illegal. 25. The petitioners referred to B. Narasimha Reddy v. State of Andhra Pradesh ( 2007 (6) ALT 681 (DB)), wherein one of us (G. Bhavani Prasad, J) speaking for the Bench pointed out that though the Legislature is competent to make a retrospective legislation even taking away vested rights, such retrospectivity cannot be in contravention of fundamental rights or in ignorance of the march of events and the constitutional rights accrued over a long period of time. In fact, the Apex Court reiterated the well settled law that an executive order of the Government cannot be made operative with retrospective effect in Govind Prasad v. R.G. Parsad and others ((1994) 1 Supreme Court Cases 437). In Ami Pigments Private Limited v. State of Gujarat (2007-TLGJ-0-258 = 2007 (TLS) 217575), the Supreme Court considered issuance of a circular with retrospective effect to be beyond the provisions of the Statute or the rules under consideration and any executive powers will not confer the competence to issue a circular with retrospective effect with adverse consequences to the affected. In Ami Pigments Private Limited v. State of Gujarat (2007-TLGJ-0-258 = 2007 (TLS) 217575), the Supreme Court considered issuance of a circular with retrospective effect to be beyond the provisions of the Statute or the rules under consideration and any executive powers will not confer the competence to issue a circular with retrospective effect with adverse consequences to the affected. It is not clear from the material on record whether the State Government interfered with the constitution or existence or functioning of such Committees existing before and by the time of G.O.Ms.No.274 in question. If the impugned Government Order is either intended or implemented in such a manner as to nullify the existing Committees, it will be, undoubtedly, hit by the vice of prohibited retro activity referred to in the precedents cited. 26. The works undertaken under INDIRAMMA Programme were also claimed by a set of petitioners to be within the scope and ambit of the National Rural Employment Guarantee Act, 2005. The Act, which is a necessary corollary to the Directive Principle of State Policy under Article 41 of the Constitution, makes the Panchayats the principal authorities for planning and implementation of the schemes made under the Act by Section 13(1) read with Section 2(g) and the responsibilities of the Gram Panchayats were statutorily specified in Section 16. Gram Sabhas, Ward Sabhas and Gram Panchayats are responsible for the respective functions assigned by the provision and social audit of such works by Gram Sabha with the assistance of Gram Panchayat is provided by Section 17. Schedule- II under Section 5 makes it the duty of the Gram Panchayat to register the households and their adult members and discharge all other responsibilities relating to guarantee rural employment under a scheme. The operational guidelines issued under the Act emphasize the “pivotal role” of the Gram Panchayats in the implementation of the Rural Employment Guarantee Schemes. Social audit and vigilance at gross root level are sought to be achieved by inspection, review and monitoring by local Committees or Gram Panchayats and thus, the provisions of the Act and the implementation of the schemes thereunder indicate in no unmistakable terms that Gram Panchayats cannot be divorced from such schemes nor can their inseparability be diluted with the imposition or intervention of any extraneous exercise of power by any other functionaries to their exclusion. 27. 27. Therefore, the impugned Government Order in G.O.Ms.No.274, ex facie, appears to violate the Seventy-third Constitution Amendment in its object, purpose, letter and spirit and if any schemes or works under the National Rural Employment Guarantee Act, 2005 are covered by INDIRAMMA Programme, the said Government Order also appears to ex facie violate the scheme, language and object of the Act. If the impugned Government Order is intended to operate or is made operative to nullify any existing Committees under G.O.Ms.No.350, to the extent of such retrospectivity also, it appears unsustainable. It is stated that by virtue of the interim orders granted by this Court in related batch of writ petitions, the constitution of any Committees contrary to G.O.Ms.No.350 is stayed. Therefore, the impugned Government Order has to be struck down accordingly, answering the reference against the legality and constitutionality of the impugned G.O.Ms.No.274. 28. In the result, G.O.Ms.No.274 Panchayat Raj & Rural Development (RWS.III) Department, dated 08-09-2009 is declared as illegal and unconstitutional and is accordingly struck down and the writ petitions are allowed accordingly without costs.