A surety should not be disqualified for election based on the default of the principal debtors unless the surety was informed of the default and demanded to pay.

K.A. Abdul Gafoor, J.

The petitioner is intending to contest in the election to the Managing Committee of the second respondent Co-operative Bank. The election is scheduled to take place on 28.6.1998 in terms of Ext. P1 notification. The petitioner filed his no minationpaper. His nomination was rejected by the Returning Officer, the first respondent on the reason that there was a default committed by two debtors to the society in repaying the loan amount for which the petitioner was a surety. Therefore, the petitioner also comes as a defaulter and he was disqualified in terms of R.44(1)(c) of the Kerala Co-operative Societies Rules. It is in the above circumstances, the petitioner has approached this Court challenging the said rejection of nomination and seeking a direction to accept his nomination for election.

2. It is an admitted case before me by the respondents that the petitioner was not a principal debtor to the second respondent society. It also an admitted case that the petitioner was only a surety for two principal debtors who had availed of loan, undertaking to repay it in instalments. It is also an admitted case that the said principal debtors had defaulted in paying the instalments and finally, they were liable to pay off the total amount with interest. The petitioner had guaranteed the liability due from them, is also an admitted fact. No notice was issued to the petitioner, intimating such default, is also admitted.

3. In the light of the above facts, the only thing to be considered is whether the petitioner will stand disqualified for being elected or appointed as a member to the Managing Committee of the Co-operative Bank in terms of R.44(1)(c) of the Cooperative Societies Rules. As per R.44(1)(c), no member of the society shall be eligible for being elected, or appointed as a member of the committee of the society under S.28ifhe:

"(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". (emphasis supplied)

To be disqualified, a member of the society shall be 'in default to the society'. A person is in default means he is a defaulter. The liability of the petitioner is arising out of the guarantee or surety in respect of two principal debtors. Therefore, any of such persons shall also be a defaulter. The principal debtor has the facility to pay back the money in instalments. Even if one instalment is defaulted by the principal debtor, he is a defaulter. But the surety has no facility to pay off the amount in instalments. The surety has to repay the total amount due from the principal debtors in lumpsum. The surety will not be informed regularly by the society regarding the amount remitted or about the default committed by the principal debtor, unless a notice is given on him to clear off the entire debt. Therefore, a surety can be said to be a defaulter, according to the petitioner, only when he is informed about the default in respect of any loan to which he had guaranteed as surety. In this case, there is no notice. Therefore, the petitioner cannot be said to be in default to the society, he contends.

4. In support of his contentions, the petitioner has been relying on the decisions reported in Abdul Rasheed v. State of Kerala (1988 (1) KLT 190) and Ravi v. Kottayam Co-operative Urban Bank Ltd. (1993 (1) KLT 644). The former one was pronounced by a Division Bench. That was in respect of an instance of disqualification of an elected member, which is the same as in the case of candidates. At that time, the first

proviso under sub-r.2(a) of R.44 was not in the statute book. In the above circumstances, it was held as follows:

"Moreover, the appellant was only a surety. He was not told prior to the notice, Ext. P1 that he was in default or