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N. Venkataratnam Naidu Vs. the District Collector, Nellore and ors. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
CourtAndhra Pradesh High Court
Decided On
Case NumberWrit petn. No. 1197 of 1971
Judge
Reported inAIR1972AP349
ActsAndhra Pradesh Co-operative Societies Act, 1964 - Sections 31 (2) 82, 82(4) and 82(5); Constitution, of India - Article 226; Andhra Pradesh Co-operative Societies Rules - Rule 22
AppellantN. Venkataratnam Naidu
RespondentThe District Collector, Nellore and ors.
Appellant AdvocateP.A. Chowdhary, Adv.
Respondent AdvocateGovt. Pleader and ;P. Babul Reddy, Advs.
Excerpt:
.....societies rules - petitioner was president of managing committee of society - six out of nine members of committee sent requisition to secretary to convene meeting of committee - requisitionists informed secretary that they had lost confidence in petitioner - they desired to elect new president - petition filed for directing respondents to treat petitioner only president - seven members present in meeting expressed want of confidence in petitioner as president and elected respondent in his place - held, petitioner had lost confidence of large majority of committee and was not entitled to continue as president. - - venkataratnam naidu who does not enjoy the confidence of the majority of the members in the board of directors. 3. the official as well as other respondents filed..........him by the six members of the committee. section 32 lays down the manner in which the general and committee meetings of the co-operative societies should be called. sub-section (3) thereof says:'the officer empowered by the bye-laws to call meetings of the committee may, at any time call a meeting of the committee but shall call such meeting within fifteen days of the date of receipt of requisition in writing in that behalf of requisition in writing in that behalf from any of the requisitionists specified in sub-section (2).'as per sub-section (2), one of the four requisitionists is the registrar. it is undoubted that the district collector is the registrar for the district. the fact that the collector required the secretary to convene a meeting of the committee as per section 32 (3) by.....
Judgment:
ORDER

1. Can the Committee of Directors of a Primary Co-operative Land Mortgage Bank express want of confidence in its President or otherwise replace him? This is the principal question that falls for decision in this Writ Petition.

2. Rapur Primary Land Mortgage Bank in the Nellore District is a Co-operative Institution governed by the Andhra Pradesh Co-operative Societies Act, 1964 and the Rules made thereunder. The General Body of the Bank elected the petitioner and eight others as members of its Managing Committee on 28-12-1969. That Committee has to function for three years. On the same day the members of the Committee elected the petitioner as the President. However, after the lapse of some time trouble developed in the Committee and six out of the nine members of the Committee sent on 29-1-1971 a requisition to the Secretary of the Bank to convene a meeting of the Committee for consideration of the subject 'to elect a President replacing the present President Sri N. Venkataratnam Naidu who does not enjoy the confidence of the majority of the members in the Board of Directors.' The requisitionists informed the Secretary in this letter that they had lost confidence in the petitioner and desired to elect a new President in his place. The Secretary, who is an Officer of the Co-operative Department, replied to the requisitionists by his letter dated 12-2-1971 that he had been directed by the President of the Bank to inform them that the meeting of the Board of Directors could not be convened as requisitioned for the purpose proposed, as there was no provision either in the Co-operative Societies Ac or in the Rules thereunder or in the Bye-laws of the Bank to elect a President by replacing the existing incumbent. The requisitionists had already sent a copy of their requisition to the Collectors, Nellore. The Collector wrote to the Secretary of the Bank by an express Memorandum dated 1-2-1971, forwarding to him a copy of the petition of the requisitionists and requiring him to convene a meeting of the Committee as per Section 32 (3) within fifteen days from the date of the notice and to report the results of the meeting immediately thereafter. Instead of calling for a meeting. the Secretary had replied to the requisitionists by his letter dated 12-2-1971 as stated earlier. Thereupon the personal Assistant to the Collector, Co-operation, sent his proceeding dated 16-2-1971 to the Secretary that the Secretary had not convened the meeting though called upon to do so. Consequently the personal Assistant to the Collector, in exercise of the powers conferred on him under Section 32 (5) (a) of the Act and in terms of the G.O. Ms. No. 38 dated 22-9-1970, directed that a meeting of the Committee be held at 10 A.M., on 1-3-1971 in the premises of the Bank Rapur to consider the subject mentioned by the requisitionist. It was further directed that the Co-operative Sub-Registrar for L.M.B.S. should preside over the meting. The same officer was also directed to issue necessary meeting notices in the manner prescribed to all the concerned in this behalf. Accordingly notices were sent and a meeting of the Committee was called for 1-3-1971, over which the Co-operative Sub-Registrar for L.M.B.S., Nellore presided. Seven of the nine members attended the meeting and unanimously passed the requisition resolution. As per the resolution , the 3rd respondent to the writ petition was elected as the President in the place of the petitioner. thereupon the petitioner has brought the present writ petition for the issue of a mandamus to the respondents directing them to treat the petitioner as the only President of the Bank and to issue a consequential direction restraining the 3rd respondent from acting as the President of the Bank. The respondents to the petition are the District Collector, Nellore, the Secretary of the Bank, the newly elected President and one Sesha Reddy.

