Karnataka High Court
Ashok S/O Meenaji Rao Gayakawad vs The Registrar Of Co-Op Societies & Ors on 20 September, 2017
Author: G.Narendar
Bench: G.Narendar
1
IN THE HIGH COURT OF KARNATAKA
KALABURAGI BENCH
DATED THIS THE 20TH DAY OF SEPTEMBER 2017
BEFORE:
THE HON'BLE MR.JUSTICE G.NARENDAR
WRIT PETITION No.202390/2017 (CS-EL/M)
BETWEEN
ASHOK,
S/O MEENAJI RAO GAYAKAWAD,
AGED ABOUT 63 YEARS,
OCC ADVOCATE/PRESIDENT,
PRIMARY CO-OPERATIVE AGRICULTURAL
& RURAL DEVELOPMENT BANK LTD.,
SINDGI,
R/O NO.830, ASHOK CHOWK,
NEAR GANESH MANDIR,
SINDGI-586 128,
DIST. VIJAYAPURA. ... PETITIONER
(BY SRI. SUBRAHMANY JOIS, SENIOR COUNSEL
FOR sri. G G CHAGASHETTI, ADV.)
AND
1. THE REGISTRAR OF CO-OP. SOCIETIES,
ALIASKER ROAD,
BANGALORE-560001.
2. DEPUTY REGISTRAR OF
CO-OP SOCIETIES,
OPP. AMBEDKAR CIRCLE,
VIJAYAPURA-586101.
2
3. THE ASST. REGISTRAR OF
CO-OP. SOCIETIES,
INDI SUB DIVISION,
INDI, DIST. VIJAYAPURA-586101.
4. THE PRIMARY CO-OPERATIVE
AGRICULTURAL & RURAL
DEVELOPMENT BANK LTD.,
SINDGI-586101,
DIST. VIJAYAPURA,
REPTD. BY ITS MANAGER.
5. SMT. SRIDEVI RAMACHANDRA PATIL,
AGE: MAJOR, OCC: DIRECTOR,
PICARD BANK LTD.,
SINDGI, DIST. VIJAYAPURA,
R/O KALAHALLI,
TQ. SINDGI, DIST. VIJAYAPURA-586101.
6. DHAREPPA SADASHIVAPPA KANTIGOND,
AGE MAJOR, OCC: DIRECTOR,
PICARD BANK LTD.,
SINDGI, DIST. VIJAYAPURA,
R/O CHANDAKAVATE,
TQ. SINDGI, DIST. VIJAYAPURA-586101.
7. CHANDRASHEKAR MALLESHAPPA DEVAREDDY,
AGE MAJOR, OCC: DIRECTOR,
PICARD BANK LTD., SINDGI,
R/O OTHIHAL, TQ. SINDGI,
DIST. VIJAYAPURA-586101.
8. JAGADISH SHIVAPPA PATIL,
AGE: MAJOR, OCC; DIRECTOR,
PICARD BANK LTD., SINDGI,
R/O MADHARI, TQ. SINDGI,
DIST. VIJAYPURA-586101.
9. SHIVAYOGEPPA,
S/O SANGANABASAPPA HATTI,
AGE: MAJOR, DIRECTOR,
PICARD BANK LTD., SINDGI,
3
R/O GOLAGERI, TQ. SINDGI,
DIST. VIJAYAPURA-586101.
10. HANAMAGOUDA BHIMANAGOUDA BIRADAR,
AGE: MAJOR, OCC: DIRECTOR,
PICARD BANK LTD., SINDGI,
R/O ASKI, TQ. SINDGI,
DIST. VIJAYAPURA-586101.
11. BHIMA SINGH LAKMU NAIK,
AGE: MAJOR, OCC: DIRECTOR,
PICARD BANK LTD., SINDGI,
R/O KORWAR, TQ. SINDGI,
DIST. VIJAYPURA-586101.
12. MAHADEV BHIMSHYA NAIK,
AGE: MAJOR, OCC: DIRECTOR,
PICARD BANK LTD., SINDGI,
R/O HITTNAHALLI L.T,
TQ. SINDGI, DIST. VIJAYPURA-586101.
13. SMT. THANA BAI,
W/O VITOBHA MOORCHAVAR,
OCC: DIRECTOR,
PICARD BANK LTD.,
SINDGI,
R/O BOMMANAHALLI,
TQ. SINDGI,
DIST. VIJAYPURA-586101. ... RESPONDENTS
(BY SRI. SYED HABEEB, AGA FOR R-1 TO R-3.
