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S. Lakshmanan, Presi... v. V. Velliankeri Membe...

Kerala High Court
Apr 9, 2002
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Full Bench Reference — Kerala Co-operative Societies Act, 1969: No-Confidence Motions

Factual and Procedural Background

This Full Bench reference arises from an order dated 21 March 2000 made by a Division Bench of this Court (Arijit Pasayat, C.J. and K.S. Radhakrishnan, J.), which referred the following question of law for decision:

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

The opinion sets out the statutory background: Section 28 (Appointment/constitution of Committee) and Section 33(1) (appointment of new Committee or Administrator when a no-confidence motion is passed by the general body) of the Kerala Co-operative Societies Act, 1969; Rule 43 of the Kerala Co-operative Societies Rules, 1969 (election of office-bearers by the Committee); and other relevant rules (notably Rules 35, 38, 39, 161, 176). The counsel for both sides conceded that there is no express provision in the Act, the Rules or the Bye-laws prescribing a procedure for a Managing Committee to pass a no-confidence motion against its President or other office-bearers, nor prescribing the consequences of such a motion.

Legal Issues Presented

  1. Whether the absence of a specific provision in the Kerala Co-operative Societies Act, 1969, the Rules framed thereunder, or the Bye-laws prevents the Managing Committee of a co-operative society from moving or considering a motion for loss of confidence in the President, Vice-President, Treasurer or any other office-bearer elected under Rule 43.
  2. Whether any implied power (including by reference to Section 16 of the General Clauses Act and the corresponding local provision) or reference in Section 31(3) to a "no-confidence motion" suffices to authorize the Managing Committee to pass such a motion against an individual office-bearer.

Arguments of the Parties

Appellants' Arguments

  • The right to express no-confidence in an elected officer is inherent in representative democratic governance and applies to co-operative societies; it need not be expressly enacted.
  • Even if a statutory provision were enacted, it would only regulate a power that is inherently vested in the electorate in a participative democracy.
  • Reliance on Section 16 of the General Clauses Act and Section 15 of the Kerala Interpretation and General Clauses Act: where a statute confers power to make an appointment, unless a contrary intention appears, the appointing authority also has power to suspend or dismiss the appointee.
  • Analogy with constitutional conventions: collective responsibility (Articles 74, 75(3), 163, 164(2)) supports reading a no-confidence mechanism into the co-operative context; the Managing Committee is analogous to the Council of Ministers and is collectively responsible to the General Body.
  • Section 31(3) (which bars nominated persons from participating in no-confidence motions) and other Rules (e.g., Rule 161 applicable to co-operative unions) indicate legislative awareness of no-confidence motions; therefore, a Managing Committee could pass a resolution of no-confidence as an ordinary resolution and Registrar oversight (Rule 176) can check misuse.

