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Roha Ashtami Co-operative Urban Bank Ltd. Vs. the Judge, Co-operative Court, Alibagh (Kolaba) and ors. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
CourtMumbai High Court
Decided On
Case NumberSpecial Civil Appln. No. 1256 of 1977
Judge
Reported inAIR1978Bom62; (1977)79BOMLR712; 1977MhLJ712
ActsMaharashtra Co-operative Societies Rules, 1961 - Rule 58, 58(1) and 58(2)
AppellantRoha Ashtami Co-operative Urban Bank Ltd.
RespondentThe Judge, Co-operative Court, Alibagh (Kolaba) and ors.
Appellant AdvocateB.R. Naik and ;Y.R. Naik, Advs.
Respondent AdvocateM.B. Badkar, Adv.
Excerpt:
.....societies rules, 1961, rule 58(1)(a), (2) - incurring disability by sitting member of the managing committee of a co-operative society.;under rule 58 of the maharashtra co-operative societies rules, 1961, disqualifications for membership of a committee of the society are provided for. sub-rule (1) deals with eligibility for being elected as a member of the committee. sub-rule (2) points out that a member of the committee of a society shall cease to hold office if he incurs any of the disqualifications mentioned in sub-rule (1). sub-rule (1) operates at the threshold of the entry of the member into the managing committee of the society, and sub-rule (2) refers to the same disqualifications as in sub-rule (1) but they have to be incurred after one becomes a member of the managing..........of. it pertains to only one question regarding incurring disability by sitting member of the managing committee of a co-operative society. for understanding that question few facts that should be noted are these:2. the petitioner bank is a co-operative society, it has a managing committee of which respondent no. 3 dattatraya desai was an elected member. he obtained a loan from the bank, which he could. he did not repay the loan within one year, nor within a further period of three months. the last date for payment in this manner with the extended period of three months expired on or about 24th december 1975. he, however, made full payment of the debt on or about 21st jan. 1976. however, a meeting of the managing committee was already called on the 23rd january 1976 where one of the.....
Judgment:

Deshmukh, J.

1. The petition was posted today for hearing the interim rule regarding ex parte injunction but by the consent of the parties, the whole petition is heard and is finally disposed of. It pertains to only one question regarding incurring disability by sitting member of the Managing Committee of a Co-operative Society. For understanding that question few facts that should be noted are these:

2. The petitioner Bank is a Co-operative Society, It has a Managing Committee of which respondent No. 3 Dattatraya Desai was an elected member. He obtained a loan from the Bank, which he could. He did not repay the loan within one year, nor within a further period of three months. The last date for payment in this manner with the extended period of three months expired on or about 24th December 1975. He, however, made full payment of the debt on or about 21st Jan. 1976. However, a meeting of the Managing Committee was already called on the 23rd January 1976 where one of the items on the agenda was to consider the default of respondent No. 3. It appears that respondent No. 3 was not present in that meeting, though he was a member of the Managing Committee. The Managing Committee took notice of the fact that respondent No. 3 had not repaid the amount within one year, which was the normal period for repayment of the general debt extending up to Rs. 1,000 as provided by bye-law 39 of the Society. However, the Managing Committee further noted that not only within that period the loan was not repaid but it was also not paid within the extended period of three months as contemplated by Clause (a) of sub-rule (1) of Rule 58 of the Maharashtra Co-opera' tive Societies Rules 1961. They seem to have ignored the fact that payment was actually made on 21st Jan. 1976 just two days before the meeting of the Managing Committee.

3. On these facts the Managing Committee declared that respondent No. 3ceased to be a member as provided by sub-rule (2) of Rule 58 of the 1981 Rules. Being aggrieved by this Resolution, respondent No. 3 raised a dispute under S. 91 before the Co-operative Court.

