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Hindurao Balwant Patil And Another v. Krishnarao Parshuram Patil And Others

Bombay High Court
Jul 7, 1981
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Judgment Summary (By: Dharmadhikari, J.)

Factual and Procedural Background

This summary is confined to the facts and procedural history as stated in the provided opinion.

Shree Dudhganga Vedganga Sahakari Sakhar Karkhana Limited (the Society) is a registered cooperative under the Maharashtra Co-operative Societies Act, 1960. The Society was declared a "specified society" under Section 73G of the Act in 1973 and its bye-laws were amended on 5-11-1976.

In April 1979 a board of directors was elected; petitioners Hindurao and Shankarrao (petitioners Nos. 1 and 2 in Writ Petition No. 1791 of 1981) were elected Chairman and Vice-Chairman respectively under the procedure prescribed by Chapter XIA of the Act.

On 19 May 1981 the Managing Director issued a notice to convene a board meeting on 27 May 1981 to consider a vote of no confidence against the Chairman and Vice-Chairman. Petitioner Shankarrao filed a dispute under Section 91 with the Regional Deputy Director of Sugar (Kolhapur) on 21 May 1981 challenging that notice; no interim order was made and on 27 May 1981 the board passed a resolution of no confidence by majority. The petitioners sought interim relief on 28 May 1981, which was rejected and the initial dispute was withdrawn.

Before a further meeting (noticed for 6 June 1981) a second dispute was filed with the Regional Director of Sugar (Pune) and referred to Co-operative Court No. 2. The Co-operative Court granted an ad interim injunction on 4 June 1981, and the Co-operative Appellate Court later granted an ex parte injunction restraining respondents from holding the meeting. The respondents then filed Writ Petition No. 1574 of 1981 in this Court and obtained an ex parte stay on 8 June 1981.

On 17 June 1981 this Court admitted Writ Petition No. 1791 of 1981 and issued rule nisi returnable on 3 July 1981. During admission both parties recorded in writing the legal question to be decided. The parties agreed that no fresh elections would be held while the petition was pending. The petitions were heard together and disposed of by this judgment.

Legal Issues Presented

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

Arguments of the Parties

Petitioners' (Chairman & Vice-Chairman) Arguments — (Dr. Naik / Shri Naik)

  • The managing committee and its office-bearers are constituted under Section 73G and the members hold office for five years under Section 73G(2); the term of the Chairman and Vice-Chairman is co-extensive with that period.
  • There is no provision in the Act, rules or the Society's bye-laws permitting the managing committee to pass a motion of no confidence against the Chairman or Vice-Chairman; the model bye-law provision (bye-law 34(d) in the model) was not approved by the Registrar for this Society.
  • Because the Registrar rejected the proposed bye-law amendment and that order was not challenged, the bye-laws (as approved) are binding and there is no power to remove the Chairman or Vice-Chairman by a board no-confidence resolution; accordingly the resolution dated 27 May 1981 is illegal and ultra vires and void ab initio.
  • Reliance was placed on several High Court decisions (including Lambha Mandali v. Dist. Registrar; Kanta Devi v. State of Rajasthan; Jahangir Bhikaji v. Corporation of City of Nagpur) to support the proposition that, absent express provision, there is no inherent or implied power to remove such office-bearers by a simple board vote of no confidence.

Contestants' / Respondents' Arguments — (Shri Paranjape)

  • Members possess constitutional rights to form associations and assemble (Arts. 19(1)(c) and 19(1)(b)), and as part of that right they should be able to discuss and pass resolutions, including votes of no confidence.
  • The term of office prescribed by statute is an "outer limit" only; the elected body may be removed earlier by the electorate if confidence is lost (relying on the principle in Manton v. Brighton Corporation and other cases).
  • The members who elect the Chairman and Vice-Chairman have an implied and inherent power to remove them; this follows from the nature of the electorate and is supported by Section 16 of the General Clauses Act (as argued).
  • Relying on decisions such as M/S Heckett Engineering Co. v. Their Workmen, Manton v. Brighton Corporation, and Damayanti Naranga v. Union of India, it was contended that an implied power or right to recall may exist.