Respondents' Arguments

  • Passing a no-confidence resolution against an office-bearer is a matter of major consequence and cannot be read in as an implied power; co-operative societies are statutory creations and must act within the statute and rules.
  • Where the statute specifically recognizes a no-confidence procedure (e.g., Section 33(1) for removal of entire Committee, Rule 161 for Chairman of a Co-operative Union), that is the means intended by the Legislature; no analogous provision exists for removal of individual office-bearers in primary societies.
  • Section 28's title ("Appointment of Committee") and its text ("constitute") do not permit importing an implied power under Section 16 General Clauses Act; "appointment" in the context of elective offices is not apt.
  • Rule 39 fixes term of the Committee; members are entitled to hold office for full term unless removed by procedures prescribed by statute, Rules or Bye-laws; Rule 38 addresses casual vacancies but contemplates resignation or filling vacancies, not removal by no-confidence.
  • Allowing easy recall by no-confidence would lead to instability and paralysis of society functioning; implication that power to recall is not inherent in the electorate absent statutory provision.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Veeramachaneni Venkata Narayana v. The Deputy Registrar of Co-operative Societies, Eluru (ILR (1975) Andh Pra 242) Held there was no implied power in the Committee to move a no-confidence motion against the President; removal on that ground was illegal. The Full Bench treated this decision as authoritative for the proposition that no implied power exists to remove an individual office-bearer by a Committee resolution and relied upon and approved this view.
Narayanan Nair v. Joint Registrar (1982 Ker LT 602; AIR 1983 Kerala 136) Observed Rule 43 does not provide for removal by no-confidence; noted s.31(3) indicates legislative awareness of no-confidence motions; decision dismissed on locus standi. Cited as a single-judge view that suggested possible legislative receptivity to no-confidence motions but the Full Bench found its reasoning inconsistent with the statute and disagreed with its conclusions.
N. Venkataratnam v. District Collector, Nellore (AIR 1972 Andh Pra 349) Earlier decision relied upon for the proposition supporting implied power. Noted that this decision was specifically considered and overruled by the Andhra Pradesh Division Bench in Veeramachaneni; the Full Bench treated it as not authoritative for the present question.
Gregory v. Secretary, Manimala Service Co-operative Bank Ltd. (1990) 1 Ker LT 374 Single Judge held that if a Managing Committee could elect a President, it could undo that action and cancel the appointment; relied on local interpretation statutes. The Full Bench found such single-judge views inconsistent with the statutory scheme and overruled them insofar as they conflict with this Full Bench's conclusion.
Velliankeri v. General Manager (2000 (1) Ker LT 319) Followed Gregory; held a no-confidence motion could be discussed in primary society meetings, relying on s.31(3). The Full Bench identified this as part of the line of single-judge authorities inconsistent with the proper construction of the Act and Rules and disapproved that approach.
Oriental Insurance Co. Ltd. v. Hansrajbhai V. Kodala ((2001) 5 SCC 175 : AIR 2001 SC 1832) Principle that the title of a section cannot override or alter the plain meaning of the words contained in the section. Respondents cited this decision to support the argument that the title "Appointment" in Section 28 cannot be used to change the statutory text; the Full Bench accepted the relevance of the principle in construing the Act.
Maruthi Wires Industries Pvt. Ltd. v. S.T.O., 1st Circle, Mattancherry ((2001) 3 SCC 735 : AIR 2001 SC 1413) Reinforces canon that courts must not add to or take from a statute unless clearly intended by Legislature; supports doctrine of casus omissus. The Full Bench invoked the same canon and the doctrine of casus omissus to reject reading an implied power into the Act.
Chacko v. Jaya Varma (1999 (3) Ker LT 680) Division Bench of this Court held that in absence of provision in Act and Rules the President cannot be removed by a no-confidence motion. The Full Bench agreed with and followed this Division Bench decision and held it correctly lays down the law; it overruled contrary single-judge decisions.
Bar Council Of Delhi v. Bar Council Of India (AIR 1975 Delhi 200) Considered in context of applicability of general clauses provisions to particular offices. Referenced (via Chacko) on the point that Section 16 of the General Clauses Act may not apply to elected office-bearers; used to support the Full Bench's construction.
Foster v. Foster (1916 (1) Ch D. 532) English company-law authority where board could appoint and replace Managing Director under articles. The Full Bench found Foster distinguishable and not applicable because office-bearers under the Act are elected under statutory procedure and cannot be removed by implied board power as in Foster.
Hindurao v. Krishnarao (AIR 1982 Bom 216) Bombay High Court held tenure fixed by statute cannot be cut short by implied power; emphasized special nature of rights arising under election laws and need for specific statutory provision for removal. The Full Bench expressly agreed with and followed Hindurao, adopting its reasons on why an implied power to remove office-bearers should not be read into the statute.
Jagdev Singh v. Registrar, Co-operative Societies, Haryana (AIR 1991 Punj & Har 149) Full Bench of Punjab & Haryana HC followed Hindurao; held no power under Act/Rules/Bye-laws for removal of office-bearers by vote of no-confidence by Committee where tenure fixed by Bye-laws. The Full Bench relied on Jagdev Singh as further authority supporting the proposition that individual office-bearers cannot be removed by a Committee no-confidence motion in the absence of express provision.

