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Andhra Pradesh High Court
Judges : A.SAMBASIVA RAO
N.Venkataratnam Naidu - Appellant
Versus
District Collector, Nellore - Respondent
Decided On : 09-17-71
CO-OPERATIVE SOCIETY - COMMITTEE OF DIRECTORS - POWER TO EXPRESS WANT OF CONFIDENCE IN PRESIDENT OR REPLACE HIM - NO SPECIFIC PROVISION - IMPLIED POWER - DEMOCRATIC AND CO-OPERATIVE PRINCIPLES - CONSTRUCTION OF LAW - REASONABLE AND HARMONIOUS CONSTRUCTION - REMOVAL OF OFFICE-BEARERS AT PLEASURE OF COMMITTEE.
Fact of the Case:
A dispute arose within the Committee of Directors of a Primary Co-operative Land Mortgage Bank in Nellore District, governed by the Andhra Pradesh Co-operative Societies Act, 1964. Six out of nine committee members sent a requisition to the Bank's Secretary to convene a meeting to elect a new President, expressing their loss of confidence in the petitioner, who was the current President. The Secretary declined, citing the absence of a provision for such action in the Act, Rules, or Bye-laws. The Collector, acting as Registrar, directed the Secretary to convene the meeting, which was subsequently held under the chairmanship of the Co-operative Sub-Registrar for L. M. B. S. At the meeting, seven of the nine members attended and unanimously passed a resolution to replace the petitioner with the 3rd respondent as President.
Finding of the Court:
The court held that, although there was no specific provision in the Act, Rules, or Bye-laws authorizing the committee to pass a no-confidence motion or replace an office-bearer, the committee had the implied power to do so. The court reasoned that the absence of a specific provision did not debar the committee from changing office-bearers in whom they had no confidence, as such a provision would be unusual and would result in irremovable office-bearers who would not be responsible to the committee. The court further noted that the committee elected the office-bearers and that the office-bearers were responsible to the committee, leading to the reasonable conclusion that they could be removed at the committee's pleasure.
Issues: 1. Whether the Committee of Directors of a Primary Co-operative Land Mortgage Bank has the power to express want of confidence in its President or otherwise replace him in the absence of a specific provision in the Act, Rules, or Bye-laws. 2. Interpretation of the relevant provisions of the Andhra Pradesh Co-operative Societies Act, 1964, and the Rules and Bye-laws made thereunder.
Ratio Decidendi: The court held that the committee had the implied power to express want of confidence in its President or otherwise replace him, even in the absence of a specific provision in the Act, Rules, or Bye-laws. The court reasoned that: 1. The ultimate authority of a Co-operative Society vests in the general body, subject to the provisions of the Act, Rules, and Bye-laws. 2. The committee is the governing body of the Society and is entrusted with the management of the Society. 3. The President and other office-bearers are elected by the committee and are responsible to the committee. 4. There is no fixed tenure of office for the office-bearers. 5. The absence of a specific provision debarring the committee from changing office-bearers in whom they have no confidence implies that the committee has the power to do so. 6. A reasonable and harmonious construction of the law leads to the conclusion that the committee has the power to remove office-bearers at its pleasure.
Final Decision: The court dismissed the writ petition filed by the petitioner, challenging the resolution passed by the committee to replace him as President. The court held that the committee had the power to express want of confidence in the petitioner and elect a new President, and that the petitioner had lost the confidence of the large majority of the committee.
( 1 ) CAN the Committee of Directors of a Primary Co-operative Land Mortgage Bank express want of confidence in its President or otherwise replace him? This is the principal question that falls for decision in this Writ Petition.
( 2 ) RAPUR Primary Land Mortgage Bank in the Nellore District is a Co-operative Institution governed by the Andhra Pradesh Co-operative Societies Act, 1964 and the Rules made thereunder. The General Body of the Bank elected the petitioner and eight others as members of its Managing Committee on 28-12-1969. That Committee has to function for three years. On the same day the members of the Committee elected the petitioner as the President. However, after the lapse of some time trouble developed in the Committee and six out of the nine members of the Committee sent on 29-1-1971 a requisition to the Secretary of the Bank to convene a meeting of the Committee for consideration of the subject "to elect a President replacing the present President Sri N. Venkataratnam Naidu who does not enjoy the confidence of the majority of the members in the Board of Directors. " The requisitionists informed the Secretary in this letter that they had lost confidence in the petitioner and desired to elect a new President in his place. The Secretary, who is an Officer of the Co-operative Department, replied to the requisitionists by his letter dated 12-2-1971 that he had been directed by the President of the Bank to inform them that the meeting of the Board of Directors could not be convened as requisitioned for the purpose proposed, as there was no provision either in the Co-operative Societies Ac or in the Rules thereunder or in the Bye-laws of the Bank to elect a President by replacing the existing incumbent. The requisitionists had already sent a copy of their requisition to the Collectors, Nellore. The Collector wrote to the Secretary of the Bank by an express Memorandum dated 1-2-1971, forwarding to him a copy of the petition of the requisitionists and requiring him to convene a meeting of the Committee as per Section 32 (3) within fifteen days from the date of the notice and to report the results of the meeting immediately thereafter. Instead of calling for a meeting. the Secretary had replied to the requisitionists by his letter dated 12-2-1971 as stated earlier. Thereupon the personal Assistant to the Collector, Co-operation, sent his proceeding dated 16-2-1971 to the Secretary that the Secretary had not convened the meeting though called upon to do so. Consequently the personal Assistant to the Collector, in exercise of the powers conferred on him under Section 32 (5) (a) of the Act and in terms of the G. O. Ms. No. 38 dated 22-9-1970, directed that a meeting of the Committee be held at 10 A. M. , on 1-3-1971 in the premises of the Bank Rapur to consider the subject mentioned by the requisitionist. It was further directed that the Co-operative Sub-Registrar for L. M. B. S. should preside over the meting. The same officer was also directed to issue necessary meeting notices in the manner prescribed to all the concerned in this behalf. Accordingly notices were sent and a meeting of the Committee was called for 1-3-1971, over which the Co-operative Sub-Registrar for L. M. B. S. , Nellore presided. Seven of the nine members attended the meeting and unanimously passed the requisition resolution. As per the resolution , the 3rd respondent to the writ petition was elected as the President in the place of the petitioner. thereupon the petitioner has brought the present writ petition for the issue of a mandamus to the respondents directing them to treat the petitioner as the only President of the Bank and to issue a consequential direction restraining the 3rd respondent from acting as the President of the Bank. The respondents to the petition are the District Collector, Nellore, the Secretary of the Bank, the newly elected President and one Sesha Reddy.
( 3 ) THE official as well as other respondents fi
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