SRI. SANGANABASAVA B PATIL, ADV. FOR R4,
SRI. BASAVARAJ KAREDDY, ADV. FOR R-5 TO R-8,
R-10 & R-13,
SRI. H R MALIPATIL, ADV. FOR C/R9.)
***
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227
OF THE CONSTITUTION OF INDIA, PRAYING TO ISSUE A WRIT OF
CERTIORARI AND TO QUASH THE IMPUGNED NOTICE
4
DT.25.05.2017 ISSUED BY THE 4TH RESPONDENT IN NO. PICARD
BANK/AA.MA.SA/29/2017-18 PRODUCED AT ANNEXURE-H.
THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED
FOR ORDERS, THIS DAY THE COURT PRONOUNCED THE
FOLLOWING:
DATE OF RESERVING THE ORDER : 13.07.2017
DATE OF PRONOUNCING THE ORDER : 20.09.2017
ORDER
Heard the learned Senior Counsel for the petitioner, learned Additional Government Advocate for respondent Nos.1 to 3, learned counsel for respondent No.4 and the learned counsel for respondent Nos.5 to 13.
2. The petitioner is before this Court seeking for the following relief:
"Issue a writ of certiorari and to quash the impugned notice dated 25.05.2017 issued by the 4th respondent in No.PICARD Bank/Aa.Ma.Sa/29/2017-18."5
3. Though the writ petition was listed for preliminary hearing, as the petition lies in a narrow compass, with the consent of the parties and the learned counsel, the petition was taken-up for final disposal.
4. The brief facts necessary for the disposal of this petition is as follows:
The 4th respondent is a Primary Co-operative Agricultural and Rural Development Bank Limited, established under the provisions of the Karnataka Co-
operative Societies Act, 1959. That the board of the 4th respondent Bank consists of 13 directors, including a nominee of the State Government. That the election to the Board of Directors of the Bank was held on 15.02.2015.
That 11 directors were elected from the borrower's constituency, one member was elected from the non-
borrower's constituency and one member came to be nominated by the State Government. That in all 13 members came to constitute the Board of Directors.6
The petitioner came to be elected as the President of the Board. That respondent Nos.5 to 13 including the Vice-President of the 4th respondent Bank addressed a letter to the Secretary of the 4th respondent Bank requesting him to call for a Special Meeting of the Board vide letter dated 20.05.2017. Pursuant to the request, the 2nd respondent vide letter dated 22.05.2017 has in turn addressed a letter to the Managing Director, directing him to call for a meeting and to submit a report.
That the 3rd respondent on receipt of the no confidence motion moved by respondent Nos.5 to 13, addressed a letter to the Managing Director of the Bank to hold an election to fill-up one post of the director, which was vacant due to the passing away of one of the directors.
In view of the above development, the Secretary of the 4th respondent Bank issued a meeting notice, calling for a Special Meeting of the Board of Directors on 09.06.2017.
The said meeting notice dated 25.05.2017 is the subject matter of the present writ petition.7
5. The contentious provisions of Section 29H of the Karnataka Co-operative Societies Act, 1959 [hereinafter referred to as "the Act" for short] came to be introduced vide Karnataka Act No.19 of 2016, which is reproduced hereunder for the sake of convenience:
"29H. Motion of no-confidence against office-bearer.-(1) A motion of no confidence against an office bearer may be moved only after two years of his assumption of office. In case, the motion of no confidence is once defeated, a fresh motion shall not be introduced within one year thereafter. No motion of no confidence shall be moved unless there is a request from not less than one-third of the elected members of the board of a Co-operative Society concerned.
2) An office bearer of a Co-operative Society shall be deemed to have vacated his office forthwith if a resolution expressing want of confidence in him is passed by a majority of two third of the total number of elected directors of a Co-operative Society at a meeting specially convened for the purpose.8
(3) The procedure for no confidence motion shall be as prescribed."
