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Hindurao Balwant Patil and anr. Vs. Krishnaro Pashuram Patil and ors. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies;Constitution
CourtMumbai High Court
Decided On
Case NumberWrit Petn. Nos. 1574 and 1791 of 1981
Judge
Reported inAIR1982Bom216; 1982(1)BomCR65
ActsMaharashtra Co-operative Societies Act, 1960, 1961 - Sections 73G(2); General Clauses Act - Sections 16; Consititution of India - Article 19(1)
AppellantHindurao Balwant Patil and anr.
RespondentKrishnaro Pashuram Patil and ors.
Appellant AdvocateY.R. Naik, Adv. in W.P. No. 1791 of 1981 and;M.V. Paranjape and;P.M. Pradhan, Advs. in W.P. No. 1574 of 1981
Respondent AdvocateP.M. Pradhan, Adv.,;S.G. Deshmukh, Asst. Govt. Pleader,;B.R. Nalik and;Y.R. Naik, Advs.
Excerpt:
it was adjudged that in the absence of the rule or bye-law where a chairman or a vice-chairman had been removed by the vote of no confidence, then in regard to this the managing committee was said to have no inherent or implied power - thus, such power could not be claimed under section 16 of the general clauses act, 1897 - hence, the absence of such power could not said to be violative of article 19(1)(c) of the constitution of india - - hence on 27th may 1981 a resolution expressing a vote of no confidence was passed by the majority of the members of the board against the chairman as well as the vice-chairman. 73g as well as bye-law 34 (d) merely lays down outer limit known as a term of office ,which will have to be construed to mean ,that the elected body will not continue in office.....dharmadhikari, j.1. as in both these petitions, common questions of law and fact are involved, they were heard together and are being disposed of by this common judgment. shree dudhganga vedganga sahakari sakhar karkhana limited (hereinafter referred to s the society) is a registered co-operative society registered under the maharashtra co-operative societies act . 1960 (hereinafter referred to as the act. ) in the year 1973 the said society was declared as the specified society under sec. 73g of the act. on 5-11-1976 the bye-laws of the society were amended.2. in april 1979 the present board of directors was elected and petitioner nos.1 and 2 in writ petition no.1791 of 1981 , i,e, hindurao and shankarrao, were elected as chairman and vice-chairman respectively. these elections were held.....
Judgment:

Dharmadhikari, J.

1. As in both these petitions, common questions of law and fact are involved, they were heard together and are being disposed of by this common judgment. Shree Dudhganga Vedganga Sahakari Sakhar Karkhana Limited (hereinafter referred to s the society) is a registered Co-operative society registered under the Maharashtra co-operative societies Act . 1960 (hereinafter referred to as the Act. ) In the year 1973 the said Society was declared as the specified Society under Sec. 73G of the Act. On 5-11-1976 the bye-laws of the society were amended.

