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6. Learned counsel Sri P.Vishnuvardhan Reddy appearing for the petitioner in W.P.No.339 of 2019 dwelled into legislative history in vesting powers in Grama Sabha of a village located in agency area. He would submit that in exercise of power under Article 243-M(4)(b) of the Constitution of India, Panchayats (Extension to the Scheduled Areas) Act, 1996 (Act 40 of 1996) was notified. Section 3 of the said Act stipulates that the provisions of Part-IX of the Constitution, relating to Panchayats are extended to Scheduled areas subject to such exceptions and modifications as are provided in Section 4 of the Act 40 of 1996. He would submit that as per the Section 4(m)(i) of the Act 40 of 1996 the State Legislature can endow special powers in the Panchayats in the scheduled areas and can enable them to function as institutions of self-Government and the Gram Sabha be endowed specifically with the power to enforce prohibition or to regulate or restrict the sale (2013) 6 SCC 476 PNRJ WP No. 47615/2018 & batch and consumption of any intoxicant. Consequent to the Act 40 of 1996, A.P.Panchayat Raj Act, 1994 was amended and Part VI-A was incorporated. This part deals with special provisions relating to Panchayats and Zilla Parishads located in scheduled areas. In exercise of power vested in Section 242-I, Government of Andhra Pradesh notified PESA Rules, 2011. According to the learned counsel, Rule 4(xi)(n) of the A.P.Panchayats Extension to Scheduled Areas (PESA) Rules, 2011 (Rules 2011) notified vide G.O.Ms.No.66 Panchayat Raj and Rural Development (MDL.I) Department, dated 24.03.2011, requires the Grama Sabha to be consulted before the grant of any licence or any development programs in the village. By referring to the above provision, he would submit that as it is mandatory to obtain prior consent of Grama Sabha before establishing the petroleum retail out notification issued calling for applications for location of retail outlets in scheduled areas (50) is ex facie illegal.

12. Part IX of the Constitution of India deals with Panchayats. Indian Parliament, enacted Act No.40 of 1996 on 24.12.1996 called as "Provisions of the Panchayats (Extension to Scheduled Areas) Act, 1996" (PESA Act). By this Act, Part-IX of the Constitution of India is extended to the scheduled areas with certain exceptions and modifications. Section 4 empowers the State Legislature to make laws to strengthen Panchayat Raj system in scheduled areas. It also imposes restrictions on State Legislature on the items listed out therein, while extending the provisions of Part IX of the Constitution. According to Clause-"E" Grama Sabha shall be vested with power to approve the plans, programmes and projects for social and economic development before such plans, programmes and projects are taken up for implementation by the Panchayats. According to Clause "I" Gram Sabha or Panchayats should be consulted before acquisition of land in scheduled area. From the reading of Section 4 it is PNRJ WP No. 47615/2018 & batch apparent that the Act intends to vest powers in Grama Sabha to regulate over-all development activities in the village, control over water bodies, prospecting, license lease for minor mineral, to impose restrictions on sale and consumption of intoxicants, ownership of minor forest produce, management of village markets, control of money lending, control over institutions and functionaries in social sectors, control over local plans and resources. The underline objective is to ensure over all development of civic amenities and social infrastructure with greater say to the local residents in development activities, and to ensure such development activities do not affect the customary law, social and religious practices, traditional management practices and community resources. A true reflection of local self-Government.

13. A.P.Panchayat Raj Extension of Scheduled Areas (PESA) Rules, 2011 are notified in exercise of power vested in Government under Section 268(1) read with Section 242-A to 242-I under Part VI-A of the Panchayat Raj Act, 1994. These Rules give effect to the mandate of Act, 40 of 1996. As can be seen from these Rules, what is enlisted in Section 4 of the Act are now incorporated in Rule 5, 6, 7 and 8. Rule 4 deals with 'Grama Sabha' and its functions in the village within the scheduled area. It comprises of adult members of the village, whose names are included in the electoral roll of the village. The Sarpanch of the Gram Panchayat shall be the President of Grama Sabha. Sub-rule

22. As can be deduced from statutory framework and precedent decisions, two aspects are clear, 1) that land in scheduled areas cannot be transferred/vested either in the form of sale/lease/mortgage in a non-tribal whether that land belongs to a PNRJ WP No. 47615/2018 & batch tribal or non-tribal; and 2) greater say to Grama Sabha in all development activities of a village in agency area. However, at the same time, it does not extend to imposing restrictions on doing business in areas other than areas specified in section 4 of PESA Act and PESA Rules.