6. The learned Senior Counsel would contend that the no confidence motion moved by respondent Nos.5 to 13 is illegal and contrary to the provisions of Section 29H of the Act, which came to be inserted vide Amendment Act. He would contend that no confidence motion cannot be introduced within the passage of two years from the date of coming into force of the provision and the amendment came to be inserted into the Act only in the year 2016 and it has no retrospective operation. That the publication in the Karnataka Gazette Extra-ordinary is carried out on 27.07.2016 and hence the notice calling for a Special Meeting to consider the no confidence motion is per se illegal and calls for intervention on that short ground alone. He would contend that the said provision came to be introduced into the Act, in pursuance of the 97th Constitutional Amendment, which came into force from 12.01.2012 and would draw the attention of this Court to Article 243ZH of the Constitution.
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7. Learned Senior Counsel would further draw the attention of this Court to sub-Section (3) of Section 29H of the Karnataka Co-operative Societies (Amended Act), 2016 which stipulates that the procedure shall be prescribed for moving the no confidence motion. He would contend that it is an undisputed fact that till date, the State Government has not prescribed any procedure nor framed any rules and hence in the absence of prescribed procedure and framing of appropriate rules, the 4th respondent erred in entertaining the request for convening a Special Meeting of the Board and drawing up of an agenda regarding no confidence motion moved by respondent Nos.5 to 13. He would also draw the attention of the Court to the byelaws of the 4th respondent Bank and would contend that even the byelaws do not provide for passing of no confidence motion.
8. Apart from the above legal contention, learned Senior Counsel would contend that the petitioner was single handedly responsible for taking the Bank from out of the red. He would contend that when the petitioner took 10 charge as the President, the Bank had suffered losses to the tune of Rs.7 to 8 crores. That the petitioner despite the losses suffered, got waived the farmers' loans totaling Rs.90 lakhs, which were granted for digging wells and he was able to convince the State Government to waive the said loans. That the petitioner initiated bold steps for recovery of loans and within a short period the 4th respondent Bank was declared as "A" Grade Bank for the first time in its history and that the good deeds and effective management by the petitioner have even been acclaimed by the media.
9. It is further contended that the no confidence motion is motivated and at the instance of respondent Nos.5 to 13. That in the course of his discharge of duties, he came across startling facts. One of them being that, the respondent Nos.5 to 13, who had availed loans for themselves and their relatives, had failed to purchase shares of the Bank and to keep certain portion in fixed deposit, which he states, is one of the Bank norms for sanction of the loans. Upon coming to know of the said 11 violation, he directed the Secretary of the Bank to make out a list of all such members, who had availed loans without purchasing the shares or keeping amounts in fixed deposit. The learned Senior Counsel would draw the attention of this Court to Annexure-"D", which is a copy of the list of borrowers, who have not purchased shares of the Bank and the borrowers, who have not deposited the sums in fixed deposit contrary to the lending norms of the Bank. That on receipt of the same, he directed the Secretary of the Bank to initiate action to ensure compliance with the byelaws and norms of the Bank, regarding disbursement of the loans.
10. It is further contended that some of the respondents, who were not regular to the meetings, but would thereafter pressurize the Bank officials to bring over meeting books to their residences and signed the same. Upon coming to know about the same, the petitioner got issued a memo to the Secretary and his Assistant on 19.05.2015. Agitated by the actions of the petitioner, respondent Nos.5 to 13 started manipulating the board 12 meetings and raising obstacles for the smooth functioning of the Bank. They ensured that there would not be a quorum for the meetings, leading to cancellation of the meeting. Realizing the effect it was having on the smooth functioning of the Bank, the petitioner brought it to the notice of the 2nd respondent vide letter dated 05.05.2016. Apart from the above facts, the petitioner also brought on record the other misdemeanors committed by the Bank staff and directors. That the 2nd respondent on receipt of the same, addressed a letter on 07.05.2016 to the Co- operative Development Officer, Sindgi to conduct an enquiry and submit a report within 3 days. The copy of the same is placed on record as Annexure-"F" to the writ petition.
11. He would further submit that the relatives of respondent Nos.5 to 13, who had availed the Bank loans had omitted to re-pay the same and were defaulters from 1996. Learned Senior Counsel would further submit that the 7th respondent during his term as the President of the 4th respondent Bank had executed Lease Deed favouring in 13 his son-in-law in respect of the Bank property bearing No.1486, measuring east to West 13½ ft. and north to south 35 ft. on a meagre monthly rent of Rs.200-00. That the lease was for a period of 50 years. Upon noticing the said illegality, the petitioner got issued a notice to the son- in-law of the 7th respondent, calling upon him to pay a monthly rent of Rs.7,000-00. It is stated that the said lessee had defaulted in payment of even the meagre lease amount of Rs.200-00 and was a defaulter for the last 3 years. As the lessee failed to honour the demand, the petitioner got instituted a suit in O.S. No.284/2016.