State's Position — (Shri Sawant, Additional Government Pleader)

  • The State supported the petitioners' position (Shri Naik) that in absence of express statutory or bye-law provision to pass a vote of no confidence against the Chairman and Vice-Chairman, the board of directors had no such power and the impugned resolution was illegal and void.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Lambha Mandali v. Dist. Registrar, Co-op. Societies (1973) 14 Guj LR 786 Relied on by petitioners to support that absent statutory/bye-law provision there is no implied power to remove office-bearers by a no-confidence vote. Placed before the Court by petitioners as supporting authority for the proposition that removal power cannot be implied; used by Court as part of the body of authorities favoring that view.
Kanta Devi v. State of Rajasthan AIR 1957 Raj 134 Relied on by petitioners to support the proposition that Section 16 General Clauses Act does not apply to elective offices and no implied removal power exists. Cited by Court as consistent authority and noted alongside Jahangir Bhikaji in support of the Court's view that elective office is not governed by a general implied power of removal.
Jahangir Bhikaji v. Corporation of City of Nagpur 1960 Nag LJ 99 Relied on as precedent supporting the proposition that elective offices are controlled by statute and do not attract Section 16 General Clauses Act implied powers. Court referred to this decision as authoritative for not applying Section 16 to such elective offices; the Court considered it unnecessary to elaborate further in view of this decision.
M/S Heckett Engineering Co. v. Their Workmen, AIR 1977 SC 2257 Relied on by respondents in support of implied powers doctrine in some contexts (cited by Shri Paranjape). Court held that this decision was of little assistance for the present question, which concerns an elective office created and controlled by statute.
Manton v. Brighton Corporation (1957) 2 All ER 101 Cited for the proposition that a prescribed term can be an "outer limit" rather than an absolute bar to earlier removal. Court acknowledged the principle but stated that Section 73G also prescribes commencement and continuity provisions; therefore Manton did not dictate the outcome here.
Damayanti Naranga v. Union of India AIR 1971 SC 966 Cited by respondents for a broad reading of associative rights and consequences of statutory interference with association. Court distinguished this case on its facts (involuntary composition issues) and noted subsequent explanation by the Supreme Court in D.A. College. Jullunder v. State of Punjab.
Suraj Prakash v. State of Punjab AIR 1968 Delhi 30 Quoted for the legislative purpose of prescribing time limits for office-holders to prevent "power intoxication" and to secure democratic rotation. Court relied on the passage to support reasoning that statutory limits on tenure are deliberate democratic safeguards and to uphold the regulatory scheme of the Act.
D.A.V. College, Jullunder v. State of Punjab AIR 1971 SC 1737 Used to explain/ distinguish Damayanti Naranga and to show limits to the associative-rights argument. Court cited this decision to demonstrate that Damayanti was distinguishable and that statutory regulation of associations does not always violate Art. 19(1)(c).
Kamareddy Suryanarayana v. District Co-operative Officer AIR 1976 Andh Pra 340 (FB) Referenced among decisions addressing cooperative/associational regulation under statutory schemes. Listed by the Court as part of a body of relevant case law on cooperative societies and statutory regulation; no separate detailed application beyond being cited as context.
Peddanaickenpalayam Co-operative Agricultural Bank Ltd. v. Govt. of Tamil Nadu AIR 1979 Mad 241 Listed as relevant authority concerning cooperative/associational regulation. Included by the Court among supporting authorities illustrating approaches to cooperative statutes; no expanded application in the text.
Brij Gopal Denga v. State of Madhya Pradesh AIR 1979 Madh Pra 173 Listed as relevant authority. Included by the Court as part of the jurisprudential background regarding cooperative societies and statutory control; not separately analyzed in depth.
H. Puttappa v. State of Karnataka AIR 1978 Kant 148 (FB) Listed as relevant authority on related themes. Cited as part of the set of decisions addressing statutory regulation of associations and cooperative bodies; not further relied upon specifically in reasoning.
N. Venkatratnam Naidu v. District Collector, Nellore AIR 1972 Andh Pra 349 Previously held (per the opinion) that there is an inherent right to pass a vote of no confidence. Court noted this decision has been overruled by a larger Bench (N. Venkata Narayan) and therefore did not consider the earlier decision authoritative.
N. Venkata Narayan v. District Deputy Collector ILR (1975) Andh Pra 242 Larger Bench decision overruling N. Venkatratnam Naidu and rejecting the view of an inherent right to pass a vote of no confidence. Cited by the Court as having overruled the contrary earlier decision; the Court agreed with the larger Bench view.

Court's Reasoning and Analysis

The Court's analysis proceeds from statutory structure to the specific issue of implied powers:

