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2015 (3) TMI 1430 - SC - Indian LawsRemoval of Chairperson/elected office bearer, by a motion of no confidence - no specific provision on removal by no confidence in the Act, Rules or even Bye-laws of a Cooperative Society - HELD THAT - In PRATAP CHANDRA MEHTA RAMESHWAR NEEKHRA VERSUS STATE BAR COUNCIL OF M.P. ORS. 2011 (8) TMI 1228 - SUPREME COURT 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. A cooperative 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, cooperativeness, etc., are some of the cardinal dimensions of the cooperative principles. A body built on such principles cannot be led by a captain in whom the co-sailors have no confidence - If a person has been selected to an office through democratic process, and when 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. The cooperative society registered under the Central or the 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 Bye-laws - 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. Now that this Court has declared the law regarding the democratic set up of a cooperative society and that it is permissible to remove an elected office bearer through motion of no confidence, and since in many States, the relevant statutes have not carried out the required statutory changes in terms of the constitutional mandate, we feel it just and necessary to lay down certain guidelines - In case the motion of no confidence is once defeated, a fresh motion shall not be introduced within another one year. A motion of no confidence shall be moved only in case there is a request from one-third of the elected members of the Board of Governors/Managing Committee of the cooperative society concerned. The motion of no confidence shall be carried in case the motion is supported by more than fifty per cent of the elected members present in the meeting. Appeal dismissed.
Issues Involved:
1. Whether the Chairperson/elected office bearer can be removed by a motion of no confidence in the absence of a specific provision in the Act, Rules, or Bye-laws of a Cooperative Society. Issue-wise Detailed Analysis: 1. Constitutional and Legislative Framework: The judgment begins by outlining the constitutional and legislative framework governing cooperative societies in India. The cooperative movement in India, which began in the early 20th century, is based on principles of democracy, equality, equity, and solidarity. The 97th Amendment to the Constitution of India, which came into effect on 12.01.2012, gave constitutional status to cooperative societies. This amendment introduced new provisions under Part IXB of the Constitution, emphasizing the need for democratic functioning, autonomy, and professional management of cooperative societies. 2. Democratic Functioning and Autonomy: The judgment stresses that cooperative societies must function as democratic institutions. Article 43B and various provisions under Part IXB of the Constitution mandate that cooperative societies should be governed democratically. The judgment refers to the International Cooperative Alliance Statement on the Cooperative Identity, which highlights the values and principles of cooperatives, including democratic member control and autonomy. 3. Role of the Board of Directors: The judgment discusses the role of the Board of Directors in a cooperative society. The Board is responsible for the administration, management, and control of the society. The Chairperson is elected by the Board and holds office for a specified term. The judgment emphasizes that the Chairperson is the leader of the society and must have the confidence of the Board members. 4. Removal by No Confidence: The core issue in the case is whether the Chairperson can be removed by a motion of no confidence in the absence of an express provision in the Act, Rules, or Bye-laws. The judgment refers to various precedents and legal principles to address this issue. It highlights that democratic accountability is a fundamental aspect of cooperative societies. If the elected representatives lose confidence in the Chairperson, they should have the right to remove the office bearer through a democratic process. 5. Judicial Interpretation and Constitutional Mandate: The judgment asserts that if the statute is silent or imprecise on the requirements under the Constitution, it is the duty of the court to read the constitutional mandate into the provisions concerned. The court must ensure that cooperative societies function democratically, even if the existing laws do not explicitly provide for the removal of office bearers by no confidence. 6. Guidelines for No Confidence Motion: The judgment provides guidelines for moving a motion of no confidence against an office bearer in a cooperative society. It directs that a motion of no confidence can be moved only after two years of the office bearer's assumption of office. If the motion is defeated, a fresh motion cannot be introduced within another year. The motion must be requested by one-third of the elected members of the Board and supported by more than fifty percent of the members present in the meeting. 7. Conclusion: The judgment concludes by dismissing the appeals and affirming the view taken by the High Court of Gujarat. It clarifies that the views expressed by the High Courts of Andhra Pradesh, Bombay, Kerala, and Punjab and Haryana, which did not allow for the removal of office bearers by no confidence in the absence of express provisions, are no longer valid in light of the 97th Amendment to the Constitution. Summary: The Supreme Court of India addressed the issue of whether a Chairperson or elected office bearer of a cooperative society can be removed by a motion of no confidence in the absence of specific provisions in the Act, Rules, or Bye-laws. The judgment emphasized the constitutional mandate for democratic functioning and autonomy of cooperative societies, as outlined in the 97th Amendment to the Constitution. It held that if the statute is silent or imprecise, the court must read the constitutional requirements into the existing provisions. The judgment provided guidelines for moving a motion of no confidence and affirmed the view of the High Court of Gujarat, dismissing the appeals.
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