A loan granted to a non-member of a co-operative society in contravention of Section 39 of the West Bengal Co-operative Societies Act, 1973, is not legally enforceable, and a guarantor cannot be held liable for such a loan.

( 1 ) THE present writ petitioner is a Guarantor to Purulia co-operative Bank Ltd. (hereinafter referred to as the said Bank) for obtaining loan of Rs. 45,000 at an interest of 10% per annum by the respondent Nos. 7 end 8, namely, Biswanath Chatterjee and Smt. Tapati Chatterjee who are carrying on business under the name and style of Bichitra Sales Corporation at purulia, dealing in various kinds of electrical goods etc.

( 2 ) THE respondents Nos. 7 and 8, however, failed to repay Rs. 44,999. 99 on account of "principal" and Rs. 6,743 40 on account of "interest" after expiry of the relevant date i. e. June 28, 1975 and accordingly, the Bank, by service of registered notice dated October 30, 1975, called upon the said respondents Nos. 7 and 8 to repay the said amount.

( 3 ) THEREAFTER, a dispute under Section 86 of the West Bengal Co-operative societies Act, 1973 (hereinafter referred to as the said Act) was raised before the Assistant Registrar, Co-operative Societies, Purulia at the instance of the respondent-Bank, and Arbitration Case No. 5 of 1975-76 was started, which was not contested by respondents Nos. 7 and 8.

( 4 ) THE Writ Petitioner being the guarantor to the Bank contested the said arbitration by filing writtea statement and stated, inter alia, that the said arbitration proceeding was bad in law and not maintainable. In the written statement, dealing with factual aspect, the writ petitioner submitted that excepting the agreement dated February 15, 1973, the writ petitioner did cot sign any paper and/or documents and the signatures appearing on any other documents were not his signatures.

( 5 ) THE District Auditor of Co-operative Societies, respondent No. 4, who was appointed Arbitrator, of course, did not consider the said documents and by his judgment and Award dated September 3, 1976 (which has been annexed as Annexure 'c' to the writ petition), directed defendants Nos 1, 2 and 3 i e. (writ petitioner herein) to pay Bank Rs 53,487. 77 p. by September 30,1976.

( 6 ) IB the written statement, defendant submitted before the learned arbitrator that the Stamp, on which the Bond was executed on August 17,1974, was purchased on September 11, 1974, and the writ petitioner's assertion that be never put his signature on the said Bond was also recorded in the order but the Arbitrator passed an Award as follows : "the defendants Nos 1, 2 and 3 shall pay within 30-9-75 to the plaintiff bank, namely, Purulia Central Co-operative Bank Ltd. the sum of rs. 53,487. 77 (Rupees Fifty-three thousand four hundred eighty-seven and seventy-seven paise ).

( 7 ) THE writ petitioner, being aggrieved by the said decision preferred an appiication-in-revision, under Section 133 (3) of the said Act and took specific ground that the Assistant Registrar, Co-operative Societies, Purulia, had no jurisdiction, to entertain the dispute, which arose out of a matter not "relating to the affairs of the Society". On the ground that the transactions out of which the impugned dispute arose could not be included as "affairs of the Society" viz. , the Bank.

( 8 ) IT was also alleged in the said revision applicatiop that the impugned award having been passed in contravention of the provisions of Section 39 of the West Bengal Co-operative Societies Act, 1973 it was uneaforceable in law.

( 9 ) AT this stage, it would be convenient to set out the provisions of Section 39 of the said Act, here in below ; "39. Restrictions on lending. (1) A Co-operative Society shall not make loans (a) to any person other than a member ; or (b) to a member in excess either of the maximum or of the normal credit determined by the Society for that member in accordance with the rules, whichever may be prescribed. (2) *****

( 10 ) THE revision application was heard by the learned Member of the tribunal and by a reasoned judgment and order dated October 18, 1977, the said Tribunal dismissed the revisional application preferred on behalf of the writ petiti