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S. Lakshmanan v. V. Velliankeri & Others

S. Lakshmanan
v.
V. Velliankeri & Others

(High Court Of Kerala)

Writ Appeal No. 2513 Of 1999 & 376 Of 2000 | 09-04-2002


Srikrishna, C.J.

By a reference order dated 21st March, 2000 made by the Division Bench of Arijit Pasayat,C.J. (as His Lordship then was), and K.S.Radhakrishnan,J., the following question of law has been referred to the Full Bench for decision:

“Whether absence of a specific provision in the Kerala Co-operative Societies Act, 1969 and the Rules framed there under will stand in the way of any motion for loss of confidence relating to President of a co-operative society”

2. Section 28 of the Kerala Co-operative Societies Act, 1969 (hereinafter referred to as “ the”) is titled “Appointment of committee” and provides that the general body of a society shall constitute a committee, for a period not exceeding fiver years, in accordance with the bye-laws and entrust the management of the affairs of the society to such committee. Section 33(1) of thecontemplates appointment of new committee or administrator, inter alia, where a no-confidence motion is passed by the general body against the existing committee. Rule 43 of the Kerala Co-operative Societies Rules, 1969 (hereinafter referred to as “the Rules”) deals with the election of President, Vice-President, Treasurer or any other officer by the members of the committee. This rule provides for a meeting of the members of the committee to be convened and election to be held to the officer of the office bearers of the committee. The counsel on both sides concede that there is no provision in the or the Rules made there under or the Bye-laws which enables or prescribes the procedure for passing of a no-confidence motion by the elected managing committee against the President or any other office bearer, nor is there any provision indicating the consequence of such a no-confidence motion being passed.

3. Mr.Ramakumar and Mr.Rajit, learned counsel appearing for the appellants, contend that the right to express no-confidence in an elected officer is inherent in the democratic process of representative governance, and irrespective of whether such a right is formally enacted in a statute, the very concept of participative democracy, which is equally applicable to Co-operative Societies, would enable the expression of no-confidence by the passing of an appropriate resolution. Counsel for the appellants also contend that a statutory provision, if made, would only enable the regulation of the power which must always be read as inherent in the electorate in a participative democratic set up. They highlight the principle expressed in Section 16 of the General Clauses Act and Section 15 of the Kerala Interpretation and General Clauses Act, 1125 (Act No.7 of 1125). They pointed out that the principle in both these Acts is that when a power to make any appointment is conferred by a statute, then, unless a contrary intention appears, the authority having such power of making the appointment shall also have the power to suspend or dismiss any person so appointed whether by itself or by any other authorities in exercise of such power. Counsel also referred to Articles 74, 75 (3), 163, and 164(2) of the Constitution of India. They urge that under Article 75(3) the Council of Ministers shall be collectively responsible to the House of People. Similarly, under Article 164(2), the Council of Ministers shall be collectively responsible to the Legislative Assembly of the State. The President/Governor in the State shall be advised in the exercise of his function by the Council of Ministers with the Prime Minister/Chief Minister respectively in the Centre and in the States. Counsel contend that the concept of collective responsibility to the House itself implies that the Council of Ministers shall be liable to be dismissed if it ceases to enjoy the confidence of the House. Emphasizing that the Constitution itself contain no provision of passing a no-confidence motion and the consequence thereof, counsel urged that, by the very principle of participative democracy, a convention has been developed whereby the council of Ministers, which is collectively responsible to the House, shall either resign or be dismissed forthwith, if it ceases to enjoy the confidence of the House. The manner of assessing this is a resolution of no-confidence placed before the House.

4. It is, therefore, contended that the principle of collective responsibility envisaged in the Constitution together with its counter part of no-confidence in the Council of Ministers must be read into the provisions of the Co-operative Societies Act also. The Managing Committee elected under Section 28 of theplays the role of Council of Ministers under the Constitution; It is collectively responsible to the General Body of the Society; it shall be liable to be dismissed if the General Body ceases to have confidence in it. As no-confidence is mentioned in Section 33(1) of the Act, the same principle must percolate into the working of the Managing Committee itself. Each office bearer is responsible to the Managing Committee; if he ceases to have the confidence of the Committee, he must immediately vacate his office or be dismissed. The modus operandi of expressing lack of confidence is by bringing forth a motion of no-confidence. This is the substance of the arguments of the counsel for the appellants.