12. Learned Senior Counsel would submit that respondent Nos.5 to 13 outraged by the proactive measures initiated by the petitioner to cleanse and rid the Bank of its liabilities have initiated the no confidence motion and he would submit that the no confidence motion being motivated by mala fides is unsustainable in law and this Court ought to interfere to ensure survival of the Bank.
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13. Per contra, learned counsel for respondent Nos.5 to 13 would contend that respondent Nos.5 to 13 have every right to move the no confidence motion and arguments to the contrary cannot be countenanced. He would submit that out of the elected members, one director is dead and as on today there are only 11 elected directors including the petitioner. He would contend that out of 11 remaining members of the board, 9 members have expressed no confidence against the petitioner and asked the Secretary of the 4th respondent Bank to call for a Special Meeting vide request dated 17.05.2017 and that the Secretary acting in compliance with the provisions of law has got issued the meeting notice on 25.05.2017 convening the meeting on 09.06.2017.
14. He would submit that the allegations made by the petitioner against these respondents are all baseless and he would state that the mere fact, that 9 out of 11 members have joined hands to oust the petitioner is sufficient proof of the autocratic behavior and he would contend that the motion is moved, being fed up with the 15 dictatorial attitude and autocratic manner of functioning of the petitioner. He would contend that the assertion of the petitioner that he has single handedly improved the conditions of the Bank are all false. He would state that the Bank works through the board. All functions of the Bank are administered by the board and the petitioner was able to achieve results because of the co-operation by the members. But, the petitioner by taking the co-operation of the members as a weakness had attempted to trample upon their rights, though they are democratically elected members of the board. He would contend that respondent Nos.5 to 13 were constrained to initiate no confidence motion to ensure smooth functioning of the Bank as per democratic principles.
15. He would contend that the answer to the issue raised by the learned Senior Counsel, that no, no- confidence motion can be moved in the absence of an express provision stipulating such procedure and framing of rules, lies in the very objective behind creation of the co- operative sector.
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16. He would contend that the right to form a Co- operative Society is a fundamental right envisaged under Article 19 of the Constitution. Learned Counsel enlarging the said contention would submit that pursuant to 97th Amendment, Article 43B of the Constitution came to be inserted into the directive principles of State policy, thereby providing for promotion of the co-operation movement by the State. That the constitutional amendment also introduced the new, Part IX-B on co- operative societies and the New Part wholly deals with the co-operative sector only. He would draw the attention of the Court to the reasons for the said amendment, which reads as follows:
"Part IV-B The Co-Operative Societies Statement of Objects and Reasons The Co-operative sector, over the years, has made significant contribution to various sectors of national economy and has achieved voluminous growth. However, it has 17 shown weaknesses in safeguarding the interests of the members and fulfillment of objects for which these institutions were organized. There have been instances where elections have been postponed indefinitely and nominated office bearers or administrators remaining in-charge of these institutions for a long time. This reduces the accountability of the management of co- operative societies to their members. Inadequate professionalism in management in many of the co-operative institutions has led to poor services and low productivity. Co- operatives need to run on well established democratic principles and elections held on time and in a free and fair manner.
Therefore, there is a need to initiate fundamental reforms to revitalize these institutions in order to ensure their contribution in the economic development of the country and to serve the interests of members and public at large and also to ensure their autonomy, democratic functioning and professional management.
The Central Government is committed to ensure that the co-operative societies in 18 the country function in a democratic, professional, autonomous and economically sound manner. With a view to bring the necessary reforms, it is proposed to incorporate a new Part in the Constitution so as to provide for certain provisions covering the vital aspects of working of co-operative societies like democratic, autonomous and professional functioning. A new article is also proposed to be inserted in Part IV of the Constitution (Directive Principles of State Policy) for the States to endeavour to promote voluntary formation, autonomous functioning, democratic control and professional management of co-operative societies. The proposed new Part in the Constitution, inter alia, seeks to empower the Parliament in respect of multi-State co- operative societies and the State Legislatures in case of other co-operative societies to make appropriate law.
It is expected that these provisions will not only ensure the autonomous and democratic functioning of co-operatives, but also ensure the accountability of management to the members and other stakeholders and shall 19 provide for deterrence for violation of the provisions of the law."
