M. Rajagopalan vs Baby Alex and Others

Viswanatha Iyer, J.—This appeal is against an interlocutory order passed by the learned Single Judge in C.M.P. 18082 of 1994 staying all further proceedings pursuant to the memo Ext. P-11 dated 13th July 1994 issued by the Joint Registrar of Co-operative Societies, Kottayam and the consequential notices Exts. P-13, and P-14. By the memo Ext. P-11, the Joint Registrar directed a meeting of the managing committee of the Kottayam Co-operative Housing Society Ltd. (a cooperative society registered under the Kerala Co-operative Societies Act, 1969) to be convened within ten days to consider a motion of no-confidence against the President of the Society. The prayer for interim relief was granted by the learned Single Judge, and the fourth Respondent in the writ petition has filed this appeal. The basis of the order of the learned Single Judge is that the fourth Respondent-Appellant, who is also a member of the managing committee of the society, was in default to the society in an amount of Rs. 9,148 with interest thereon from 13th December 1990, that he was not therefore entitled to participate in the discussion of the motion of no-confidence and therefore, there should be a stay of convening of the meeting as directed in Ext. P-11. Reliance was placed for this conclusion on Rule 44(1)(c) read with Rule 2(d) of the Kerala Co-operative Societies Rules, 1969.

The Petitioner in the original petition as well as the Appellant are both members of the managing committee of the co-operative society in question, the election to which took place on 28th October 1993. The writ Petitioner is the President of the Managing Committee. A no-confidence motion was moved against him, which was directed to be considered at a meeting to be held for that purpose, by the proceedings Ext. P-11 dated 13th July 1994. The writ Petitioner made a representation Ext. P-10 dated 15th July 1994 requesting the Joint Registrar to disqualify the Appellant from membership of the managing committee, as a person in default of payment of amounts due to the society. He also prayed for an injunction restraining the Appellant from attending the meeting of the committee pending disposal of the representation Ext. P-10. The writ petition was filed soon thereafter on 25th July 1994, inter alia for a direction to the Joint Registrar to complete the enquiry on Ext. P-10, and to defer the holding of the meeting to consider the motion of no-confidence, till orders are passed on Ext. P-10. When the writ petition came up for admission, the learned Single Judge issued notice to this. Respondents by special messenger for hearing of the petition for interim relief the next day. The impugned order was passed on 26th July 1994, holding that the Appellant was a defaulter as per Rule 44(1)(c) read with Rule 2(d) of the rules, and consequently staying the holding of the meeting to consider the motion of no-confidence. We may at this stage mention that the alleged default and disqualification of the Appellant were conclusively declared by the impugned order, though the matter was only at the preliminary stages and even the pleadings of the Appellant had not been filed. That has given rise to this appeal.

The Appellant is a member of the managing committee of the society. The amount alleged to be due from him is stated to have been due from him even prior to the election on 28th October 1993, from 13th December 1990. Since he is a member of the managing committee of the society, any disqualification to his continuance as a member has to be traced to Sub-rule (2) of Rule 44 of the rules. The relevant provis on is Clause (c) of Sub-rule (2). It states that a member of the managing committee shall cease to hold office, if he is subsequently seen to be disqualified under Sub-rule (1) on the date of the election itself. The case of the writ Petitioner is that the annellant was disqualified on the date of the election itself by virtue of Clause (c) of Sub-rule (1) which it will be only appropriate to quote:

Disqualification of 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 tinder Section 28 if he:

* * * * (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 bye-laws 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.

This sub-rule is in two parts. The first part relates to defaults in respect of any loan taken by a member of the society, or any loan in which he has stood surety. The second part deals with defaulters to the society or to any other society. The difference in the language of the two parts of Clause (c) is significant-the first part deals with cases where the member is in default to the society. while the second part deals with defaulters to the society. Rule 2(d) applies to the first part, and is attracted only if the default is in respect of a loan taken from the society or in respect of which the member is a surety. The second part deals with defaulter as defined in Rule 2(e), that is a person against whom a decree has been obtained.

There is no case in the available pleadings-and for that matter, no case before us-that the Appellant had taken any loan from the society, or that he was a surety for any defaulted loan. The first part of Rule 44(1)(c) is not thus attracted to this case, and Rule 2(d) on which the learned Single Judge relied, and which defines "default" has therefore no application to the facts of this case. The only other ground on which the Appellant could be disqualified is under the latter part of the clause, which speaks of a member being a defaulter to the society or any other society, "Defaulter" is under Rule 2(e) is only a person against whom a decree has been obtained. There is no case in the writ petition that any decree has been obtained by the society against the Appellant. The Appellant could not therefore be treated as a "defaulter" under Rule 2(e) and the latter part of Rule 44(1)(c) is also not attracted to the case. If this be the position, the Appellant does not entail any disqualification under Sub-rule 2(e) read with Sub-rule 1(c) of Rule 44. The order of the learned Single Judge holding that the Appellant is disqualified under Rule 44(1)(c) read with Rule 2(d) has therefore to be set aside.

Even otherwise, an order of disqualification of a sitting member of the managing committee can be passed only in the manner provided by Sub-rule (3) of Rule 44, which provides that if any person is or becomes disqualified to be a member of the managing committee, the Registrar may, on his own motion, or on a representation made to him by any member of the society, or by its financing bank, by an order in writing declare that he shall cease to be a member of the committee of the society concerned from the date of such disqualification. Such an order can be passed only after giving the person affected an opportunity to state his objections to the proposed action and of being heard, if he sp wished. A declaration after following the procedure prescribed by Sub-rule (3) is thus required for the person ceasing to be a member of the managing committee. Such a declaration is imperative and till such declaration is made, the person shall continue to be a member of the committee. There is no dispute that Sub-rule (3) applies to the case on hand in which case the appellant, who is a duly elected member of the managing committee, could cease to be a member only by the Registrar passing an order to that effect. Therefore and till the Joint Registrar passes order on Ext. P-10 disqualifying the Appellant from membership of the managing Committee, he continues to be a member of the committee entitled to take part in its deliberations and to vote at the meetings. The prayer of the writ Petitioner that till such time as the Joint Registrar disposes of the application Ext. P-10, no meeting of the committee shall be held to consider the motion of no-confidence is unsustainable; the prayer cannot be granted. We are of the view that the staying of further proceedings for the holding of meeting to consider the motion of no-confidence against the writ Petitioner, is not correct.

The writ appeal is therefore allowed and the order of the learned Single Judge is set aside. C.M.P. No. 18082 of 1994 is dismissed.