5. Counsel for the appellant also urge that Section 31(3) contemplates the process of a motion for no-confidence under the. Section 31(3) prohibits a person nominated to the committee of an apex or a central society from taking part in the discussion of any no-confidence motion or voting on any such motion. Section 109 of thedeals with the power of the State Government to make rules for carrying out the provisions of the. Sub-section 2(xi) empowers the Government to “make rules with regard to the election of members of the committee by the general body of a society.” Rules 35 and 38 of the Rules deal with the procedure regarding conduct of the election to the Committee of the Societies and constitution of a committee, resignation and removal of membership. There is a specific provision for removal of chairman by a no-confidence motion made in Rule 161 which is found in Chapter XIII of the Rules applicable only to co-operative unions.

6. Counsel also contend that, even if no provision is made in the, Rule or the Bye-laws, the expression of no-confidence by a managing committee in an office bearer such as President, Vice President, etc. could always be in the case of any resolution passed by the committee as in the case of any resolution for transacting other business. It is also pointed out there is no provision in the, or in the Rules, or in the Bye-laws, which bars such a procedure from being adopted. It is contended that, in fact, there is no need or necessity for any special procedure to be prescribed for passing a no-confidence motion by the managing committee. Any improper exercise of such procedure shall always be subject to the Registrar’s power to rescind the resolution under Rule 176 of the Rules, if the Registrar is of the view that the resolution is contrary to the better interests of the society.

7. Counsel for the respondents, however, contend that passing of a no-confidence resolution is not a matter of day to day affair of the society; it is a matter of great moment, and, therefore, cannot be the subject matter of an implied power or procedure of passing of an ordinary resolution. The principles of collective responsibility, adverted to in the Constitution and the Constitutional conventions based upon British Parliamentary practice, are hardly applicable here. A Co-operative Society is neither parliament, nor a Legislative Assembly. A Co-operative Society is the creature of the statute and must function within the parameters of the statute and the rules there under. It is urged that where the statute wanted to recognize and prescribe a procedure for a no-confidence motion, it has dealt with it specifically. Such recognition is available under Section 33(1) of thewhich empowers a no-confidence motion being passed against the entire Committee. Such recognition is also seen in Rule 161, applicable to a Co-operative Union, which empowers the Committee to pass a no-confidence motion against its Chairman. If a no-confidence motion is allowed to be passed at the drop of a hat, with shifting loyalties and political horse trading, the functioning of the Co-operative Society would be paralyzed. Even on general principles, it would be deleterious to read such a provision into the, in the absence of specific prescription, on the basis of an implied power. It is urged that interpretation of Section 28 cannot be governed by the title of the Section; though the title of the Section describes “appointment” of a committee, the Section uses the word “constitute” with reference to the committee. Thus, the argument based on Section 16 of the General Clauses Act and Section 15 of the Kerala Interpretation and General Clauses Act, 1125 has no relevance. It is contended that the word “appointment” can be used only with respect to non-elective offices and positions, and is out of place when applied to elective positions. Parallels are drawn from the Constitutional provisions also.

8. It is contended by the respondents that Rule 39 fixes the term of the Committee. Once this term has been prescribed by the statute, the members of the Committee are entitled to hold their office for the full term unless their tenure is terminated in accordance with the manner prescribed in the statute itself. That manner can be prescribed either in the, or in the Rules or in the Bye-laws. If there is no such prescription, then the members of the Committee shall be entitled to hold their office for the full tenure as indicated in Rule 39 (1) of the Rules. Rule 38 deals with filling up of casual vacancies arising during the tenure of the Committee. With regard to the interpretation put on Section 31, the counsel for the respondents urge that Section 31 merely means that a persons nominated to the Apex or Central Society is precluded from taking part in the discussion of any no-confidence motion or voting on a no-confidence motion. This Section by no means envisages the passing of a no-confidence motion by a Committee in the case of an ordinary society. It is intended to govern a situation of a no-confidence motion by the General Body against the Committee as a whole as contemplated in Section 33(1) of the Act, and puts a bar on the right of a nominated member to participate in or vote on such a resolution. Finally, it is contended that, the functioning of the society is controlled and determined by the bye-laws of the society. The Act and the Rules merely devise the parameters within which the Society must function. Section 109(2) (xxxviii) deals with the residuary power of the State Government to prescribe rules for carrying out the purposes of the. Rule 38 deals with the constitution of the Committee, resignation and removal from membership. The only contingency contemplated therein for removal from membership is by way of resignation. Sub-rule (5) of Rule 38 takes care of a contingency of casual vacancy of a member of a committee being filled by way of election provided in the rules.

9. Both sides have cited to a number of authorities in support of their respective stand and it is time now to refer to them.

