Bombay High Court Upholds Managing Committee’s Right to Remove Members Through No-Confidence Motion Under Section 73-1D of Maharashtra Co-operative Societies Act, Rules Out Electoral College’s Role in Mid-Term Removals

Court’s Decision

The Bombay High Court dismissed Writ Petition Nos. 1568/2024 and 1163/2024, upholding the validity of the no-confidence motion passed against the petitioners, who were members of the managing committee of a cooperative society. The court ruled that the motion was properly passed by the managing committee in accordance with Section 73-1D of the Maharashtra Co-operative Societies Act, 1960 (MCS Act) and Rule 57-A of the Maharashtra Co-operative Societies Rules, 1961.

The court quashed the Divisional Joint Registrar’s order rejecting another no-confidence motion (challenged in Writ Petition No. 1437/2024), directing the Registrar to proceed with the motion as per the statutory provisions.

Thus, the court confirmed that no-confidence motions against managing committee members must be considered by the managing committee itself, not by the electoral college that elected them.

Facts of the Case

1. Background of the Dispute
   • The petitioners were members of the Managing Committee of a cooperative bank.
   • A special meeting was convened on 04/01/2024, where the managing committee passed a no-confidence motion against the petitioners.
   • The petitioners challenged the validity of this motion, arguing that only the electoral college that elected them could remove them, not the managing committee.
   • The case raised a key legal issue: Who has the authority to remove an elected managing committee member— the managing committee or the electoral college?
2. Additional Challenge
   • In a separate case (WP 1437/2024), another no-confidence motion against different officers was rejected by the Divisional Joint Registrar on the ground that it was not moved by the electoral college.
   • The petitioners challenged this rejection, arguing that the Registrar misunderstood the law.

Issues Before the Court

1. Whether the removal of managing committee members through a no-confidence motion should be done by the managing committee itself or by the electoral college that elected them?
2. Whether the procedure followed for the no-confidence motion complied with Section 73-1D of the MCS Act and Rule 57-A of the MCS Rules?
3. Whether the decision of the General Body in an Annual General Meeting (AGM) could override a no-confidence motion passed by the managing committee?
4. Whether the rejection of the no-confidence motion by the Divisional Joint Registrar was legally justified?

Petitioners’ Arguments

1. Electoral College’s Role
   • The petitioners argued that Section 73-1D(1) of the MCS Act states that a no-confidence motion must be passed by those “who are entitled to vote at the election of such officer”.
   • This, they contended, meant that only the electoral college that had elected them could remove them—not the managing committee.
2. Violation of Democratic Principles
   • They argued that the managing committee should not have the power to remove members elected by a larger electoral college.
   • The removal of committee members by their own colleagues, rather than by the members who originally elected them, violated democratic principles.
3. Reliance on Supreme Court Judgment
   • The petitioners cited Vipulbhai M. Chaudhary v. Gujarat Cooperative Milk Marketing Federation Limited (2015) 8 SCC 1, where the Supreme Court had ruled that courts should not read into statutes what is not there.
   • They argued that the High Court should not interpret the MCS Act in a way that overrides the role of the electoral college.
4. Challenge to Registrar’s Decision (WP 1437/2024)
   • In a separate case, the petitioners challenged the Registrar’s decision to reject a no-confidence motion, arguing that the Registrar wrongly assumed that such motions had to be moved by the electoral college.

Respondents’ Arguments

1. No-Confidence Motion is the Right of the Managing Committee
   • The State and other respondents argued that Section 73-1D and Rule 57-A clearly state that a no-confidence motion should be passed by the managing committee.
   • The statute does not require the electoral college to vote on such motions.
2. Statutory Language Clearly Supports the Managing Committee
   • Section 73-1D(1) states that a motion of no confidence is passed “at a meeting of the committee”.
   • Rule 57-A lays down the entire procedure, which is conducted by the managing committee itself, not the electoral college.
3. General Body’s Decision is Irrelevant
   • The respondents argued that the General Body’s decision in the Annual General Meeting (AGM) to override the no-confidence motion was legally invalid.
   • The MCS Act does not give the General Body the power to reverse a no-confidence motion once it has been passed.
4. The Divisional Joint Registrar’s Rejection Was Incorrect
   • The respondents argued that the Registrar’s rejection of a no-confidence motion on the ground that it had to be moved by the electoral college was legally incorrect.
   • The court should set aside the Registrar’s decision and order it to reconsider the motion as per law.

Analysis of the Law

1. Statutory Interpretation
   • Section 2(7) of the MCS Act defines “committee” as the Managing Committee.
   • Section 2(20) defines “officer” to include elected members of the Managing Committee.
   • Section 73-1D(1) states that a no-confidence motion must be passed at a meeting of the managing committee, by a two-thirds majority.
   • Rule 57-A of the MCS Rules provides the procedure, requiring a requisition from at least one-third of the total committee members and specifying that the motion must be voted on by the managing committee.
2. Key Precedents
   • Vipulbhai M. Chaudhary (2015) 8 SCC 1 was distinguished as it dealt with cases where no removal procedure was prescribed in the statute.
   • Gokuldas Shriramji Raut reaffirmed that an elected managing committee member is an “officer” under Section 2(20), making them subject to Section 73-1D.

Court’s Reasoning

1. Managing Committee Has the Right to Remove Its Members
   • The clear language of Section 73-1D and Rule 57-A makes it evident that the managing committee, not the electoral college, has the power to pass a no-confidence motion.
   • Had the legislature intended otherwise, it would have explicitly stated so.
2. General Body’s Decision Cannot Override the Statutory Procedure
   • The Annual General Meeting’s resolution to overturn the no-confidence motion has no legal basis, as the statute does not allow for such interference.
3. The Divisional Joint Registrar Erred in Rejecting the No-Confidence Motion
   • The Registrar’s order rejecting a no-confidence motion (in WP 1437/2024) on the ground that it had to be moved by the electoral college was legally incorrect.
   • The court quashed the order and directed the Registrar to reconsider the motion as per the statutory procedure.

Conclusion

1. Writ Petitions 1568/2024 and 1163/2024 were dismissed, as the petitioners were validly removed following the proper procedure under Section 73-1D.
2. Writ Petition 1437/2024 was allowed, and the Divisional Joint Registrar’s rejection of a no-confidence motion was quashed.
3. The court reaffirmed that managing committees have the authority to pass no-confidence motions against their members without requiring approval from the electoral college or the General Body.

Implications of the Judgment

• Strengthens the authority of managing committees to remove members through no-confidence motions.
• Restricts electoral colleges from interfering in mid-term removals of managing committee members.
• Clarifies that General Bodies cannot override statutory no-confidence motions.
• Ensures that the statutory procedure under the MCS Act is strictly followed.

This judgment upholds legal clarity, democratic governance, and adherence to cooperative law.

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