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R. Thankappan and ors. Vs. Deputy Registrar of Co-operative Societies (General), Alleppey and ors. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
CourtKerala High Court
Decided On
Case NumberO.P. No. 2643 of 1980-M
Judge
Reported inAIR1983Ker96
ActsKerala Co-operative Societies Rules, 1969 - Rule 44(1) and 44(2)
AppellantR. Thankappan and ors.
RespondentDeputy Registrar of Co-operative Societies (General), Alleppey and ors.
Appellant Advocate M.V. Ibrahimkutty, Adv.
Respondent AdvocateGovt. Pleader
DispositionPetition dismissed
Cases ReferredThommen v. State of Kerala
Excerpt:
trusts and societies - disqualification - rules 44 (1) and 44 (2) of kerala co-operative society rules, 1969 - petitioners disqualified from membership of board of directors under rule 44 (1) (c) on ground of being debtors - contended that they had cleared all their dues till 25.01.1980 - contended that sub-rule 1 deals with disqualification that arises before appointment of members - sub-rule 2 deals with disqualification discovered subsequent to election - in case member covered by sub-rule 2 he ceases to hold office - petitioners' case covered by sub-rule 2 - held, petitioners disqualified on ground that they were defaulters under sub-rule 2. - .....that is further made clear by the words 'becomes disqualified' in clause (a), 'cease to be a member' in clause (b) and 'is subsequently seen to be disqualified under sub-rule (1) on the date of election itself' in clause (c) of sub-rule (2). this is so despite the fact that clause (2) (a) attracts the disqualifications prescribed by sub-rule (1). this aspect has been pointed out by the bench decision in mathew v. deputy registrar, co.-op. societies, 1979 ker lt 818 .'while the disqualification is provided for by clause (1) of rule 44 and seems to cover primarily a case of pre-existing disqualification vis-a-vis the time of the election, sub-rule (2) both on its language and its tenor is wide enough to cover a supervenient disqualification or a disqualification that has actually.....
Judgment:
ORDER

G. Balagangadharan Nair, J.

1. By the notice Ext. P2 dated 29-1-1980 the 1st respondent, the Deputy Registrar of Co-operative Societies (General), Alleppey told the five petitioners and one V. K. Sukumaran that it had been noticed that they were disqualified to be members of the Board of Directors of the Kalavoor Co-operative Society Ltd. under the Co-operative Societies Rules and bye-laws of the Society and hence ceased to be members of the Board of Directors under Rule 44 (1) (c) (i) with effect from the date of acquiring the said disqualification and that it was proposed to declare them disqualified to continue on the Committee under Rule 44 (3). As part of the details of the disqualification furnished in the notice it was stated that on 15-1-1980 when the Society was inspected the 1st petitioner was found indebted to the Society as a principal debtor, the 2nd petitioner as a surety the 3rd petitioner also as a surety, the 4th petitioner as a principal debtor and the 5th petitioner as a surety in the amounts specified. The notice called upon them to file objections, if any, to the proposal to declare them disqualified to be members of the Board of Directors. The report of the Assistant Registrar (Audit Squad) reached the 1st respondent on 17-1-1980 and this led to the notice Ext. P2. The petition states that on 25-1-1980, petitioners 1 and 4 had paid the Society all the amounts till then due, evidenced by Ext. P1 (a) and P1 (b) and that the principal debtor for whom petitioner 2 was surety had also paid up all the instalments outstanding till 25-1-1980. In response to Ext. P2 the petitioners sent a reply on 8-2-1980 that they were not defaulters and were not under any disqualification. The 1st respondent did not accept this explanation and by his order Ext. P3 dated 21-7-1980 declared the petitioners disqualified to hold the office of Directors of the Society. The petitioners seek to quash Ext. P3.

2. The validity of Ext. P3 depends upon the correct interpretation of Rule 44 (1) (c) (i) and (2) of the Co-operative Societies Rules. The relevant part of R. 44 (11 (c) reads:

'44. Disqualification for membership of committee:--

(1) No member of the society shall be eligible for being elected, or appointed as a member of the committee of the society under Section 28 if he:--

(a) & (b) ............ ............ ............

(c) (i) is in default to the society or to any other society in respect of any loan or loans taken by him or loan in which he has stood surety, for such period, as is prescribed in the byelaws of the society concerned or in any case for a period exceeding three months or is a defaulter to the society or to any other society;

XX XX XX XX

(2) A member of the committee shall cease to hold his office as such, if he:--

(a) becomes disqualified under Sub-rule (1) provided that where a member ceases to hold his office as such by reason of having been sentenced for any offence, he shall be restored to office for such portion of the period for which he was elected or appointed as may remain unexpired at the date of such restoration, if and when the sentence is annulled on appeal or revision and any person elected or appointed in the vacancy in the interim period shall on such restoration vacate office; or

(b) cease to be a member of the society; or provided that this clause shall not apply to a person nominated by the Government or any other authority specified in this behalf by the Government under Sub-section (1) of Section 31 of the Act or by Government or Registrar under Sub-section (1) of Section 28 of the Act.