10. In Veeeramachaneni Venkata Narayana v. The Deputy Registrar of Co-operative Societies, Eluru, West Godavari District and Ors., ILR 1975 Andhra Pradesh 242, the Andhra Pradesh High Court on consideration of parallel provisions of the Co-operative Societies Act applicable therein, held that, there was no implied power in the committee to move a no-confidence motion against the President and replace him, and, therefore, the removal of the President on that ground was illegal and void.

11. A learned Single Judge of this Court in Narayanan Nair v. Joint Registrar, 1982 KLT 602, took the view that though Rule 43 makes provision in regard to the election of President, Vice President, Treasurer or any other officer, by whatever name he is designated, it does not make any specific provision regarding the removal of the President from his office by the passing of a no-confidence motion. All the same, it is of considerable importance to notice that sun-section (3) of Section 31 precludes a person nominated to the Committee of a Society under Section 31(1) from taking part in the discussion of a no-confidence motion or voting on any such motion, which would indicate that legislature was not totally averse to the idea of a confidence motion. The learned Single Judge observed, on the other hand, the framers of the and the Rules had in mind a situation, when a no-confidence motion would be discussed and put to vote; otherwise, there is no point in having a provision in the nature of what is contained in sub-section (3) of Section 31 referred to above. The learned Judge, however, dismissed the petition before him on the ground of locus standi.

12. The judgment of the learned Single Judge in N.Venkataratnam v. District Collector, Nellore, AIR 1972 Andhra Pradesh 349 was relied on in support of the proposition urged by the appellant. This decision was specifically considered and overruled in Veeramachaneni Venkata Narayana’s case (supra) by a Division Bench of Andhra Pradesh High Court, which held that it was not the function of the court to supply a ‘cause omissus’.

13. In Gregory v. Secretary, Manimala Service Co-operative Bank Ltd., 1990 (1) KLT 374, a learned Single Judge took the view that, if a managing committee could elect a President, it is within their powers to undo their action by canceling the appointment in appropriate proceedings. It is well within their purview to undo an act done by them, which stands recognized in Section 16 of the Kerala Interpretation and General Clauses Act, 1125. For arriving at this view, the learned Single Judge relied on the judgment in Narayanan Nair (supra) and drew sustenance from Section 15 of the Kerala Interpretation and General Clauses Act, 1125. This was followed by another learned Single Judge in Velliankeri v. General Manager, 2000 (1) KLT 319. Drawing sustenance from Section 31(3) of the Act, the learned single Judge observed that, the fact that it is provided in Section 31(3) of thethat a person nominated to the committee of an apex or central society shall not take part in the discussion of any no-confidence motion or vote on such motion itself would indicate that the intention of the legislature is that there can be a no-confidence motion which could be moved in the committee of an apex or central society. Further, there was no provision in the which indicated that the legislature never intended that there cannot be a no-confidence motion in a primary society. Thus, even without recourse to Section 16 of the General Clauses Act, the learned Single Judge concluded that there could be a no-confidence motion which could be discussed in the meeting of a primary society.

14. The learned counsel for the respondents referred to the decision in Oriental Insurance Co. Ltd. v. Hansrajbhai V.Kodala, (2001) 5 SCC 175 [LQ/SC/2001/929] , in support of the proposition that the meaning of the words in the title of a section in a statute cannot overrule the meaning of the words in the Section.

15. In our view, the view taken by the learned Single Judge in all these matters is neither consistent with the philosophy underlying the, nor borne out by any express provision in the or the Rules. The judgments of this court seem to have relied on two factors for arriving at the conclusion that a no-confidence motion can be passed by the Committee even in the absence of a specific provision in the and the Rules. First, reliance on the implied power as also Section 16 of the General Clauses Act that an authority making the appointment can revoke the appointment. Second, the reference in Section 31(3) of theto a no-confidence motion. According to us, both these factors afford no justification for the conclusions that the learned Single Judges have drawn.

16. The Committee is elected by following the procedure prescribed under the and the Rules and is guaranteed a tenure as prescribed in the bye-laws, by virtue of Rule 39(1). It can only be removed by the procedure prescribed in the or the Rules or the Bye-laws. The only contingency under which the Committee may be removed before the end of its tenure is indicated in Section 33(1) of the. Section 33(1) of theenvisages the passing of a no-confidence motion by the General Body which results in wholesale removal of the committee. Barring this provision, there is no other provision by which an elected individual member of the committee can be removed. We are, therefore, unable to accept the contention of the appellants that such a drastic power can be read into the, even where there are no provisions. The doctrine of ‘casus omissus’ is squarely applicable to the situation. In Page 33 of the Maxwell’s Interpretation of Statutes, 12th Edition it is stated as under:

“It is a corollary to the general rule of literal construction that noting is to be added to or taken from a statute unless there are adequate grounds to justify the inference that the legislature intended something which it omitted to express. Lord MERSEY said: It is a strong thing to read into an Act of Parliament words, which are not there, and in the absence of clear necessity it is a wrong to do”………

“We are not entitled”, said Lord LOREBURN L.C., “to read into an Act of Parliament unless clear reason for it is to be found within the four corners of the itself”.

