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1970 Supreme(AP) 242
Andhra Pradesh High Court
Judges : KODANDA RAMAYYA
S.Pratap Reddy - Appellant
Versus
Government Of A.P. represented by its Secretary, Co-operative Department, Hyderabad - Respondent
Decided On : 10-27-70
The disqualification of a member of a co-operative society's committee for default in repaying a loan is limited to the term of office of the committee and ceases when the committee becomes defunct.
Headnote:
CO-OPERATIVE SOCIETY - DISQUALIFICATION OF MEMBER OF COMMITTEE - DEFAULT IN REPAYMENT OF LOAN - PERIOD OF DEFAULT - INTERPRETATION OF STATUTORY PROVISIONS - ANDHRA PRADESH CO-OPERATIVE SOCIETIES ACT (VII OF 1964), SECTIONS 21-A(B), 24(1)(B) - ANDHRA PRADESH CO-OPERATIVE SOCIETIES RULES, 1964, RULES 2(D), (E), 24(1)(B), (2), (3).
Fact of the Case:
The petitioner, a member of the Tandur Co-operative Marketing Society, was disqualified from holding office as a member of the committee due to a default in repaying a loan to the Tandur Co-operative Land Mortgage Bank. He challenged the disqualification order, arguing that the default was not to the society he represented and that the period of default was not specified in the bye-laws.
Finding of the Court:
The court held that the petitioner was indeed disqualified under section 21-A(b) of the Andhra Pradesh Co-operative Societies Act, 1964, read with rule 24(1)(b) of the Andhra Pradesh Co-operative Societies Rules, 1964, as he had committed a default in repaying a loan to another society for a period exceeding 30 days, as specified in the bye-laws of the Tandur Co-operative Land Mortgage Bank.
Issues: 1. Whether the petitioner's default in repaying the loan to the Tandur Co-operative Land Mortgage Bank disqualified him from continuing as a member of the committee of the Tandur Co-operative Marketing Society? 2. If so, what was the effect of such disqualification - whether the petitioner was barred from being a member of the committee of any society for life or only until the repayment of the loan?
Ratio Decidendi: 1. The court interpreted section 21-A(b) and rule 24(1)(b) to mean that a person is disqualified from being a member of the committee of a society if they are in default in repaying a loan to that society or any other society for a period exceeding 30 days, as specified in the bye-laws of the concerned society. 2. The court held that the disqualification was limited to the term of office of the committee to which the petitioner was elected, which could not exceed three years under section 31(2)(a) of the Act. After the expiry of the committee's term, the petitioner would be eligible to be elected or chosen as a member of the committee of any society.
Final Decision: The court dismissed the writ petition, upholding the disqualification order but limiting its effect to the unexpired term of the committee. The petitioner was eligible to be elected as a member of the committee of any society after the expiry of the current committee's term.
( 2 ) THE petitioner is a member of the multipurpose Co-operative Society, Parwathapur on behalf of which he was sent as a delegate to the Tandur Co-operative marketing Society Ltd. , Tandur of which he was elected as Vice-President in the year 1968. By virtue of his being the vice-President of the Tandur Co-operative marketing Society, he was a member of its committee. He was also a primary member of the Tandur Go-operative Land mortgage Bank Ltd. , Tandur in the years 1968-69 and still continues to be so. A loan amounting to Rs. 394-93 due and payable on 1st April, 1969 by the petitioner to the co-operative Land Mortgage Bank, Tandur was paid by him on 15th May, 1969. Clause (F) of by-law 33 of the by-laws of the Tandur Co-operative land Mortgage Bank Ltd. , disqualifies a person from being eligible for appointment as member of the Board of Directors of the Bank if he is in default to the Bank or to any other society in respect of any loan or loans taken by him for a period exceeding thirty days. The Deputy registrar (Marketing and Consumers) hyderabad, issued a notice to the petitioner on 10th October, 1969 to show cause as to why he should not be disqualified from his directorship of the committee of the Co-operative Marketing society, Tandur on the ground that he committed a default in repayment of rs. 394-93 to the Tandur Co-operative land Mortgage Bank for a period exceeding thirty days. In his reply dated 23rd october, 1969, it was stated by the petitioner that no default in repayment of any loan or amount either to the Cooperative Marketing Society of Tandur or parwathapur had been committed by him, that the loan taken by him from the tandur Co-operative Land Mortgage bank was in his individual capacity but not as a delegate of the Co-operative marketing Society, Parwathapur or tandur, that a director is not liable to be disqualified if the period of default does not exceed three months and that in any event the impugned notice was illegal and without jurisdiction as the amount was in fact paid long prior to the issuance of the show cause notice and hence he is not liable to be disqualified. It was also stated that he could not repay the amount in question in time due to Telangana bundh agitation and did not commit any deliberate default. The 2nd respondent rejecting the pleas raised by the petitioner, ultimately disqualified the petitioner by passing the impugned order. Hence this writ petition.
( 3 ) REITERATING the points already raised by his client in his reply notice to the deputy Registrar, Sri Haridatta Reddy argued that the impugned order is illegal and without jurisdiction and in any event the disqualification must be deemed to have ceased by the date of the repayment of the loan. This claim of the petitioner is resisted by the Government pleader contending inter alia that the order of the deputy Registrar is perfectly valid and justified and the petitioner is disqualified to continue as or to become a member of the committee of any society till the end of the life.
( 4 ) UPON the allegations and counterallegations and the contentions raised by the parties and the Counsel, the following questions arise for decisions. (1) Whether on the facts and in the circumstances, the default committed by the petitioner in repaying the loan of Rs. 394-93 to the Co-operative Land mortgage Bank Ltd. , Tandur for a period of 45 days, would disqualify him from continuing as member of the committee and consequently as vice-president of the Co-operative Marketing Society Ltd. , Tandur? (2) If question No. 1 is answered in the affirmative, what then is the