  1. The Act is a regulatory enactment enacted to provide orderly development of the co-operative movement; it contemplates registration, bye-laws, and a statutory scheme governing rights and duties of societies and office-bearers.
  2. Section 73 vests management in a committee constituted in accordance with the Act, rules and bye-laws and provides that the committee "shall exercise such powers and perform such duties as may be conferred or imposed respectively by this Act, the rules and the bye-laws." The Court reads this as limiting the committee to powers expressly or necessarily conferred.
  3. Section 73G(2) prescribes that when all members are elected at the same time they shall hold office for five years from the date of the first meeting and continue until immediately before the first meeting of the new committee — a statutory term and continuity provision that grants security of tenure and sets an outer limit.
  4. The Society's bye-laws govern election procedure for Chairman and Vice-Chairman; the approved bye-laws do not contain a provision permitting the managing committee itself to pass a no-confidence motion specifically removing the Chairman or Vice-Chairman (the model bye-law provision was not approved by the Registrar for this Society).
  5. The Court emphasizes that rights to stand for election or to hold office in this statutory scheme are statutory creations (not common-law or general rights) and must be exercised and taken away only in the manner provided by the statute, rules or bye-laws. Therefore, a purported removal by a procedure not authorised by those sources cannot be sustained.
  6. The legislature has provided alternate, specific mechanisms for protection and removal: Registrar's powers under Section 78 (to remove committees or members for defaults or prejudicial acts), provisions in the Rules (Sections 144-E, 144-G) and bye-law provisions (bye-law 37, bye-law 34(c) allowing the general body to pass a vote of no confidence against the whole board). These demonstrate an intended, regulated scheme for removal and disqualification.
  7. The Court examined the respondents' constitutional argument (Art. 19(1)(c) and allied rights) and rejected it. The Court held that the fundamental rights to form associations and assemble do not negate legislative power to create, condition and regulate statutory rights such as election to a board; the right to contest/hold office under the Act is a statute-created right and subject to statutory conditions. Permissible legislative restrictions are part of the regulatory scheme and do not necessarily violate Art. 19.
  8. Judicial authorities cited by the parties were considered: the Court found that precedent supports the proposition that Section 16 of the General Clauses Act does not apply to elective offices controlled by statute (citing Jahangir Bhikaji and Kanta Devi), distinguished or found of limited assistance certain decisions relied on by the respondents (M/S Heckett Engineering; Damayanti Naranga), and adopted the view of larger benches that reject an inherent no-confidence power (noting N. Venkatratnam Naidu was overruled by N. Venkata Narayan).
  9. The Court concluded that, in the absence of an express statutory or bye-law provision empowering the managing committee to remove the Chairman or Vice-Chairman by a simple no-confidence motion, the committee had no such implied power and the resolution of 27 May 1981 was ultra vires and void.
  10. The Court acknowledged policy considerations: fixed tenure gives security to office-bearers and stability to management; unregulated removal at whim would harm effective administration of cooperative societies — thus the statutory and bye-law scheme of regulated removal is appropriate.

Holding and Implications

Holding:

The Court set aside the resolution of no confidence passed on 27 May 1981 as being ultra vires of the powers of the members of the Board. As a consequence, the petitioners (the Chairman and the Vice-Chairman) are entitled to continue in office for the unexpired period of their tenure, subject to the other provisions of the Act, the Rules and the bye-laws.

Case Disposition (procedural outcome):

  • Writ Petition No. 1791 of 1981: Allowed — the Rule made absolute.
  • Writ Petition No. 1574 of 1981: Dismissed — the Rule discharged.
  • Costs: No order as to costs in both writ petitions.

Implications:

The direct legal consequences are limited to the parties: the no-confidence resolution is quashed and the petitioners retain office for the remainder of their statutory term subject to statutory removal mechanisms. The Court emphasised that removal of office-bearers must follow the statutory and bye-law scheme and cannot be achieved by importing an unstated, uncontrolled doctrine of implied or inherent power. The judgment does not purport to create a new broad precedent beyond confirming that, within the statutory scheme of the Maharashtra Co-operative Societies Act and the approved bye-laws, no implied power to recall such elective office-bearers exists where the statute and bye-laws are silent or have provided alternate regulated procedures.

The summary above reflects only the matters and rulings contained in the provided opinion; no facts, arguments or holdings beyond the opinion text have been added.

Show all summary ...

Dharmadhikari, J.:— 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 as 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 petitioners 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 XIA of the Act. On 19th of May 1981 a notice was issued by the Managing Director of the Society to convene a meeting of the Board of Directors on 27th of May 1981 for passing a vote of no confidence against the Chairman and the Vice-Chairman. 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 not 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 itself 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 Directors 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 opponente 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 itself 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-Chairman. 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. Dr. Naik, learned Counsel appearing for the Chairman and the Vice-Chairman has contended before us that the Managing Committee is 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 viz, the Chairman and the Vice-Chairman of the Society have a right to continue in office till expiry of the said term of five years. According to Dr. Naik the bye-laws of the society provide for constitution of the managing committee, including as to how the election of the Chairman and the 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 the 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 the Act or the rules to enable the members of the board to pass a resolution of no confidence against the Chairman or 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 Naik further contended that in view of the provisions of Sec. 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/- 27th May 1981 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-op. Societies (1973) 14 Guj LR 786; Kanta Devi v. State of Rajasthan AIR 1957 Raj 134, Jahangir Bhikaji v. Corporation of City of Nagpur, 1960 Nag LJ 99. In substance it is the contention of Shri Naik 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 Article 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 occrupation, 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 Paranjpe 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 purposes of regulating any of these rights will have to be construed in the background 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 no 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 Paraniape 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 Art. 19. He also contended that all these provisions will 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 Chairman and the 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 confidence of the members of the 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 appointing authority of the Chairman and the Vice-Chairman and they have an inherent right to remove them on the basis of the principle incorporated in Sec. 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, AIR 1977 SC 2257: Manton v. Brighton Corporation, (1957) 2 All ER 101 and Damayanti v. Union of India, AIR 1971 SC 966.