It is not for the court to supply what is an omission in the statute. The Court must interpret the provision as they are without adding anything. This is one of the basic canons of construction of a statute. [See in this connection, Maruthi Wires Industries Pvt. Ltd. v. S.T.O., 1st Circle, Mattancherry, 2001 (3) SCC 735 [LQ/SC/2001/850] ].

17. A Division Bench of this Court in Chacko v. Jaya Varma, 1999 (3) KLT 680 considered the same question. After a review of the earlier judgments in Narayanan Nair (supra), N.Venkataratnam (supra), Gregory (supra), as well as the judgments of the Bombay High Court in Hindurao v. Krishnarao, AIR 1982 Bombay 216, and the Full Bench judgment of the Punjab and Haryana in Jagdev Singh v. The Registrar, Co-operative Societies. Haryana and Ors, AIR 1991 Punjab & Haryana 149, the Division Bench held that, in the absence of a provision in the and the Rules, the President cannot be removed by a no-confidence motion. The Division Bench highlighted the distinction between “appointment” and “election” in Ramanatha Aiyar’s Law Lexicon, Reprint Edition 1987 as under:

“The term ‘appointment’ is to be distinguished from ‘election’. The former is an executive act, whereby a person is named as the incumbent of an office and invested therewith, by one or more individuals who have the sole power and right to select and constitute the officer. Election means that the person is chosen by a principle of selection in the nature of a vote, participated in by the public generally or by the entire class of persons qualified to express their choice in this manner.”

It also considered the judgment in Bar Council of Delhi v. Bar Council of India, AIR 1975 Delhi 200, and approved of the view taken by the Division Bench in Veeramachaneni Venkata Narayana (supra). After a survey of these decisions, the Division Bench was of the view that Section 16 of the General Clauses Act cannot be made applicable and since there is no provision for moving a no-confidence motion, there cannot be a implied power for moving such a motion.

18. The appellants strongly relied on the decision in Foster v. Foster, 1916(1) Chancery Division, 532. In our view, this judgment has no application and is distinguishable. In fact, we respectfully agree with the distinction drawn by the Division Bench of the Andhra Pradesh High Court in paragraph 11 of Veeramachaneni Venkata Narayana (supra). In Para 11, the Division Bench observed as under:

“In coming to the conclusion that there is such an implied power, our learned brother Sambasiva Rao,J. In Venkararatnam’s (sic – Venkataratnam) case – AIR 1972 A.P.349, relied upon the case of Foster v. Foster (1916) 1 Ch.533. The defendant company in that case was governed by several articles of Association. It may be seen that Article 99 provided that the Directors of the company shall have power from time to time to appoint any one or more of their body to be Managing Director or Directors and if they are dissatisfied with the person whom they have appointed as Managing Director, it was open to them to substitute him by appointing another as the Managing Director in place of the old one. The office-bearers of a Society, under the, are not appointed by the Board of Directors. The Board of Directors or the governing body of a committee by whichever name it goes, elects the office-bearers. When they are elected in accordance with the procedure prescribed in Rule 22-C of the Rules, they cannot be removed except in accordance with the procedure prescribed, if any, and in accordance with the Rules. As already noticed, no such procedure is prescribed. We are, therefore, of the view that the case of Foster v. Foster, where it was held that a Managing Director could be removed by the Board and another appointed in his place can have no application to these cases as the President and the office-bearers of the committee are elected in accordance with the provisions of the and the Rules.”

We respectfully agree with this view.

19. In Hindurao (supra), a Division Bench of Bombay High Court considered the same question in the context of the local Co-operative Societies Act. It highlighted that, where a statutory provision ensures the tenure for the Managing Committee, such a tenure cannot be cut short by exercise of an implied power. It is also pointed out that a right arising in connection with elections laws is not a common law right. It is a special right created by the conditions and manner prescribed by the law concerned, and the argument of implied power by application of common law principles has no relevance. The Bombay High Court held that the right of holding the post of Chairman, Vice-Chairman and other officer bearers is created by the statute and is obviously subject to the conditions laid down by the statute. The term of office prescribed is to give a security of tenure 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 passing whims and fancies of the members of the society, then management of the committee will become difficult, if not impossible. This does not mean that members of the committee have a licence to do what they please. They are controlled by the overriding supervisory powers of the authorities under the, and there is also a power vested in the General Body to remove the entire committee by passing a vote of no-confidence. As to the principle which must suffuse and govern the interpretation of the co-operative statute, the Bombay High Court observed in Hindurao (supra):

