P.S. Mani and 2 others vs The Joint Registrar of Co-op. Societies, Erode, and another

Petitioner seeks issuance of writ of certiorari, calling for entire records relating to impugned Orders of 1st respondent made in Na.Ka.8886/98-

A4 dated 13.8.1998, confirming the order of 2nd respondent made in Na.ka.No.1381 of 1998 dt. 30.4.1998 and quash the same, and pass such

further or other orders as this Court may deem fit and proper in the circumstances of the case.

This writ petition is filed by three petitioners. First petitioner was elected as President, 2nd petitioner was elected as Vice-President, and third

petitioner is the Executive committee Member of T.P. Special 43 Muthampalayam Primary Agricultural Co-operative Bank Ltd., Muthampalayam,

Erode District. It is their case that even before they were elected as office-bearers, petitioners 1 and 2 have taken loans, namely, (1) Jewel Loan

No. 959, (2) Short Term Loan No. 1237 for Rs. 15,000 and (3) As Surely for a loanee, respectively. Out of these, 1st petitioner repaid the entire

loan amount on 9.1.1998, and 2nd petitioner repaid the entire loan amount on 27.12.1997, and, as against 3rd petitioner, a decree was obtained

on 23.1.1998 for a sum of Rs.4.463, and subsequently the original loanee has deposited the sum to the Co- operative Bank. It is further said that

the second respondent issued a show-cause notice on 26.2.1998, under Sec. 34 of the Tamil Nadu Co-operative Societies Act, calling upon them

to explain why they should not be removed from the Office of President, Vice-President and Executives Committee member of the co-operative

Bank, for which they sent replies on 5.3.1998 and 20.3.1998 respectively. Second respondent, after taking into consideration the explanation,

held that petitioners have disqualified themselves from holding the office. The matter was taken in revision before 1st respondent, who also

confirmed the Order. This writ petition is filed challenging the concurrent findings of the authorities below.

Detailed counter-affidavits have been filed by respondents 1 and 2. Though separate counters have been filed, contentions are similar. It is their

case that so far as 1st petitioner was concerned, the due date for discharging the loan was 26.7.1997, but it was discharged only on 9.1.1998, and

likewise, so far as 2nd petitioner was concerned, the due date was 12.9.1997, whereas it was discharged only on 27.12.1997. So far as third

petitioner is concerned, the decree obtained against him is not yet discharged. According to them, action has been taken in accordance with law

and, therefore, the impugned Orders are not liable to be set aside. Show-Cause notice was issued on 26.2.1998 under Sec.34 of the Act, and the

impugned Orders were passed only after taking into consideration the explanations given by petitioners. Respondents prayed for dismissal of writ

petition.

Section 34 of the Tamil Nadu co-operative Societies Act 1983 is similar to Section 28 of the Tamil Nadu Co-operative Societies Act, 1961.

Relevant portion of Section 28 (1) of the Act of 1961 read thus:

28(1) No person shall be eligible for being elected or appointed as a member of a committee if he-

(b) (i) is in default to the society or to any other registered society in respect of any loan or loans taken by him for such period as is prescribed in

the by-laws of the society concerned or in any case for a period exceeding three months.

That Section of the earlier Act has got relevance, because under similar circumstances, this Court has interpreted that Section and has held as to

what is meant by the expression ""is in default to the society"". In Sec. 34(1) (b) also, the words used are ""is in default to the registered society"".

Nainar Sundaram, J., as he then was, in the decision reported in Sivashanmugham T.T. v. The Registrar of Co-operative Societies, 1986 (99)

L.W. 400 after extracting the above Section, has held thus:-

The rule invoked by the second respondent to exercise the power of removal is Rule 40 of the Rules framed under the Act. The show cause was

issued on 8th April, 1985. The default ""relates to February, 1980. Admittedly, the dues have been collected in December, 1980. Hence, either on

the date of the show cause or on the date of the passing of the order by the second respondent, the petitioner could not be held to be in default to

the society in question within the meaning of the said provision. The set of expressions used in the provision extracted above is ""is in default to the

society"". S.28 (2) (a) merely says that a member of the committee shall cease to hold office, if he become subject to any of the disqualifications

mentioned is sub- S. (1). If a member of the Committee ""is in default to the Society"" within the meaning of S.28 (1) (b) (i) of the Act, on the date

of the initiation of the action under Rule 40, the exercise of the power of removal may be held to be competent. We can take it that if on the date

of the show cause, namely, on 8th April, 1985, the petitioner was in default within the meaning of S.28 (1) (b) (i) and if there was a clearance of

the dues only after the show cause and before the passing of the order, that may not bring him any amelioration with regard to the default. Such

view has been expressed by Kailasam, J., as he then was, in Ramakrishna Reddiar Vs. The Deputy Registrar of Co-operative Societies and

Another, . But here, long ""before the date of the show cause, namely, 8th April, 1985, the petitioner had cleared the dues, and he could not be

held to have had been in default to the society in question, on the date of initiation of action. Hence it is not possible to bring the matter within the

ambit of Rules 28 (1) (b) (i) and 28 (2) (a) of the Act...

As could be seen from the above extract, learned Judge has also taken into consideration the decision of Kailasam, J. as he then was, reported in

Ramakrishna Reddiar Vs. The Deputy Registrar of Co-operative Societies and Another, . In this case, petitioners 1 and 2 have discharged the

loan on 9.1.1998 and 27.12.1997 respectively. The show cause notice is dated 26.2.1998. So, on the dale when the show cause notices were

issued, they were not in default to the society. Following the decision referred to supra, the writ petition as against petitioners 1 and 2 has to be

allowed.

In regard to third petitioner, he stands on a different fooling. There is a decree against him. Even though in para 3 of the affidavit, it is said that

the original loanee has already deposited the sum with the Bank, in the counter, respondents have denied the same, and, according to them, the

sum is still out-standing. The benefit of clause (b) of sub-section (1) of Section 34 of the Act is not available to a decree debt, since the wordings

are entirely different.

An argument was also advanced by learned counsel for petitioners that the revisional authority has not given sufficient opportunity to substantiate

their case. According to him, immediately after the revision was filed, stay was ordered, and on the date when the case was posted for hearing,

respondents entered appearance and filed counter, and on the same date orders were also passed, and sufficient opportunity was not given. I do

not think that such an argument could be accepted, since the facts are admitted. In my view, the Order cannot be set aside on the ground of lack of

sufficient opportunity. The Court is to consider only the question, what is the law to be applied. Since the third petitioner has not discharged the

debt, and since he is not entitled to the benefits of clause (b) of Sub-section (1) of Section 34 of the Act, the writ petition as against him will have

to be dismissed.

In the result, the writ petition is allowed in part, and the impugned Orders are quashed as against petitioners 1 and 2 herein, and it is declared

that they are not disqualified. As against third petitioner, the writ petition is dismissed. There will be no order as to costs. Connected W.M.Ps. are

closed.