The disqualification under Rule 44(1) of the Co-operative Societies Rules should exist at the time when the action is initiated, and a surety cannot be disqualified solely on the ground that the debtor has not discharged the debt without prior notice and demand from the surety.

1. The Writ petitioner is the Writ appellant. He was selected to the Board of Directors of a Co-operative Bank is June, 1984. It is said that the term of the Board is for five years. He had stood surety for a debt incurred in 1979. That debt has been paid off and the liability discharged on 25-7-1985. Thereafter, on 16-11-1985, notice was issued to the appellant asking him to show cause why he should not be disqualified under R.44 (1) of the Co-operative Societies Rules. He submitted his explanation. His defence was overruled and he was disqualified by the Joint Registrar under Ext.P3 dated 29-1-1986. A revision was taken to the Government and the Government confirmed the said decision as per Ext.P5 dated 31-5-1986. The appellant, therefore, challenged Exts.P3 and P5, however, without success. Hence this appeal.

2. Even though the learned single judge has taken pains to distinguish a Division Bench ruling of this Court which on the facts of this case, squarely binds us, we do not think that there is room for the non-application of the decision to this case.

3. In Thommen v. State of Kerala (1978 KLT. 887) interpreting Rule 44(1) of the Kerala Co-operative Societies Rules, Justice Balakrishna Eradi and Justice Kader held thus:

"In employing the present tense by using the ward'is', the rule-making authority has clearly indicated its intention that the disqualification will be attracted only if at the time when the proceedings under the rule are initiated the person actually occupies the character of a defaulter. The mere fact that at some lime in the past a member might have been in default to the society or to any other society in respect of any loan etc. will not afford a valid ground for taking action under R.44 unless it is farther shown that the stale of such default actually continued to exist as on the date when the proceedings under the rule are initiated."

4. There is another ruling of a Division Bench of this Court in Madanamohanan Kartha v. Elamkulam S. Co-op. Bank (1983 KLT 640) where Their Lordships had to consider the effect of R.44(2) and not R.44(1). We are not considering whether the decision in 1978 KLT. 887 in its interpretation of R.44(1) as obiter dicta or not for, we are, with great respect, in entire agreement with the reasoning and conclusion arrived at in that judgment. As we understand the decision in 1978 KLT. 837, it has been clearly laid down there that the disqualification should exist when the action is initiated under R.44(1). When an election is not challenged in an election dispute, add he is declared elected and he is sought to be disqualified by proceedings taken under R.44(1), he could be disqualified under the said rule when he incurred the disqualification on the date of issuance of notice under R.44(1).

5. In the present case, the disqualification ceased in July 1985 and the action under R.44(1) was initiated in November, 1985. There was no cause to initiate action under R.44(1) to disqualify a member who was admittedly elected in June, 1984. We hold that Exts.P3 and P5 are both wrong and illegal and the appellant did not suffer firm any disqualification as provided in R.44 (1) of the Kerala Co-operative Societies Rules. More over, the appellent was only a surety. He was not told prior to the notice, Ext. P1 that he was in default or that the principal debtor had defaulted. As the liability of the surety is co-extensive with that of the debtor, when the debtor was not liable, the surety's liability ended. The surety cannot be disqualified under R.44 (1) solely on the ground that the debtor has not discharged his debt, unless the surety was informed of the default and there was a demand from the surety also. This should precede any action under R.44(1) of the Co-operative Societies Rules. As no such notice was issued to the appellant, he was not a defaulter on that account as well.

6. The appellant has been continuing as a member of the Managing Committee on the strength of the stay