3. The official as well as other respondents filed separate counter-affidavits denying and disputing the petitioner's averments and contentions.

4. The contentions raised for the petitioner are three-fold. They are : The entire proceedings were vitiated by mala fides, as the meeting where respondent No. 3 was elected was brought about by the interference of a Minister. (2) The meting held on 1-3-1971 is not a valid one since it was not called in accordance with law and it was presided over by a person who had no authority to do so. (3) There is no provision in the law which confers power on the committee to express want of confidence in its President or to otherwise replace him.

5. On the allegation of mala fides the petition stated in paragraph 5 of his petition that:

'The District Collector, acting under the dictates of Sri Anam Sanjeeva Reddy, Minister for Civil Supplies, through his Personal Assistant Sri P. Subrahmanya Reddy who is the Special Category Deputy Registrar, authorised the Co-operative Sub-Registrar for Land Mortgage Banks, Nellore to Preside over the meeting to be held not later than 15-2-1971 and to report the result thereof.'

The District Collector, Nellore filed a counter-affidavit stating that he called upon the Secretary of the Bank to convene the meeting in his capacity as the Registrar and 'that it is not true to say that the District Collector acted through his Personal Assistant (Co-operation) under the dictates of the Minister for Civil Supplies on the subject as alleged in the Writ Petition.' These are all the allegations and denials in regard to the interference of the minister with this matter. Excepting the very bald allegation that the District Collector acted under the dictates of the Minister for Civil Supplies. there are no details given as to the time, place and manner in which the Hon'ble Minister had interfered. Such an interference is categorically denied by the District Collector. It is really for the petitioner to make definite allegations about the mala fide. Instead, he chose to make a very vague and bald averment which is specifically denied by the respondent. The petitioner cannot build up a theory of mala fides on such a bald and vague statement of the Minister's interference. (Vide Pratap Singh v. State of Punjab, : (1966)ILLJ458SC State of Punjab, : (1966)ILLJ458SC and Venkatasubbayya v. Govt. of Andhra Pradesh, : AIR1965AP425 ). I am, therefore, unable to give any credence to this story.

6. The next ground on which the proceeding are assailed is that the meeting of 1-3-1971 where the impugned resolution was passed, was not properly convened. Bye-law 39 (e) (ii) of the Bank entrusts to the Secretary the task of convening meetings of the Board of Directors and the other committees of the Bank. It was, accordingly, to the Secretary that the ix requisitionists addressed their requisition, seeking the holding of a meeting of the Board of Directors. The Secretary by his reply of 12-2-1971 declined to do so. The Collector by his express memo dated 1-2-1971 required the Secretary to convene a meeting of the committee as per Section 32 (3), within 15 days from the date of the notice. This was in response to a copy of the requisition sent to him by the six members of the committee. Section 32 lays down the manner in which the general and committee meetings of the Co-operative Societies should be called. Sub-section (3) thereof says:

'The officer empowered by the bye-laws to call meetings of the committee may, at any time call a meeting of the committee but shall call such meeting within fifteen days of the date of receipt of requisition in writing in that behalf of requisition in writing in that behalf from any of the requisitionists specified in sub-section (2).'