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 had no power to pass such a resolution and, therefore, the impugned resolution is illegal and void.

6. For properly 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 legislature. This Act provides for registration of the Society by making a necessary provision in Chapter II. Sec. 6 of the Act provides for conditions of registration. An application for registration is contemplated by Sec. 8 and then Sec. 9 confers a power upon the Registrar to register the Society together with its bye-laws. 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 therefor. 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 committees, 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 laid down by or 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 or 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 member 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. XXVII 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 relevant 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 of 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 the Board of Directors will be entitled to elect Chairman and the Vice-Chairman from amongst themselves in the first meeting of the Board. Bye-law 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 provision 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-laws of the Society. It is neither disputed nor can it 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-Chairman have got inherent or implied power to remove them in case of loss of confidence. 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 Clauses Act, it is quite clear that Sec. 16 of the Act cannot apply to an elective office. Various provisions of the Act do not 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 the 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 itself. The petitioner has no fundamental right to elect Chairman or Vice-Chairman. That right is a creation of the Act itself. If the right itself 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 a 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 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 made by the society by framing necessary bye-laws. But in 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-laws 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 Suraj Prakash v. State of Punjab, AIR 1968 Delhi 30 (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 socic-econmic and moral movement. To say the least it is a part of the scheme of decentralisation 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 but 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 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 of Nagpur, 1960 Nag LJ 99. A similar view seems to have been taken by the Rajasthan High Court in Kanta Devi v. State of Rajasthan, AIR 1957 Raj 134.

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 an association and to elect the office-bearers has a component right to remove them in case of loss of confidence. 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 rights must be conferred by the statute and therefore can be enforced only in accordance with and subject to the conditions laid down therein by the statute concerned. The right guaranteed by Art. 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-laws on a member of the board of directors, a member has no further right or power. Board of directors is itself a creation of statute. An election held to the said board and the right conferred upon the member to elect office bearers is also a creation of the same statute. The statute has created a right and has also imposed restrictions. The Act, rules and the bye-laws do not confer any right upon the members of the Board of Directors to remove the Chairman and the Vice-Chairman 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 Eng. 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 term of 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, AIR 1977 SC 2257 is of little assistance while dealing with the question raised before us, which relates to the elective office created and controlled by the enactment itself.

12. Another decision upon which reliance is placed by Shri paranjape viz. Damayanti Naranga v. Union of India, AIR 1971 SC 966 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, AIR 1971 SC 1737. While distinguishing the said decision the Supreme Court has observed as under (at p. 1747):

“A reference has been made to recent case of Smt. Damayanti Naranga v. Union of India W.P No. 91 of 1964, D/- 23-2-1971 : (AIR 1971 SC 966) that a compulsory affiliation by statute 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 Sammelan 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 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 interfers with the composition of the Society in constituting the sammelan 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, AIR 1976 Andh Pra 340 (FB), Peddanaickenpalayam Co-operative Agricultural Bank Ltd. v. Govt. of Tamil Nadu, AIR 1979 Mad 241; Brij Gopal Denga v. State of Madhya Pradesh, AIR 1979 Madh Pra 173 and H. Puttappa v. State of Karnataka. AIR 1978 Kant 148 (FB).

13. The posts of Chairman and Vice Chairman are creation of the statute. 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 or self-discipline adopted by the Society. Therefore, it cannot be said that only because the members themselvss 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 regulartory 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, AIR 1972 Andh Pra 349 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) Andh Pra 242 and in our 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 subject to fulfilment of certain conditions including framing of the bye-laws. After registration such a 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 the whims of members of the board, then instead of managing the society and its affairs, 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 framing 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 the removal of the members, which are sufficient to protect the society from mismanagement etc.

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. If 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 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 resoltuion of vote of no confidence. In the result, therefore, the resolution of no confidence passed against the petitioners is set aside, if 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 the 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.

20. In the result, therefore, writ petition No. 1791 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. 1574 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 order as to costs in both these writ petitions.

Order accordingly.