Court's Reasoning and Analysis

The Full Bench proceeded by detailed statutory construction and review of precedents. The principal steps in the Court's reasoning, as reflected in the opinion, are:

  1. Statutory framework: The Court noted that the Committee is constituted under Section 28 by the general body in accordance with the Bye-laws and that Section 33(1) expressly contemplates removal of a Committee by a no-confidence motion passed by the General Body. Rule 43 provides for election of office-bearers by the Committee. The parties conceded there is no express provision permitting the Managing Committee to remove an individual office-bearer by passing a no-confidence motion.
  2. Examination of the competing doctrines: The Court analysed two main bases relied upon by single-judge authorities that supported a Committee's power to move a no-confidence motion against an office-bearer: (a) an implied power under general clauses provisions (Section 16 of the General Clauses Act and its local counterpart) that an appointing authority can revoke appointments; and (b) the reference to a "no-confidence motion" in Section 31(3) which, it was argued, signalled legislative recognition of such motions in co-operative contexts.
  3. Rejection of implied power argument: The Full Bench held that the doctrine of casus omissus applies. The Committee and its office-bearers are elected following prescribed statutory procedures and their tenure is guaranteed by Rule 39(1) and the Bye-laws. Where the Legislature has prescribed particular removal procedures (e.g., removal of the entire Committee under Section 33(1), or Rule 161 in the context of unions), it is not open to the Court to read in an implied power to remove individual office-bearers by Committee resolution.
  4. Analysis of authorities: The Court reviewed multiple High Court decisions and concluded that single-judge decisions allowing implied removal powers were inconsistent with the statutory scheme and the underlying policy of co-operative legislation. The Court found more persuasive the Division Bench and Full Bench decisions (e.g., Veeramachaneni, Hindurao, Jagdev Singh, Chacko) that held an implied power could not cut short a fixed statutory tenure.
  5. Role of legislative texts and canons: The Full Bench relied upon the classic canons of construction (as cited from Maxwell's Interpretation and decisions such as Maruthi Wires) that courts should not read into statutes matters omitted by the Legislature unless clearly intended. It also accepted that the title of a section cannot override the statutory text (citing Oriental Insurance Co. Ltd. v. Hansrajbhai V. Kodala) and distinguished authorities (e.g., Foster v. Foster) that were inapposite because in those cases appointments were made under instruments (articles) that expressly conferred appointment and revocation powers.
  6. Policy considerations: The Court accepted the practical concerns expressed by other High Courts that allowing unfettered removal of office-bearers by Committee resolutions would destabilize management and frustrate the object of fixed tenure for effective administration of societies.
  7. Conclusion of analysis: On this combined textual and purposive analysis, the Court concluded there is no justification—statutory or jurisprudential—for reading into the Act and Rules an implied power allowing a Managing Committee to move or consider a no-confidence motion against individually elected office-bearers.

Holding and Implications

Holding:

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 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.

Implications:

  • Direct effect on the parties: A Managing Committee may not, by itself, pass or consider a no-confidence motion to remove an individually elected office-bearer (President, Vice-President, Treasurer or any other office-bearer elected under Rule 43) where there is no express statutory, Rules-based or Bye-law provision authorizing such removal.
  • Precedential effect: The Full Bench held that the Division Bench decision in Chacko v. Jaya Varma correctly states the law, and it expressly overruled earlier contrary single-judge decisions that had read an implied power of removal into the statute. Thus, contrary authorities were disapproved.
  • Operational consequence: Removal of an elected office-bearer can only be effected by a method expressly provided in the Act, the Rules or the Bye-laws; the only express statutory contingency for premature removal of the Committee as a whole is Section 33(1) (no-confidence motion by the General Body). The opinion underscores that the Registrar's powers (e.g., under Rule 176) remain a separate supervisory mechanism but do not constitute a power permitting Committee-initiated no-confidence removals.
  • Further proceedings: The Full Bench ordered that the appeal be placed before the concerned Division Bench for disposal in accordance with law (procedural direction contained in the opinion).

Order accordingly.

Show all summary ...