As per sub-section (2), one of the four requisitionists is the Registrar. It is undoubted that the District Collector is the Registrar for the District. The fact that the Collector required the Secretary to convene a meeting of the committee as per Section 32 (3) by his memo dated 1-2-71 clearly shows that he exercised his power under Section 32 (3)read with Section 32 (2) and sent up a requisition to the Secretary, who is empowered by the bye-laws to call meetings of the Committee, to convene, a meeting of the committee, to convene a meeting of the committee within 15 days from the date of the receipt of the requisition. It is obvious that the said requisition is in full accord with the procedure laid down by sub-section(3). The requisition sent up by the Distinct Collector also satisfies the requirement of sub-section (4) in specifying the purpose for which the meeting was to be called. Nonetheless the Secretary did not call a meeting. In such circumstances sub-section (5) confers power on Registrar to call a meeting himself. Clause (a) of that sub-section says that if for any reason, a meeting is not called in accordance with the requisition delivered under sub-section (4), then notwithstanding anything in the bye-laws of the society the Registrar shall have the power to call such meeting in the manner prescribed and to determine the time for such meeting and the subjects to be considered threat. It further provides that the Registrar or a person authorised by him in writing in this behalf shall preside at such meeting though he is not entitled to vote. Now, the proceedings of the Personal Assistant to the Collector dated 16-32-1971 were exactly for this purpose. It stated that since the Secretary had not convened the meeting as required, the personal Assistant in exercise of his powers under Section 32 (5) (a) and in terms of the G.O.Ms. No. 38 dated 22-9-1970, convened a meeting of the committee to be held at 10 A.M. on 1-3-71 in the premises of the Bank at Rapur to consider the subject mentioned by the requisitionists. It was further directed that the Co-operative sub-Registrar for L.M.B.S should preside over the meeting. Thus, every detail of sub-section (5) (a) is complied with and the proceedings were properly and validly issued. It is undoubted that the power of the District Collector as Registrar in this behalf was delegated to his Personal Assistant. The meeting of 1-3-1971 is thus seen to be properly convened.

7. The criticism that somebody who had no authority presided over the that sub-section (5) (a) empowers the Registrar to authorise any person to preside over the meeting which he convenes. The proceedings of the personal Assistant of 16-2-1971 directed the Co-operative Sub-Registrar for L.M.B.S. to preside over the meeting and this he did. There cannot, therefore, be any doubt that the meeting was properly presided over. For these reasons, the objections as to the validity of the meeting should be rejected.

8. Then I proceed to consider the principal question that is raised in the case. Is the committee of Directors empowered to express want of confidence in its President or otherwise replace him? It is pointed out by Sri P. A. Chowdary, appearing for the petitioner, that there is no provision either in the Act or in the rules or in the bye-laws providing for expression of no-confidence in the President or for replacing him. The ultimate authority of the Co-operative Society vests only in the general body. In fact, the election and removal of members of the committee is done only by that body and by none else. The general body has not expressed any want of confidence in the petitioner as President. Consequently the resolution passed by the committee on 1-3-1971 is wholly ultra vires the powers of the committee and is not founded on any power.

9. It must at once be noticed that there is no specific provision in the Act, in the Rules and in the bye-laws empowering the committee to pass a motion of no-confidence against the President or to replace him by another. According to Section 30 (1) (a) the ultimate of a Society vests in the general body. It is, however, subject to the provisions of the Act, the Rules and the bye-laws. The proviso thereto provides that such ultimate authority of the general body shall not affect the exercise by the Committee or any other officer of the Society of any power conferred on such committee or officer under the law. The election and removal of members of the committee is one of the functions assigned under Section 30 (2) to the General Body. The committee is defined by Section 2 (b) as the governing body of the Society is entrusted. There is no dispute that the committee which met on 1-3-71 and passed a vote of no-confidence against the petitioner is a Committee within the meaning of Section 2 (b) and consequently also within the meaning of Section 30 (2) (I). Section 31 (2) further reiterates that the general body of a Society shall constitute a committee in accordance with the bye-laws and entrust the management of the Society to such committee. Sub-section (2) (a) of the said section says that the term of office of the committee or of any of its members shall be for such period not exceeding three years as may be specified in the bye-laws. Bye-laws 31 (c) of the Bank lays down that the members of the Board shall hold office for a period of three years. It is thus seen that the committee of Directors hold office for a period of three years. At the same time, it should also be noticed that no period of time is fixed for the tenure of the office of the President. This is a very significant circumstances which should be noted. Rule 22 of the Rules framed under the Act lays down the procedure regarding conduct of election of the committee of societies. It is Rule 22 (c)that provides for the manner in which the election of office-bearers has to be conducted. What it says is that as soon as the members of the committee have been elected, the concerned election officer shall, notwithstanding anything in the bye-laws of the Society specifying the period of notice, shall convene a meeting of the newly elected members of the committee for the purpose of the election of the President, Vice-President Treasurer, Secretary and other office-bearers of the Society by whatever names they are called, and the members of the details of the method of election are laid down in the various sub-rules. Like bye-law 32 of the Bank requires the Board after it is formed to sale from among its members, a President, Vice-Presiding, a Secretary and a Treasure. But, nowhere is there an explicit provision empowering the committee to pass a no-confidence motion in any office-bearer or to replace him with another. From this, it is argued by Sri Chowdary that the impugned resolution, whereunder the petitioner has been sought to be replaced by Respondent No. 3, is without power. He seeks to sustain this contention by referring to the dictum that election is a creature of Statute and that all matters relating thereto should be guided and decided only with reference to some provision of law.