2. In April 1979 the present board of directors was elected and petitioner Nos.1 and 2 in writ petition No.1791 of 1981 , i,e, Hindurao and Shankarrao, were elected as Chairman and Vice-Chairman respectively. These elections were held as per the procedure prescribed under chapter XI A of the Act. On 19th of May 1981 a notice was issued by the Managing Directors of the society to convene a meeting of the Board of Directors on 27th of May 1981 for passing a vote of not confidence against the Chairman and the Vice-Chariman. It appears from the record that on 21st of May 1981 petitioner shankarrao filed a dispute under Sec. 91 of the Act with the Regional Deputy Director of Sugar. Kolhapur, challenging the notice dated 19-5-1981 issued for convening the meeting for passing a vote of no confidence. In the said dispute the authority concerned did ot pass any interim orders. Hence on 27th May 1981 a resolution expressing a vote of no confidence was passed by the majority of the members of the board against the Chairman as well as the vice-chairman. On 28th May 1981 the petitioners moved the Regional Deputy Director of Sugar for interim relief. But the said application was rejected and, therefore, the dispute it self was withdrawn as it had become infructuous. Thereafter a notice was issued by the Managing Director of the Society for convening a meeting on 6th of June 1981. Petitioner No.2 shankarrao filed a second dispute with the Regional Director of Sugar, pune obviously under Sec. 91 of the Act praying inter alia for an order of prohibition restraining the Board of Director from electing a new chairman and Vice-chairman. The said dispute was referred to the Co-operative court No.2 by the Director of sugar vide order dated 3rd of June 1981. On 4th June 1981 an ad interim injunction was granted by Co-operative court and it further directed that a notice should be issued to the opponents who had filed caveat returnable on 5th june 1981. Thereafter the case was adjourned for 6th June 1981. In the meantime petitioner Shankarrao approached the Co-operative Appellate court and obtained an ex parte injunction restraining the respondents from holding the meeting. In view of this appellate order, earlier order passed by the co-operative court refusing the injunction was kept in suspension. Thereafter the respondents filed a writ petition before this court bearing writ petition No. 1574 of 1981 and obtained an ex parte stay order on 8th June 1981. On 12 June 1981 petitioner Shankarrao applied for vacating the interim relief. On the statement made by the learned counsel for the other side that the elections of the Chairman and the Vice-chairman will not be held, till 16th June, the matter was adjourned. Ultimately when the matter came up before us on 17th June 1981 we admitted the petition and issued rule returnable on 3-7-1981. During the course of the hearing at the admission stage stage it self both the parties have put in writing the question of law, which is involved in this petition, namely :-

'Whether in the absence of any provision in the Act, rules or the bye-laws of the society, managing committee can pass a resolution of no confidence against the chairman and Vice-Chairman before expiry of their term?:

3. The parties also agreed that during the pendency of this petition fresh elections will not be held. Therefore, the only question which requires consideration in these writ petitions is to find out whether in the absence of any provision in the Act, rules or the bye-laws of the Co-operative society, the managing committee can pass a resolution of no confidence against the Chairman or Vice-chariman . This is the only question which is argued before us. It is not disputed before us that so far as the present society is concerned. There is no provision even in the bye-laws which confers a right upon the members of the managing committee to pass a no confidence motion against the Chairman and the Vice-Chairman has contended before us that the managing committees to be elected under sec. 73G of the Act and under sub-sec (2) of the said section , the members of the managing committee have a right to hold the office for a period of five years from the date on which the first meeting is held. The term of the Chairman and the vice- chairman is co-extensive with the term of the members of the committee. Since in this case the elections to the managing committee were held in the year 1976 in the absence of any provision to the contrary , the petitioners namely the Chairman and vice- Chairman of the society have a right to continue in office till the expiry of five years . According to Dr. Naik the bye-laws of the society provide for the constitution of the managing committee , including as to how the election of the Chairman and vice- Chairman is to be held. Though in the model bye-laws framed by the Co-operative department , a provision is made for passing a vote of no confidence against the Chairman and vice- Chairman under bye-law No. 34(D), the said bye-law was not approved by the Registrar, of the Co-operative societies so far as the present society is concerned. Therefore, apart from the fact that there is no provision in the bye-laws or in the act or the rules to enable the members of the board to pass a resolution of no-confidence against the Chairman or the vice-Chairman , in fact so far as the present society is concerned though the society initially had framed such a bye-law and had submitted it to the Registrar under Sec. 13 of the Act, the said amendment was not approved by the Registrar. The order passed by the Registrar rejecting the said part of the bye-law is final as the said order was not challenged by any member of the society. Shri. Nayak further contended that in view of the provisions of S. 73 of the Act, the bye-laws framed by the society in this behalf have the force of law or in any case are binding upon its members. Therefore, the said bye-laws are also binding upon the respondents . As in the bye-laws no provision is made for passing a resolution of no-confidence against the Chairman and the Vice- Chairman the resolution passed on 27th May 1981 is illegal and ultra vires of the powers of the members of the board and therefore cannot result in removal of the Chairman or the Vice-Chairman . As the said resolution passed in the meeting D/- 27-5-81 is ab initio void there is no vacancy so far as the offices of the Chairman and the Vice-Chairman are concerned, which could be filled in by holding fresh election. In support of his contention , Shri Naik has relied upon the decisions of various High Courts in Lambha Mandali v. Dist. Registrar, Co-operative Societies (1973) 14 Guj Lr 786 : Kantha Devi v. State of Rajasthan , Jehangir Bhikaji v. Corporation of City of Nagpur 1960 Nag LJ 99 . In substance it is the contention of Shri. Nayak that in the absence of such a specific provision the members of the Board of directors have no inherent or implied power to remove the Chairman and the Vice-Chairman by passing a resolution of vote of no confidence .

