The liability of a surety under a contract of guarantee arises only in case of default by the principal debtor, and the court has jurisdiction to intervene in cases of patent illegality and lack of jurisdiction.

The Kottayam Co-operative Urban Bank Ltd. the respondent No.1 herein is currently under the control of the Administrator, the respondent No.2 to this petition. Elections to the Managing Committee of the respondent No.1 society are scheduled to be held on 7-2-1993. The respondent No.3 to this petition is the Returning Officer. The Joint Registrar of Co-operative Societies, Kottayam is respondent No.4 to this petition.

The petitioner a member seeks a direction to accept the petitioner's nomination as valid.

2. The petitioner filed his nomination before 14-1-1993 which was the time stipulated by the Returning Officer. On 15-1-1993 at the time of scrutiny it was found that the petitioner as a guarantor had not discharged the debt of the principal debtor. Meanwhile on 14-1-1993 the petitioner claims to have paid off the debt of Rs.465/- owed by his principal debt or to the respondent No.1 Bank. A copy of the receipt (Ext.P1 to the petition) was produced before the Returning Officer on 15-1-1993. The Returning Officer carne to the conclusion that the petitioner was a defaulter and therefore ineligible under S.28(t) of the Kerala Co-operative Societies Rules and rejected the nomination paper.

3. Section 28 of the Act has obviously no application because the nomination has not been rejected on any of the grounds stated in sub-section (2) of S.28. Rule 44 has the marginal note "disqualification of membership of committee." Sub-rule (1) of R.44 enacts that no member of the society shall be eligible for being elected or appointed as a member of the committee of the society if he has incurred any of the disqualifications set out in clause (a) to (k) of that sub-rule. It is sub-rule (1) of R.44 that would govern the present case because the challenge to the nomination has arisen at the stage of determination of eligibility for being elected. Contrast this with sub-rule (2) of R.44 which enacts that "a member of the committee shall cease to hold his office as such" if he incurs any of the disqualifications set out in clauses (a), (b) and

(c) of that sub-rule. Sub-rule (2) of R.44 therefore applies after the elections to the committee. The proviso to clause (a) of sub-rule (2) of R.44 lays down that the disqualification under sub-clause (i) of clause (c) of sub-rule (1) shall be deemed to be accrued only after expiry of a period of one month from the date of receipt by the member concerned of a notice from the society demanding him to clear off the defaulted amount. In oilier words, the disqualification arising out of a default to pay the debt cannot arise unless the member concerned has failed to pay the debt inspite of a month's notice. As held in O.P' 16101 of 1992 (1993 (!) KLT 218), by my learned brother Farced Pillay, J. the proviso has io application to a case where a member seeks election to the managing committee. Therefore one thing is clear. The petitioner's case undoubtedly falls within clause (c) of sub-rule (1) of R.44 and not under sub-rule (2) of R.44 of the Act.

4. Assuming, however, that the petitioner has not discharged the debt of his principal debtor can it be held that the petitioner "is in default to the society?" Since the question of receipt of notice referred to in the proviso to clause (a) of sub-rule (2) of R.44 does not arise, the question as to whether the petitioner is a defaulter has to be decided without reference to the proviso to clause (a) of sub-rule (2) of R.44.

The question of default by the petitioner arose because he stood surety to another member. It is therefore necessary to consider the law in regard-to the liability of a surely. The contract between the petitioner, his principal debtor and the creditor society is a contract of guarantee. A contract of guarantee is a contract to perform the promise or discharge the liability of a third person in case of his default. The person who gives the guarantee is called the surety; the person in respect of whose default the guarantee is given is called