(c) is subsequently seen to be disqualified under Sub-rule (1) on the date of election itself.'

3. The grounds of disqualification prescribed by Sub-rule (1) apply to the election or appointment of a member as a member of the Committee of a Society; in other words they deal with the election of appointment of members who are subject to pre-existing disqualification. Sub-rule (2) as its opening words state, prescribes the effect of supervening disqualification or a disqualification that is discovered or noticed subsequent to the election or appointment. That is further made clear by the words 'becomes disqualified' in clause (a), 'cease to be a member' in Clause (b) and 'is subsequently seen to be disqualified under Sub-rule (1) on the date of election itself' in Clause (c) of Sub-rule (2). This is so despite the fact that clause (2) (a) attracts the disqualifications prescribed by Sub-rule (1). This aspect has been pointed out by the Bench decision in Mathew v. Deputy Registrar, Co.-Op. Societies, 1979 Ker LT 818 .

'While the disqualification is provided for by Clause (1) of Rule 44 and seems to cover primarily a case of pre-existing disqualification vis-a-vis the time of the election, Sub-rule (2) both on its language and its tenor is wide enough to cover a supervenient disqualification or a disqualification that has actually emerged or is even noticed subsequent to election. This seems to be indicated by the language of Clause 2 which speaks of a member of the Committee ceasing to hold office, if he 'becomes disqualified' under Sub-rule (1), etc., or ceases to be a member of the Society, or is subsequently seen to be disqualified under Sub-rule (1). These contingencies contemplated for action under Sub-rule (2) appear, to us to indicate a supervenient disqualification.'

4. In the instant case the provision that applies is Sub-rule (2) as the charge against the petitioners is that they became disqualified subsequent to the election and not that they were disqualified at the date of the election. Sub-rule (2) operates, in other words the member of the committee ceases to hold his office, if he becomes disqualified under Sub-rule (1). And under Sub-rule (1) (c) which is the material clause the disqualification consists in being a defaulter. Reading Clause (c) (i) and Sub-rule (2) a member ceases to be a member of the committee if he is a defaulter in terms of Clause (c). When the default occurs the cessation of the membership follows as a consequence. Counsel for the petitioners contended that the disqualification would be attracted only if at the time when proceedings under Clause (1) (c) are initiated the member actually occupies the character of a defaulter and not if he was under the disqualification some time before the initiation of the proceedings. He pointed out that here the proceedings were initiated by the issue of the notice Ext. P2 dated 29-1-1980 and that even before that date and long before Ext. P3, the final order dated 21-7-1980, the amounts in default had been paid up and the petitioners had ceased to be defaulters. In support of his contentions counsel relied upon Thommen v. State of Kerala, 1978 Ker LT 887. In that case the writ petitioner's claim that respondents 4 to 6 were disqualified under Rule 44 (1) (c) was accepted by the Deputy Registrar but was reversed on appeal by the Government. In the writ petition challenging the order of the Government a learned single Judge held that the conclusion of the Government that the order of the Deputy Registrar could not be allowed to stand was right as there was no material to substantiate the contention that respondents 4 to 6 had incurred the disqualification under Rule 44 (1) (c). On appeal the Division Bench expressed its complete agreement with this view. However in the course of the discussion the Bench observed that in employing the present tense -- 'is in default' and 'is a defaulter' -- in Rule 44 (1) (c) the intention was clear that the disqualification would be attracted only if at the lime when the proceedings under the rule are initiated, the person actually occupies the character of a defaulter and that the mere fact that sometime in the past there was a default would not afford a valid ground for taking action unless the state of default continued to exist until the initiation of the proceedings under the rule. In my view, the real ground of the decision was the absence of materials to prove that respondents 4 to 6 had incurred the disqualification -- the sole ground on which the learned single Judge proceeded -- and this view of Rule 44 (1) (c) was indicated obiter. This is further obvious from the absence of any reference to Sub-rule (2) although the alleged disqualification was a supervening disqualification attracting Sub-rule (2) and the absence of any indication as to the effect of the words 'shall cease to hold his office as such, if he becomes disqualified under Sub-rule (1)' in Sub-rule (2). In my opinion the decision does not conclude the point involved in the case in favour of the petitioners.

5. Now the petitioners were defaulters till 25-1-1980 when they claim that their liabilities were discharged and they had thus become disqualified within Rule 44 (1) (c). There is no case that the default did not continue for the requisite period. That being the position the decision in Ext. P3 that the petitioners had ceased to hold their office as members of the committee is right. Ext. P3 is not liable to be quashed.

6. I dismiss the Original Petition but without costs.


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