4. On the other hand it is contended by Shri. Paranjape , learned counsel appearing for contesting respondents that every citizen has a right to form an association with all the components of this right and the said right with its components is guaranteed by Art. 19(1)(c) of the constitution of India , of course subject to permissible limits. As a necessary consequence of this , after formation of association a citizen has a further right to assemble peaceably under Art. 19(1)(b) . After assembling a citizen has a further right to discuss , to express his opinion and pass a resolution which will be collective expression of the opinion or the decision of the members present and participating in the discussion . These members can exercise these rights for practising any profession or for carrying on any occupation, trade or business. Right to form an association does not end with mere formation of association . But as a necessary implication of this right citizens have a further right to manage affairs of the association. According to Shri Paranjape all these rights flow from biological evolution of human species as gregarious animal . Man is a social animal and a social being and therefore apart from the provisions of the constitution he has a natural right to assemble and to form an association . Shri. Paranjape further contended that any provision made in the enactment for the purpose of regulating any of these rights will have to be construed in the back ground of this natural right and so construed both the sub-sections of S. 73G as well as bye-law 34 (d) merely lays down outer limit known as a term of office , which will have to be construed to mean , that the elected body will not continue in office beyond the period of five years and it will not be necessary to hold election or to make appointments earlier . According to Shri. Paranjape the term prescribed only prescribes an outer limit and does not control the fundamental right of a citizen guaranteed by Art . 19(1)(a) , (b) (c) and (g) of the constitution . Shri. Paranjape also contended that if the said provisions are not read or construed as contended by him , the restriction incorporated in the said provision will be violative of the members' fundamental right and is not saved by any of the clauses of the Art. 19 . He also contended that all these provisions have to be construed in the light of the subject matter of the legislation and the object sought to be achieved . Shri. Paranjape has also contended that the members of the board who have power to elect the chairman and Vice- Chairman have also an implied and inherent power to remove them by passing a resolution of vote of no confidence, because in the very nature of things if these office bearers are to function properly , they must enjoy the confidence of the members on board. The moment they lose this confidence they must vacate the office . He has also contended that the members of the board had an implied right to pass such a resolution because they have a right to elect the office bearers . Thus, the board is the appointing authority of the Chairman and Vice- Chairman and they have an inherent right to remove them on the basis of the principle incorporated in section 16 of the General Clauses Act. In support of his contentions Shri. Paranjape has placed reliance upon the decision of the Supreme court in M/s . Heckett Engineering Co. V. Their Workmen : (1978)ILLJ23SC : Manton v. Brighton Corporation (1957) 2 ALL ER 101 and Damayanti v. Union of India : [1971]3SCR840 .

5. Shri Sawant, learned Additional Government pleader appearing for the State has supported the contention of Shri Naik viz, that in absence of any provision conferring a power to pass a vote of no confidence, the board of Directors of no confidence, the board of Directors has no powers to pass a vote of no confidence, the board of Directors had no power to pass such a resolution and, therefore, the impugned resolution is illegal and void.