17. Advancing and enlarging upon the said contentions, he would submit that all bye-laws of the Societies were required to be restructured in consonance with the 97th amendment. He would contend that one of the objectives of the State is that it would endeavour to promote voluntary formation of the Society, ensuring autonomous functioning, democratic control and professional management of co-operative societies. He would submit that the manner and method of functioning of the petitioner was wholly contrary to the democratic norms and taking advantage of his professional status, the petitioner attempted to bulldoze the rights of the other members of the board. He would place reliance on the law laid-down by the Hon'ble Apex Court in the case of Bhanumati and others Vs. State of Uttar Pradesh through its Principal Secretary and others; reported in (2010)12 SCC 1 and would draw the attention of this court to paras 58 and 66, which reads as under:
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"58. These institutions must run on democratic principles. In democracy all persons heading public bodies can continue provided they enjoy the confidence of the persons who comprise such bodies. This is the essence of democratic republicanism. This explains why this provision of no- confidence motion was there in the Act of 1961 even prior to the Seventy-third Constitution Amendment and has been continued even thereafter. Similar provisions are there in different States in India.
66. Democracy demands accountability and transparency in the activities of the Chairperson especially in view of the important functions entrusted with the Chairperson in the running of Panchayati Raj institutions. Such duties can be discharged by the Chairperson only if he/she enjoys the continuous confidence of the majority members in the panchayat. So any statutory provision to demonstrate that the Chairperson has lost the confidence of the majority is conducive to public interest and adds strength to such bodies of self- governance. Such a statutory provision 21 cannot be called either unreasonable or ultra vires Part IX of the Constitution."
He would submit that after bringing about of the 97th amendment, the power and right to move no confidence motion is to be construed as an inherent right of every democratically elected body and ought to be read into every bye-law.
18. He would contend that the resistance to the no confidence motion is unsustainable in the light of the law laid-down by the Hon'ble Apex Court in the case of Vipulbhai M. Chaudhary Vs. Gujarat Co-operative Milk Marketing Federation Limited and others, reported in AIR 2015 Supreme Court 1960. He would draw the attention of this Court to the decision rendered in the above case more particularly, to paras 18 to 23, which reads as follows:
"18. In Bhanumati and others v. State of Uttar Pradesh through its Principal Secretary and others, 2010 12 SCC 1 the co-22
operative principles governing democratic institutions have been discussed in detail; no doubt while dealing with the Panchayati Raj institutions. However, the basic democratic principles governing both the institutions, enjoying the constitutional status, are the same and, therefore, it would be profitable to refer to the discussion on the principles. To quote:
"58. These institutions must run on democratic principles. In democracy all persons heading public bodies can continue provided they enjoy the confidence of the persons who comprise such bodies. This is the essence of democratic republicanism. This explains why this provision of no-confidence motion was there in the Act of 1961 even prior to the Seventy-
third Constitution Amendment and has been continued even thereafter. Similar provisions are there in different States in India.23
66. Democracy demands accountability and transparency in the activities of the Chairperson especially in view of the important functions entrusted with the Chairperson in the running of Panchayati Raj institutions. Such duties can be discharged by the Chairperson only if he/she enjoys the continuous confidence of the majority members in the panchayat. So any statutory provision to demonstrate that the Chairperson has lost the confidence of the majority is conducive to public interest and adds strength to such bodies of self- governance. Such a statutory provision cannot be called either unreasonable or ultra vires Part IX of the Constitution."
19. In Pratap Chandra Mehta v. State Bar Council of Madhya Pradesh and others, (2011) 9 SCC 573 and in Usha Bharti v.
24State of Uttar Pradesh and others, (2014) 7 SCC 663 the concept of democratic principles governing the democratic institutions have been discussed. In a democratic institution, confidence is the foundation on which the superstructure of democracy is built. The bedrock of democratic accountability rests on the confidence of the electorate. If the representative body does not have confidence in the office bearer whom they selected, democracy demands such officer to be removed in a democratic manner.
20. A co-operative society is registered on cooperative principles of democracy, equity, equality and solidarity. Democratic accountability, mutual trust, fairness, impartiality, unity or agreement of feeling among the delegates, co-operativeness, etc., are some of the cardinal dimensions of the co-operative principles. A body built on such principles cannot be led by a captain in whom the co-sailors have no confidence.