4. The learned Officer presiding over that Court held that since the payment was made before the Resolution was passed by the Managing Committee, the disqualification was cured and respondent No. 3 had not ceased to be a member of the Managing Committee. An appeal was carried against the decision by the petitioner Bank to the Co-operative Appellate Court. The learned Judge of that Court has not positively decided the point in dispute but merely observed that three years' period of the Managing Committee of the present Society comes to an end by 30th of June 1977 and no useful purpose would be served by giving a decision for or against respondent No. 3. Against such an order, present writ petition has been filed.

5. In our view the point is very clear. Under Rule 58 of the said Rules of 1961 disqualifications for membership of a committee of the Society are provided for. Sub-rule (1) deals with eligibility for being elected as a member of the Committee. Sub-rule (2) points out that a member of the Committee of a society shall cease to hold office if he incurs any of the disqualifications mentioned in sub-rule (1). In other words sub-rule (1) operates at the threshold of the entry of the member into the Managing Committee of the Society and sub-rule (2) refers to the same disqualifications as in sub-rule (1) but they have to be incurred after one becomes a member of the Managing Committee. The provisions of sub-rule (2) are prima facie self-operative and they do not require that some authority, officer or the committee of the society itself, has to decide the fact of having incurred a disqualification.

6. In the present case, reference is being made to Clause (a) of sub-rule (1) of Rule 58. That clause says that a person is not eligible to be elected as a member if he is in default to any society in respect of any dues from him, either as a borrower or as a surety for such period as is specified in this behalf in the bye-laws of the concerned society, or for a period exceeding three months, whichever is less. Disqualification for being elected also constitutes a disqualification for a sitting member, if he commits a default and answers the description of that clause.

7. In the present case, admittedly the general loan of Rs. 1,000 taken by respondent No. 3 was repayable within one year from the date of borrowing as is provided by bye-law 39. Admittedly, he has not paid that loan. As required by Clause (a) of sub-rule (1) of Rule 58 the Society has not provided any specific period and as such that clause will become operative. In other words in order not to incur a disqualification respondent No. 3 had to pay the loan within a total period of 15 months from the date of borrowing, which cover the two different periods of 12 months under bye-law 39 extended up to three months under Clause (a) of sub-rule (1) of Rule 58 of the Rules of 1961. Even that is not done by respondent No 3. He has undoubtedly paid after this entire period was over but a few days before the Managing Committee met to take cognizance of this incurring disqualification and to take further steps for filling in the vacancy as is required to be done under bye-law 35 (9) read with bye-law 29.

8. Shri Badkar for respondent No. 3 wants to say that unless a resolution is passed by the Managing Committee the disqualification does not become operative and the person does not cease to be a member of the Managing Committee. We see no warrant for such an interpretation. It may be that the Managing Committee has to make a resolution under bye-law 35 (9) but that resolution is merely to be made for the purpose of taking cognizance of the existence of a vacancy so that procedure under bye-law 29 could be adopted for filling up the vacancy for the balance period of the Managing Committee. The disqualification under Clause (a) of sub-rule (1) of R. 58 operates the moment the loan is not repaid within the period specified and the member of the Managing Committee who has committed that default ceases to be a member any more. The recognition of that fact on the record of the society in the form of a formal resolution subsequently cannot amount, as if giving extended time for payment until the next Managing Committee meets and passes such a resolution. That would be the effect of the argument of Mr Badkar, if we were to hold that until the Managing Committee passed its resolution on 23rd January 1976 the disqualification could not be said to have been incurred. The disqualification, according to us, automatically was incurred on 24th Dec. 1975 itselfwhen the grace period of payment inaddition to the original period providedby the bye-law was over when respondent No. 3 ceased to be a member andthe petitioner Bank was within its rightsin passing the impugned resolution. Thisbeing our view of the matter, we quashthe order passed by the Co-operativeCourt and also quash the AppellateCourt's order though it decides nothingbut takes the colour as if confirming theorder of the trial Court. We also holdthat respondent No. 3 has already incurred a disqualification as from 23rd Dec.1975 and ceased to be a member of theManaging Committee from that date. Thepetition is thus allowed. Rule made ab-solute. There will be no order as to costs.

9. Petition allowed.


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