6. For property appreciating the controversy raised before us, it will be worthwhile if a reference is made to some of the relevant provisions of the Act From the preamble of the Act it is quite clear that with a view to providing for orderly development of the co-operative movement in the State in accordance with the relevant directive principles of the State policy enunciated in the Constitution of India the said Act was enacted by the State iegislature. This Act provides for registration of the Society by making a necessary provision in Chapter II, Sec. 6 of the Act provides fr conditions of registration. An application for registration is contemplated by Sec. 8 and then Sec. 9 confers a power upon the Registrar to register th Society together with its byelaws, Sec. 13 deals with the amendment of the bye-laws. Chapter III deals with the members and their rights and liabilities. Sec. 23 lays down that no society without sufficient cause can refuse admission to a member who is otherwise duly qualified therefore. A right of appeal is also conferred upon an aggrieved person if such an admission is refused and the order of the Registrar in appeal is made final. Sec. 36 deals with incorporation of the society and then in Chapter VII provisions are made for the management of the. Societies. Sec. 72 lays down that subject to the provisions of the Act and the Rules, final authority of every society shall vest in the general body of the members. Then comes Sec. 73 which reads as under:-

'73, The management of every society shall vest in a committee, constituted in accordance with the Act, the rules and the bye-laws, which shall exercise such powers and perform such duties as may be conferred or imposed respectively by this Act, the rules and the bye-laws.

Thus it is clear that Supreme Body is the General Body and managing committee can exercise only those powers which are conferred upon it by law.

7. Sec. 73G makes a provision for conduct of elections to the committee, and of officers of specified societies, and the term of office of members of such committees, The said section reads as under:

'73G. (1) The election of the members of the committees and the officers by the committees, of the societies of the categories mentioned below shall be subject to the provisions of Chapter XIA and shall be conducted in the manner and down by under that Chapter:-

(I) Such Apex Co-operative Institutions which the State Government may by general or special order published in the official Gazette, from time to time, specify in this behalf, regard being had to the financial position and share capital of such institution:

(ii) all District Central Co-operative Banks:

(iii) all Primary Land Development Banks:

(iv) (a) all District Co-operative sale and purchase organisations.

(B) all Taluka Co-operative sale and purchase organisations.

(V) all co-operative spinning Mills:

(vii) any other societies of class of societies which the State Government may by general or special order published in the Official Gazette, from time to time, specify in this behalf, regard being had to the financial position and share capital of such institutions. (2) When the election of all the members of the committee of any such society is held at the same time, the members elected to the committee at such general election shall hold office for a period of five years from the date on which the first meeting is held and shall continue in office until immediately before the first meeting of members of new committee.

(3) Notwithstanding anything in the bye-laws of any such society, only the committee of management shall be elected by a general body of members of the society; and all other committees authorised by or under the bye-laws may be constituted only by electing or appointing of persons from among the persons who are members of the committee of management and all such committees shall be sub-committees of the committee of management and shall be subordinate to it.'