21. If a person has been selected to an office through democratic process, and when 25 that person looses the confidence of the representatives who selected him, those representatives should necessarily have a democratic right to remove such an office bearer in whom they do not have confidence, in case those institutions are viewed under the Constitution/statues as democratic institutions.
22. In Bhanumati case (AIR 2010 SC 3796 : 2010 AIR SCW 6470) (supra), at paragraph-67, this Court elaborated on this principle:
"67. Any head of a democratic institution must be prepared to face the test of confidence.
Neither the democratically elected Prime Minister of the country nor the Chief Minister of a State is immune from such a test of confidence under the Rules of Procedure framed under Articles 118 and 208 of the Constitution.
Both the Prime Minister of India and Chief Ministers of several States heading the Council of Ministers at the Centre and in 26 several States respectively have to adhere to the principles of collective responsibilities to their respective houses in accordance with Articles 75(3) and 164(2) of the Constitution."
23. In Pratap Chandra Mehta case (supra), at paragraph-45, the principle has been discussed as follows:
"45. In the instant case, the election process as contemplated under the relevant laws is that the members of a State Bar Council are elected by the electorate of advocates on the rolls of the State Bar Council from amongst the electorate itself. The elected members then elect a Chairman, a Vice-
Chairman and the Treasurer of the State Bar Council as well as constitute various committees for carrying out different purposes under the provisions of the Advocates Act. In other words, 27 the body which elects the Chairman or Vice-Chairman of a State Bar Council always consists of members elected to that Council. The democratic principles would require that a person who attains the position of a Chairman or Vice-Chairman, as the case may be, could be removed by the same electorate or smaller body which elected them to that position by taking recourse to a "no-confidence motion" and in accordance with the Rules. The body that elects a person to such a position would and ought to have the right to oust him/her from that post, in the event the majority members of the body do not support the said person at that time. Even if, for the sake of argument, it is taken that this may not be generally true, the provisions of Rule 122-A of the M.P. Rules make it clear, beyond doubt, that a "no-confidence motion" can be 28 brought against the elected Chairman provided the conditions stated in the said Rules are satisfied."
19. He would further contend that the Management of the 4th respondent Society is vested with the board and that as per the democratic principles, the petitioner ought to have taken into confidence the members of the Committee. On the other hand, the petitioner omitted to convene any meeting of the Managing Committee between 20th November 2016 till 31st March 2017 and that the said act itself is in violation of the mandate of Rule 14-AK of the Karnataka Co-operative Societies (Amendment) Rules, 2013 [hereinafter referred to as "the Rules" for short], which stipulates that the Managing Committee ought to convene a meeting of the board once in 3 months. He would further submit that in the interregnum, the petitioner has disbursed loans to several of his favourites, without obtaining approval of the Managing Committee and has even resorted to forging certain documents and on 29 the said fact coming to light majority of the members decided not to attend the meeting held on 31.03.2016 and it was done with the aim of stalling the commission of illegal acts by the petitioner. Despite the said action, the petitioner has failed to repent for the mistakes and on the contrary started acting with an domineering attitude, resulting in the respondents calling for a motion to express no confidence.
20. This Court has adverted to the various allegations and the counter-allegations by the petitioner and the respondents and in the considered opinion of this Court are irrelevant for determination of the dispute before the Court.
21. The only point that falls for consideration of this Court is;
Whether the proposed meeting called at the request of the majority of the members which was scheduled to be held on 09.06.2017 is contrary to law?30
22. On a plain and bare reading of Section 29H of the Act, it would make it apparent that the contention that the meeting notice is violative, as it is issued within two years of the amendment coming into force is without substance. The said limb of argument has no legs to stand. The provision only places an embargo to move the motion within two years of assumption of the office. It is not in dispute that the petitioner has assumed the office in February 2015 and hence more than two years have passed since his assumption of the office. If the intendment of the legislature was that no, no confidence motion could be moved two years from the date of enactment of the provision, the enactment would have stated so. On the other hand, the provision clearly and unambiguously states that no confidence motion can be moved against the office bearer only after two years after his assumption of the office. If it was the intention of the legislature that the provision would take effect or the provision could be invoked only after two years then the legislature would have not used the phrase "after two years 31 of his assumption of office". It would have probably read "after two years from the date of enactment". Hence, the specific argument that the provisions are inapplicable as two years have not passed from the date of enactment requires to be rejected and it is accordingly rejected.