10. It is undoubted as Mahajan, C. J., observed in Jagan Nath v. Jaswant Singh : [1954]1SCR892 that:

'The statutory requirements of election law must be strictly observed and that an election contest is not an action at law or a suit in equity but is a purely statutory proceeding unknown to the common law and that the court possess no common law power. It is also well settled that it is a second principle of natural justice that the success of a candidate who has won at an election should not be lightly interference must strictly conform to the requirements of the law.

What I am concerned with in this particular case is not strictly an election but an expression of no-confidence in the President. True, there is no provision specifically authorising the passing of a no-confidence motion. But, two features, stand out pre-eminently in relation to the President and other office-bearers of a co-operative society. One is, there is no fixed tenure for an office-bearer, though the term of the committee is fixed. Secondly, the President and other office-bearers are dated by the committee and not by the General Body. It should not be forgotten that a co-operative society, as a gram panchayat, is a basic democratic unit intended to help its members to manage some of their affairs for themselves in a democratic way. At every stage of the creation and functioning of a co-operative society it is the will of the members that is important. The Act and the rules distribute the function between the general body and the committee. As I have already pointed out while noticing Section 30, the ultimate authority in regard to a society rests with the general body; but that exercise of ultimate authority is subject to the provisions of the Act and the Rules and the bye-laws. Under the Act, the Rules and the bye-laws entrusted to the committee, while the general body elects or removes members of the committee. Once a committee is elected by the general Body, it the committee that elects the office-bearers. That is Rule 22 (c) and bye-law 32. Added this, there is no fixed tenure of office for the office-bearers. Bearing in mind that it is a democratic institution and also that it is the committee that elects an office-bearer, it should reasonably follow that the office-bearers hold offices during the pleasure of the committee.

11. It is true that had a specific provision been made in the Actor in the Rulers there would have been no doubt whatever. But, could it be said that the absence of a specific provision debars the committee from changing the office-bearers in whom they have no confidence. To hold that way is to deny the very democratic and co-operative principle that runs through the entire length and breadth of the co-operative law. It is reasonable to assume that had the legislature intended to make the office-bearers irremovable during the life of the committee, they would have made a clear provision in that behalf, for, such a provision would be an unusual one. When such a provision is absent it is committee, which is empowered to elect the office-bearers has also the power to remove them and elect others in their places. A reasonable and harmonious construction should be placed on the law. If such construction is ruled out it would result obviously in having irremovable office-bearers. In such an event such office-bearers would not be responsible to the committees. The very factor that the office-bearers are elected by and responsible to the committee would necessarily lead to the reasonable conclusion that they can be removed at the pleasure of the committee. The Committee has such power by necessary implication.

12. I find support to this view of mine in Foster v. Foster, (1916) 1 Ch 532. In that case also, as in the instant case, the Board passed resolution appointing Mrs. Foster a Chairman in the place of the plaintiff. The objection taken to the resolution was that the appointment of the plaintiff as Chairman was for so long as he should be a Director. It was argued that inasmuch as there was no express determination of the period for which the Chairman was to hold office he was to hold it for the whole of the period during which he remained a Director. Peterson, J., repelling this argument observed at p. 542:----

'When the Directors appoint a Chairman they appoint him for such time as they think fit, and there is no contract with the person appointed as chairman that he shall remain chairman until he ceases to be a director, but is open to the directs at any time to substitute another chairman in his place.'

This substantially concurs with the view I have expressed above . I have, therefore, no hesitation in holding that though there is no specific provision in this behalf the committee has power to express want of confidence in any of its office-bearers and elect some other members of the committee in his place.

13. Now in the present case, as many as six out of the 9 members of the committee have sent up the requisition. When the meeting was actually called on 1-3-71 as many as seven members attended it and expressed want of confidence in the petitioner as President and elected the 3rd respondent in his place. This is overwhelming majority for the resolution. It is very manifest that the petitioner has lost the confidence of the large majority of the committee and is not, therefore, entitled to continue a the President.

14. From any angle, it is seen that the relief sought by the petitioner cannot be granted. The Writ Petition is accordingly dismissed. Since it is a new point that has been raised. I direct that the parties should bear their own costs. Advocate' fees Rs. 100/-.

15. Petition dismissed.


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