8. The bye-laws of the Society provide for the procedure for the election of the Chairman and the Vice-Chairman, Therefore, it is quite clear that the Act is a regulatory piece of legislation which deals with the rights, obligations and duties of the members of the Registered society. In this case we are not concerned with the rights of the members of the Society as such, but we are only concerned with the rights of a members of the Board of Directors. The members of the board of directors are elected as per the procedure prescribed by Chap. XIA of the Act which was inserted by Maharashtra Act No. XXVIII of 1971. The elections are held under the control of the Collector. The Committee referred to in Chap. XIA of the Act is the same as that of the Board of Directors. Therefore, if the rel;evant provisions of the Act as well as the bye-laws are read with Sec. 73 of the Act, it is quite clear that the Board of Directors is to be constituted in accordance with the Act, Rules and the bye-laws and the said Board or Directors can exercise such powers and perform such duties as may be conferred or imposed respectively by the Act. Rules or the bye-laws. Bye-law 34 of the present society lays down that Board of Directors will be entitled to elect Chairman and the Vice-Chairman from amongst themselves in the first meeting of the Board, Bye-laws 34 (c) also makes a provision for passing of a resolution of vote of no confidence against the Board of Directors by the general body. As already observed the provisions made in the model bye-law regarding passing a vote of no confidence against the Chairman and the Vice-Chairman is not incorporated in the bye-law of the Society. It is neither disputed not can ir be disputed that these bye-laws are binding on the members of the Society. Sec. 73G(2) lays down that the members elected on the committee viz. The board of directors shall hold office for a period of five years. According to Shri Paranjape the persons who have right to elect the Chairman and the Vice-Chariman have got inherent or implied power to remove then in case of loss of contidence. In this context he has also placed reliance on the provisions of the General Clauses Act. From the bare reading of the provisions of the General of the Act cannot apply to an elective office, Various provisions of the General Clauses Act. It is quite clear that Sec. 16 of the Act cannot apply to an elective office. Various provisions of the Act do no prohibit a citizen from exercising his right guaranteed under Art. 19(1)(c) of the Constitution, nor it prohibits a citizen from assembling or participating in the discussion. Law merely prescribes conditions which must be observed if he wants to become a member of the Society or the board of Directors. Right to stand as a candidate or contest election is not a common law right. It is a special right created by statute and can only be exercised on the condition and in the manner laid down or prescribed by the enactment concerned. The Chapter dealing with the fundamental right has no bearing on such a right which is a creation of statute it self. The petitioner has no fundamental right to elect Chairman or Vice-Chairman. That right is creation of the Act it self. If the right itsel is created by the statute, then obviously it is subject to the conditions as laid down by the statute. It is no doubt true that many a time term of the office is prescribed by the statute so as to provide for the outer limit. But at the same time the term of office is also prescribed to give a security of tenure to enable the office bearers to carry on the management of the society effectively and efficiently, in the interest of the society as a whole. If no term is prescribed and the tenure is permitted to be controlled by the whims of the members, then management of the society will become difficult if not impossible. This does not mean that licence is granted to the office bearers to act in any way they like. Apart from the right to resign from the post, Sec. 78 confers a power coupled with duty, upon the Registrar to remove the committee or its members. If in the opinion of the Registrar the committee of the society or any member. If in the opinion of the Registrar the committee of the society or any member of such committee persistently makes a default or is negligent in the performance of his duty or commits any act, which is prejudicial to the interest of the society or disobeys the direction, etc. Section 144-E and R. 58 of the Rules provide for the disqualification for being elected or for being a member of the committee of any specified society. Section 144G also deals with disqualification for failure to lodge accounts of election expenses. This is not the end of the matter. Even bye-law 37 of the bye-laws of the Society provides for the disqualifications for continuing as member of the Board of Directors. A provision is also made by bye-law 34 (c) for passing a vote of no confidence against the whole of the Board of Directors by the general body Therefore. The legislature in its wisdom has made various provisions for the removal of the members of the Board. Thus, the term of office prescribed by Sec. 73G is not wholly unqualified or unconditional. The legislature has not chosen to make any provision for passing a vote of no confidence against, the Chairman and the Vice-Chairman either in the Act or in the Rules. Such a provision could have been mae by the society by framing necessary bye-laws. But to the present case such a provision is not made or to be precise, though suggested the said proposal was turned down by the Registrar by a specific order. Even the provision made in this behalf in the model bye-law if read as a whole, it is quite clear that the right conferred by the said model bye-law is also conditional one. It prescribes for special majority for passing such a resolution. It also lays down time limit within which such a resolution is to be moved as well as the period of notice for such a meeting.

9. As observed by the Full Bench of the Delhi High Court in Surai Prakash v, State of Punjab, AIR 1963 Delhi 39 (at p. 41).