23. The other limb of contentions advanced by the learned Senior Counsel is that no rules have been framed nor is any procedure settled for the purpose of moving a no confidence motion. The said argument is a futile argument in the light of the law laid-down by the Hon'ble Apex Court in the case of Vipulbhai M.Chaudhari referred to supra, wherein the Hon'ble Apex Court after considering in detail the efficacy, scope and intention of the provisions of the Constitution and various enactment providing for no confidence motion was also pleased to discuss and lay down the law in respect of a situation where no express provision regarding no confidence motion is available. In this regard, the Hon'ble Apex Court has laid-down the law in para 25, which reads as follows:32
"No doubt, in the cases referred to above, the respective Acts contained a provision regarding no confidence. What about a situation where there is no express provision regarding no confidence? Once the co-operative society is conferred a constitutional status, it should rise to the constitutional aspirations as a democratic institution. So, it is for the respective legislative bodies to ensure that there is democratic functioning. When the Constitution is eloquent, the laws made thereunder cannot be silent. If the statute is silent or imprecise on the requirements under the Constitution, it is for the court to read the constitutional mandate into the provisions concerned and declare it accordingly. Article 243ZT has given a period of one year to frame/reframe the statues in consonance with Part IXB and thereafter, i.e., with effect from 12.01.2013, those provisions which are inconsistent with Part IXB, cease to operate."
24. The Hon'ble Apex Court after considering the entire gamut of bylaws of the Society's and in the light of 33 the doctrine of casus omissus was pleased to hold that pursuant to the 97th Amendment, co-operative societies have been accorded a Constitutional status which has brought about radical changes in the concept of co- operative societies and that the democratic functioning and autonomy have now become the core constitutional values of a co-operative society and such co-operative societies are to be registered only if they are founded on a co- operative principles of democracy, equality, equity and solidarity. Proceeding further it was pleased to hold that in the light of the conferment of constitutional status on the society the democratic principle of no confidence and removal of chairpersons are to be read into the provisions of the Act, Rules or Byelaws.
25. The second limb of argument advanced by the learned Senior Counsel is answered by the Hon'ble Apex Court in the aforesaid case itself. A useful reference may be made to the observations of the Hon'ble Apex Court contained in paragraphs 44 to 48, whereafter it proceeded 34 to declare the law that every registered co-operative society be it under a Central or State Act is bound to function as a democratic institution and conduct its affairs based on democratic principles. Democratic functioning on democratic principles is to be reflected in the respective Acts or Rules or Bye-laws, both on the principle and procedure. If not, it is for the court to read the democratic principles into the Act or Rules or Byelaws. Proceeding further it held that if a procedure is prescribed in any Act or Rule or Bye-law regarding election of an office bearer by the board, as defined under Article 243ZH(b) of the Constitution and provision for removal thereof, by way of a motion of no confidence is provided, then the same procedure has to be followed. In case there is no express provision under the Act or Rules or Bye-laws for removal of an office bearer, such office bearer is liable to be removed in the event of loss of confidence, by following the same procedure by which he was elected to office. Thereby holding that even in the absence of a specific provision in the Act or Rules or Byelaws, the Chairperson by whatever 35 name of office, he may go by, he is liable to be removed in the event he looses the confidence of the majority of the members. Hence, the second limb of argument advanced by the learned Senior Counsel that in the absence of settled procedure and framing of Rules and Regulations for removing no confidence motion, no such motion can be moved must necessarily fail and it is accordingly rejected.
26. The Hon'ble Apex Court in the case of Vipulbhai M.Chaudhari' referred to supra, in paragraph 53 has been pleased to hold that in case there is no express provision under the Act or Rules or By-laws for removal of an office bearer, such office bearer is liable to be removed, in the event of loss of confidence, by following the same procedure by which he was elected to office. Even assuming for the argument sake that the provision of Section 29H of the Act cannot be invoked. Even then as held by the Hon'ble Apex Court, the petitioner who was elected by the members of the board is also liable to be removed by the same members itself. Rule 14-AG of the Rules provides for the procedure for election of the 36 President. That Apart, the Hon'ble Apex Court has categorically held that absence of a provision for moving a no confidence motion will not remain handicap for the members to move motion for declaring their lack of trust in the chairperson.
In the light of the above discussion, this Court is of the considered opinion that the writ petition must fail and accordingly the writ petition is rejected.
In view of the above, there shall be no order as to costs.
Sd/-
JUDGE CT-HR Ksm*