“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 decentralization and deconcentration of power. Collective power intoxication cannot be equated with co-operation. In the very nature of the said movement it must not be only self-regulated nut the constraints and restraints are inherent in the movement itself. The rights conferred or created by the statute are coupled with duty. Fixity of tenure helps proper administration and management of the society. 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 party politics. Co-operative capitalism despotism is not co-operation. On the other hand, co-operation is a substitute for self interest of an individual or a group of individuals for the benefit of whole community. Therefore, if the society itself while framing and adopting its own code of 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 that 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 of power politics. Whenever the legislature thought 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 as Chairman or Vice-Chairman for a particular term. His office is controlled by the provisions of the. It is not an office at will and therefore, to such an office Section 16 of the general Clauses Act cannot apply.”

Finally, the Division Bench of the Bombay High Court indicated in emphatic words the reasons as to why such a power cannot be lightly read into a statute in paragraphs 17 and 18 as under:

“17. Further, an unhampered, unconditional and uncontrolled power to remove office bearers without any rhyme 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 itself provides for the removal of the members under certain circumstances only. When law has made specific provision in this behalf, it will not be open to adopt some other procedure to achieve the same object. By importing the doctrine of 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, 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 powers of the members of the Board. As a necessary consequence of this, the Chairman and Vice-Chairman are entitled to continue in office for the unexpired period of their tenure, obviously subject to the other provisions of the, rules and the bye-laws.”

With respect, we are in full agreement with the above observations of the Bombay High Court.

20. The decision in Hindurao (supra) was followed by a Full Bench of the Punjab and Haryana High Court in Jagdev Singh (supra). The Full Bench also approved of the view taken by the Andhra Pradesh High Court in Veeramachaneni Venkata Narayana (supra) and held that where a tenure of the office-bearers has been fixed by the bye-laws, and there is no power under the, Rules or the Bye-laws for removal of the office-bearers by a vote of no-confidence by the members of the Committee, they could only be removed by the General Body. The Full Bench also expressed the view that the provisions of Section 16 of the General Clauses Act and the corresponding provision in the local Act were not applicable to an office-bearer; it is applicable only to a person in public service, and not to an elected office bearer.

21. Upon a conspectus of the various decisions cited at the bar, and after critical appraisal of the arguments addressed, we are inclined to take the view that the judgment of the Division Bench of this Court in Chacko’s case (supra) correctly lays down the law. Consequently, all the judgments which take a contrary view are hereby overruled. We answer the reference as follows:

“In the absence of a specific provision in the Kerala Co-operative Societies Act, 1969, the Rules framed there under and the bye-laws of a Co-operative Society, the managing Committee has no right to move or consider a motion for loss of confidence in the President, Vice President or Treasurer or any other office bearer of the Managing Committee elected in accordance with Rule 43 of the Rules.”

Place the appeal before the concern division bench for disposal in accordance with law.

Advocates List

For the Appellant K. Ramakumar, Rajit, Advocates. For the Respondent P. Ravindran, R1 Mr.Thampan Thomas, Advocate, R2 C.Vathsalan. Government Pleader.

For Petitioner
  • Shekhar Naphade
  • Mahesh Agrawal
  • Tarun Dua
For Respondent
  • S. Vani
  • B. Sunita Rao
  • Sushil Kumar Pathak

Bench List

HON'BLE CHIEF JUSTICE MR. B.N. SRIKRISHNA

HON'BLE MR. JUSTICE G. SIVARAJAN

HON'BLE MR. JUSTICE M. RAMACHANDRAN

Eq Citation

2002 (3) RCR (CIVIL) 733

AIR 2002 KER 325

ILR 2002 (2) KERALA 393

LQ/KerHC/2002/293

HeadNote

Co-operative Societies — Managing Committee — Motion of No-confidence — Maintainability — Kerala Co-operative Societies Act, 1969 — Kerala Co-operative Societies Rules, 1969 — Whether in the absence of a specific provision in the Kerala Co-operative Societies Act, 1969, the Rules framed thereunder, and the bye-laws of a Co-operative Society, the managing Committee has the right to move or consider a motion for loss of confidence in the President, Vice President or Treasurer or any other office bearer of the Managing Committee elected in accordance with Rule 43 of the Rules — Held, no. (Paras 4, 21)