'Being presumably conscious of the subtle corrupting effect of power, the Legislature has fixed this time limit of three years with a desire to insulate the democratic set-up from power intoxication. History all over the world shows that , again and again, men put in power for temporary periods seek for some new reasons to retain it. Craving for power is an appetite which grows most with what it feeds upon. It is for this very reason that democracy has in its practical wisdom sought to make its own tenure of power temporary and to hedge its exercise with limitations and restrictions. These elements seem to constitute the essential prerequisites of a true democratic set up. The limitation placed on the life of the members of a municipal Committee seems to be inspired by this democratic instinctive foresight on the part of the legislature.'

It cannot be forgotten that the Co-operative Societies Act has been enacted having regard to the directive principles of the State policy as enshrined in the Constitution of India. Co-operative movement is a socio-economic and moral movement. To say the least it is a part of the scheme of decentralisation and deconstruction of power. Collective power intoxication cannot be equated with co-operatiion. In the very nature of the said movement it must not be only self regulated but the constraints and restraints are inherent in the movement it self. The rights conferred or created by the statute are coupled with duty. Fixity of tenure helps proper administration and management of the societ. Co-operative movement cannot be permitted to be polluted or chocked by internal or individual strike nor it can be permitted to be polluted by purely polities. Co-operative capitation despotism is not co-operation. On the other hand co-operatation. Is a substitute for self interest of an individual or a group of individuals for the benefit of whole community. Therefore, if the society it self while framing and adopting its own code oof conduct in the form of bye-laws, which are to be duly approved by the Registrar, has not made any provision for removal of the Chairman and Vice-Chairman by passing a vote of no confidence, it cannot be said that the step taken by the Society or Registrar in the behalf is not a regulatory one nor is in the interest of the society or the general public. The so-called mandate theory cannot be pushed to ridiculous extremes to convert co-operative movement into an arena or akhada or power polities. Whenever the legislature though that a person is not fit to continue as a member of the board. Specific provisions are made for his removal. A person is elected ad Chairman or Vice-Chairman for a particular term. His office is controlled by the provisions of the Act. It is not an office at will and therefore, to such an office Section 16 of the General Clauses Act cannot apply. It is not necessary to deal with this aspect of the matter in detail in view of the decision of this Court in Jehangir Bhikaji v. Corporation of City no Nagpur 1960 Nag NJ 99. A similar view seems to have been taken by the Rajasthan High Court in Kanta Devi v. State of Rajasthan .

10. So far as the contentions raised by Shri Paranjape based on the provisions of Art. 19(1)(c) of the Constitution are concerned. It is not possible for us to accept any of these contentions. In substance it is contended by Shri Paranjape that a person who has a right to form as association and to elect the office-bearers has a component right to remove them in case of loss of confience. As already observed, the right to contest the election and the right to move for setting aside an election or right to recall the person already elected are not common law rights. These and therefore can be enforced only in accordance with and subject to the conditions laid down therein by the strange concerned. The right guaranteed by Ar. 19(1)(c) is a fundamental right common to all citizens. It is a right which can be enjoyed by all and everybody. This has no reference to the right, conferred or created by a particular statute. As already observed S. 73 in specific terms lays down the powers and functions which could be exercised by the members of the board of directors. Apart from the powers and the duties conferred or imposed by the Act, rules and the bye-law on a member of the board of directors, a member has no further right or power. Board of directors is it self a creation of stature. An election bled to the said board and the right conferred upon the member to eject office bearers is also a creation of the same stutute. The statute has created a right and has also imposed restriction. The Act. Rules and the bye-laws do no center any right upon the members of the Board of directors to remove the Chairman and the Vice-Chariman by passing a mere vote of no confidence. Therefore it will not be proper to confer such a wider power upon the board of directors by taking recourse to the doctrine of implied or inherent power.

11. It is no doubt true that in Manton v. Brighton Corporation. (1951) 2 All E R. 101 it is held that the term prescribed is an outer limit. But it cannot be forgotten that Sec. 73G not only lays down the term of office but also lays down the time from which it commences as well as its outer limit. Apart from the terms opf five years. It further lays down that the committee shall continue in office until the new incumbents are elected. The decision in M/s. Heckett Engineering Co. V. Their Workmen, : (1978)ILLJ23SC is of little assistance while dealing with the question raised before us, which relates to the elective office created and controlled by the enactment it self.

