1. Aggrieved by the rejection of his nomination paper at the election held for the purpose of electing Members for the Committee of the Davangere Urban Cooperative Bank Ltd., Davaugere (hereinafter referred to as 'Society'), the petitioner has filed this writ petition.
2. The nomination paper of the petitioner is rejected on the ground that he was a defaulter within the meaning of Rule 14 of the Karnataka Co-operative Societies Rules, 1960 (hereinafter referred to as 'Rules'). It would appear that the petitioner had taken a sum of Rs. 35,000 by way of goods loan on 5-2-1973 from the Society and the said amount became clue on 5-8-1973, The petitioner presented his nomination paper on the 14th of September 1973. The scrutiny of nomination papers was to take place on 17-9-1973. On the same day, the petitioner repaid the entire amount borrowed by him as goods loan along with interest. But before he repaid the said amount, on the Notice Board of the Society, a Notice had been affixed showing the petitioner as a defaulter as he had not repaid the loan by 5-8-1973.
3. Rule 16 of the Rules sets out the disqualifications for Membership of the Committee. The relevant part of the Rule 16 reads as follows:
'16. Disqualification for membership of Committee--(1) No Member of a Cooperative Society shall be eligible for appointment as a Member of the Committee of Management of such Society, if-- (a) he is in default to the Society in respect of any loan taken by him, for such period as is specified in the bye-laws of Society, or in any case for a period exceeding three months;'
Bye-law No. 36 of the Society states that no person shall be eligible for appointment or continuance as a member of the Board of Director if he is a defaulter to the Society in respect of any loan or loans taken by him for over three months prior to the date of meeting. A combined reading of Rule 16 (1) (a) and Bye-law No. 36 makes it clear that a share holder of a Society would be ineligible for appointment as a Member of the Board of Directors or the Committee only when he has been a defaulter for more than three months. Admittedly, in this case, the petitioner became a defaulter on 5-8-1973. Hence he would have been ineligible for being elected as a Member of the Committee only if he had not paid all the arrears due by him by 5-11-1973, Until the expiry of 5-11-1973, the petitioner would not have incurred the disqualification in question. The nomination paper was presented by him on 14th September 1973 and the election had to take place on 23-9-1973. Hence, it could not be said that the petitioner was a defaulter within the meaning of Rule 16 (1) (a) of the Rules and Bye-law No. 36. The expression 'defaulter' used in Rule 14, should be understood as meaning a defaulter within the meaning of Rule 16 (I) (a) read with Bye-law No. 36.
4. Similarly, another loan in respect of which the petitioner had stood ss a surety having become due on 14-9-1973, it cannot be said that on the relevant date, the petitioner was a defaulter.
5. Since the petitioner was not a defaulter within the meaning of Rule 16 (1) (a) and Bye-law No. 36, the rejection of his nomination paper on 17-9-1973, should be held to be totally unjustifiable. The order rejecting his nomination paper is, therefore, set aside. The Board or Directors of the Society is directed to treat the nomination paper filed by the petitioner as a valid nomination paper and proceed with the election from the stage at which it was intercepted by an order of stay issued by this Court. Writ petition is accordingly allowed. No costs.
6. Petition allowed.