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 thereunder 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 Act”) is titled “Appointment of Committee” and provides that the general body of a society shall constitute a Committee, for a period not exceeding five years, in accordance with the Bye-laws and entrust the management of the affairs of the society to such Committee. Section 33(1) of the Act contemplates 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 office of the office-bearers of the committee. The counsel on both sides concede that there is no provision in the Act or the Rules made thereunder 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 officebearer, nor is there any provision indicating the consequences 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. Emphasising 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 counterpart 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 the Act plays 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 officebearer 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 Act. 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 the Act deals with the power of the State Government to make rules for carrying out the provisions of the Act. 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 Act, 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 form of a 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 Act, 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 thereunder. It is urged that where the statute wanted to recognise and prescribe a procedure for a no-confidence motion, it has dealt with it specifically. Such recognition is available under Section 33(1) of the Act which 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 Act, 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 Act, 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 Act. 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 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 Veeramachaneni Venkata Narayana v. The Deputy Registrar of Co-operative Societies, Eluru, West Godavari District, ILR (1975) Andh Pra 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 Ker LT 602: (AIR 1983 Kerala 136), 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 sub-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 Act 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 Andh Pra 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 (ILR (1975) Andh Pra 242) (supra) by a Division Bench of Andhra Pradesh High Court, which held that it was not the function of the Court to supply a ‘casus omissus’.

13. In Gregory v. Secretary, Manimala Service Co-operative Bank Ltd., (1990) 1 Ker LT 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 cancelling the appointment in appropriate proceedings. It is well within their purview to undo an act done by them, which stands recognised 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 (AIR 1983 Kerala 136) (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) Ker LT 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 the Act that 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 Act 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 : (AIR 2001 SC 1832), 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 Judges in all these matters is neither consistent with the philosophy underlying the Act, nor borne out by any express provision in the Act 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 Act 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 the Act to a no-confidence motion, which indicates that there could be 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 Act 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 Act 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 Act. Section 33(1) of the Act envisages 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 Act, 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 nothing 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 Act 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 : (AIR 2001 SC 1413).

17. A Division Bench of this Court in Chacko v. Jaya Varma, (1999) 3 Ker LT 680 considered the same question. After a review of the earlier judgments in Narayanan Nair (AIR 1983 Kerala 136) (supra), N. Venkataratnam (AIR 1972 Andh Pra 349) (supra), Gregory (1990 (1) Ker LT 374) (supra), as well as the judgments of the Bombay High Court in Hindurao v. Krishnarao, AIR 1982 Bom 216, and the Full Bench judgment of the Punjab and Haryana High Court in Jagdev Singh v. Registrar, Co-operative Societies, Haryana, AIR 1991 Punj & Har 149, the Division Bench held that, in the absence of a provision in the Act 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 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…Petitioner v. Bar Council Of India…, AIR 1975 Delhi 200, and approved of the view taken by the Division Bench in Veeramachaneni Venkata Narayana (ILR (1975) Andh Pra 242) (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) Ch D. 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 (ILR (1975) Andh, Pra 242) (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 case (sic — Venkataratnam) case — AIR 1972 Andh Pra 349, relied upon the case of Foster v. Foster (1916) 1 Ch. D. 532. 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 Act, 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 Act and the Rules”.

We respectfully agree with this view.

19. In Hindurao (AIR 1982 Bom 216) (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 election 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 Act, 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 (AIR 1982 Bom 216) (supra) (Para 9):

“It cannot be forgotten that the Co-operative Societies Act has been enacted having regard to the directive principles of the State policy as enshrined in the Constitution of India. Co-operative movement is a socio-economic and moral movement. To say the least, it is a part of the scheme of decentralisation and 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, cooperation 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.”

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 Act, Rules or the Bye-laws. Power to recall is not inherent in the electorate. Therefore, in the absence of such a power it was not open to the members of the Board of Directors to remove the Chairman or the Vice-Chairman by passing a mere resolution of vote of no-confidence. In the result, therefore, the resolution of no-confidence passed against the petitioners is set aside, it being ultra vires of the 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 Act, 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 (AIR 1982 Bom 216) (supra) was followed by a Full Bench of the Punjab and Haryana High Court in Jagdev Singh (AIR 1991 Punj & Har 149) (supra). The Full Bench also approved of the view taken by the Andhra Pradesh High Court in Veeramachaneni Venkata Narayana (ILR (1975) Andh Pra 242) (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 Act, 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 (1999 (3) Ker LT 680) (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 thereunder 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 concerned Division Bench for disposal in accordance with law.

Order accordingly.