12. Another decision upon which reliance is placed by Shri Paranjape viz. Damayanti Naranga v. Union of India, : [1971]3SCR840 is also distinguishable and cannot be applied to the facts and circumstances of the present case. In that case the Supreme Court was concerned with the question of involuntary composition of the association viz. Foisting members upon an association. The said decision is subsequently distinguished and explained by the Supreme Court in D. A. College Jullunder v. State of Punjab. : AIR1971SC1737 , while distinguishing the said decision the Supreme Court has observed as under for D. 1747).

'A reference has been made to recent case of Smt. Damayanti Naranga v. Union of India W. P. No. 91 of 1564, D/- 32-2-1971, : [1971]3SCR840 that a compulsory affiliation by statue would interfere with the right of association. This argument in our view is untenable because in that case Parliament passed a law under entry 63 of List II of Sch. VII to the Constitution under which a Hindi Summerton was to be constituted which was to consist of the first members of the Hindi Sammelan registered under the Societies Registration Act and all persons who becomes members thereof in accordance with the rules in that behalf. This statutory Sammelan was constituted as a body corporate the first members of which were to consist of persons who immediately before the appointed day were life members of the society, had been Presidents of the society, had been Presidents of the society or were life members of the society, had been Presidents of the society or were awarded the Mangla Prasad Paritoshik by the Society, There were also other provisions by which the Hindi Sammelan Society, its constitution as well as its property was affected. In these circumstances it was held that the Act in so far as it interlards with the composition of the Society in constituting the Summerton violated the rights of the original members of the society to form an association guaranteed under Art 19(1)(c), No. Such thing was intended or effected by Sec. 5 of the Act. At any rate the D. A. V. College Trust and Management Society is not being interfered with by any attempt to form an association with the University, We can see no infringement of Art. 19(1)(c).'

In this context reference can usefully be made to the following decisions:

Kamareddy Suryanarayana v. District Co-operative Officer. : AIR1976AP340 (FB) Peddanaickenpalayam Co-operative Agricultural Bank Ltd. V. Govt. Of Tamil Nadu. : AIR1979Mad241 : Drij Gopal Denga v. State of Madkya Pradesh. : AIR1979MP173 and H. Puttappa v. State of Karnataka. AIR 1973 Kant 148 .

13. The posts of Chairman and Vice-Chairman are creation of the stature It's election and power and duties are circumscribed or conditioned by the provisions of the Act rules and bye-laws. The bye-laws lay down a code of conduct of self-discipline adopted by the Society. Therefore, it cannot be said that only because the members themselves have chosen not to make any provisions for passing a vote of no confidence or have resolved by framing bye-laws that the Chairman and the Vice-Chairman shall continue in office for a specified term subject to the other provisions of the Act. Rules or the by-laws it cannot be said that the fundamental right guaranteed under Art. 19(1)(c) is being violated in any way, The provisions of the Act, rules and the bye-laws are regulatory in nature and amount to reasonable restrictions in the interest of the society as well as general public.

14. The decision reported in N. Venkatratnam Naidu v. District Collector. Nellore, : AIR1972AP349 wherein it was held that there is an inherent right to pass a vote of no confidence, is overruled by the larger Bench of the same High Court in N. Venkata Narayan v. District Deputy Collector ILR (1975) AP 242 and in out opinion rightly, Therefore it is not necessary to deal with the said decision in detail.

15. However, it was faintly argued by Shri Paranjape that the local authorities or Corporations created by the statutes stand on a different footing, whereas a co -operative society is a voluntary association and, therefore the principle applicable to the said authorities is not applicable to a body like a co-operative society. In our opinion this contention is also not well founded. The Act contemplates registration of the society. Registration of the society Is treated a body corporate under Sec. 36 of the Act. Therefore to some extent the society registered under the Act stands on a different footing than an unregistered or an ordinary organisation.

16. It was then contended by Shri Paranjape that if the managing committee is to function properly, the confidence in the Chairman and the Vice-Chairman is a must and the loss of confidence must result in their eviction from the office. In our opinion this is not the whole truth. Whimsical removal of the office bearers at any time without rhyme or reason is bound to result in uncertainty and if the office bearers have to depend for their tenure solely on on the while of members of the board then instead of managing the and its affirs, they will have to spend their whole time in managing the members of the board only. This is hardly in the interest of co-operative movement and, therefore, if for regulating its own affairs by raining necessary bye-laws. In its wisdom, the Registrar and the society thought it fit not to make such a provision, then it cannot be said that it is any way bad in law. It is a conscious act of the society as well as the Registrar and is not merely accidental slip or omission in this context it cannot be forgotten that ultimately the final authority in the matter of management of the society vests in the general body of members and not in the board of directors. By the bye-law 34 (c) the power is conferred upon the general body to pass a vote of no confidence against the board of Directors. There are other provisions in the Act. Rules and the bye-laws dealing with disqualifications and sufficient to protect the society from mismanagement etc.

17. Further an unhampered, unconditional and uncontrolled power to remove office bearers without any rhyming or reason is bound to affect the management and the homogeneity of the society. Therefore, in all modern legislations specific provisions are made for regulating this right to remove the office bearers by passing a vote of no confidence. Such a regulation of rights is also contemplated by the model bye-laws. The amendment to the bye-laws . proposed by the society, which was not approved by the Registrar, also provided for a regulatory procedure, including a notice as well as special majority etc. The order passed by the Registrar refusing approval to the proposed amendment to the bye-law has become final and is binding on the respondents who are members of the Society. Now they cannot get over the said finality by importing the doctrine of implied or inherent power though it is open to them to move for the amendment of the bye-laws over again. In the absence of such an amendment they cannot claim any wider, unregulated and uncontrolled right in this behalf. In the absence of any such power in the bye-laws by necessary implication. It will have to be held that the members of the Board are prohibited and debarred from exercising any such right or power.

18. In this context it cannot be forgotten that the Chairman or the Vice-Chairman though elected by the members of the Board, become office bearers of the society as a whole after their election. They have a right to continue in office for five years which term is co-extensive with the term of the committee or the board of directors. The enactment it self provides for the removal of the members under certain circumstances only. When law has made specific provision in this behalf if will not be open to adopt some other procedure to achieve the same object. By importing the doctrine or implied and inherent power or right to recall, the members of the board cannot be permitted to do indirectly what they are not permitted to do directly under any of the provisions of the Act, rules or the bye-laws. Power to recall is not inherent in the electorate. Therefore, in the absence of such a power it was not open to the members of the Board of Directors to remove the Chairman or the Vice Chairman by passing a mere resolution of vote of no confidence. In the result, therefore, the resolution of no confidence passed against the petitioners is set aside, it being ultra vires of the power of the members of the Board. As a necessary consequence of this, the Chairman and the Vice-Chairman are entitled to continue in office for the unexpired period of their tenure, obviously subject to th other provisions of the Act, rules and the bye-laws.

19. However, before parting with this case, we might observe that this is a case wherein the meeting for passing the vote of no confidence was already held and the resolution is also passed by the majority of the members of the Board. Thus, the petitioners very well knew that they no longer enjoy the confidence of the Board. In these circumstances the petitioners should well consider whether they should resign from the posts. Moreso in view of the well established conventions of public life as well as of the co-operative movement which is based on mutual trust. 1982 Bom/15 V G-14A

20. In the result, therefore, writ petition No. 1719 of 1981 will have to be allowed. Hence the Rule is made absolute in the said petition. As a necessary consequence of this writ petition No. 1974 of 1981 is liable to be dismissed. Hence the Rule is discharged in the said petition. However, in the circumstances of the case there will be no orders to costs in both these writ petitions.

21. Order accordingly


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