The court emphasized the importance of serving the notice of default as required by the proviso to Rule 44(2) before disqualifying members of the managing committee for default in payments.

The five petitioners were members of the managing committee of the Thirupuram Service Co-operative Bank. Admittedly the managing committee had its term upto 30th June, 1992 as per the provisions of the Kerala Co-operative Societies Act, 1969 as amended by Ordinance No. 3 of 1992. The strength of the managing committee is nine and the quorum for the committee to function is five.

2. Petitioners challenge the order Ext. P.11 by which they were disqualified from membership of the managing committee under Rule 44(3) of the Kerala Cooperative Societies Rules read with Rule 44(2)(a) and Rule 44(t)(c)(i). The reason alleged is that they were defaulters to this society or to some other societies as mentioned in the order Ext. P11.

3. A notice Ext. P1 dated 4-10-1991 was issued to these five petitioners pointing out their defaults. The first petitioner was a subscriber for a chilly for Rs. 15.000/-, which he had bid. The instalments from 15-3-1991 were in arrear despite the registered notices issued to him by the society on 27-4-1991,18-7-1991 and 27-7-1991. The second petitioner had taken a loan of Rs. 5000/- from the Neyyattinkara Government Servants Co-operative Society in which the repayment was in arrear from 4-3-1991. He had also stood surely for two loans taken by K. Velappan Nair and C. Devarajan, both of whom defaulted payment of the amounts. He was therefore a defaulter under 44(t)(c)(i). The third petitioner had taken a loan from the Neyyattinkara Co-operative Agricultural Development Bank in which the instalments were in arrear from 1-9-1990. He was therefore a defaulter. The 4th petitioner had taken loans from the Neyyattinkara Primary Co-operative Agricultural Development Bank for Rs. 25.000/- and 75.000/-. In respect of the first loan he was in arrear from 1-3-1991 and in respect of the second loan from 1-11-1990. He was also therefore a defaulter. The 5th petitioner had taken a loan with one Vincent from the Neyyattinkara Primary Co-operative Agricultural Development Bank, which was in arrear from 1-3-1989. She was also therefore a defaulter. The first petitioner had paid off the amounts due from him on 30-9-1991. The second petitioner paid the amount due from him on 21-10-1991 and the third petitioner on 19-9-1991. So far as the other two petitioners arc concerned there was no remittance. The respective petitioners mentioned the facts pertaining to them in their replies. Inter alia petitioners 2 to 5 also mentioned that they had not been served with any notice of either their default or that of the principal debtors. Service of notice was a condition precedent for treating a person as defaulter under the proviso to Rule 44(2) (a) read with Rule 44(1)(c)(i). They could not therefore be treated as defaulters. The only case set up by the first petitioner was that he had paid the amounts due and therefore he could not be treated as a defaulter.

4. The second respondent Joint Registrar passed the order Ext. Pll in which he did not deal with the case of absence of notice put forward by petitioners 2 to 5 and of their not being defaulters under the proviso mentioned earlier. He did not choose to deal with the explanation in any detail but simply treated the various petitioners as defaulters for the simple reason that they owe amounts on the date of which Ext. P1 was sent. Since five of the nine directors was thus disqualified the committee lost its quorum and accordingly the managing committee was superseded under S.33 of the Kerala Co-operative Societies Act, 1969 and a Administrator was appointed in its place. Petitioners challenge the order Ext. P11.

5. So far as petitioners 2 to 5 are concerned the order Ext. P11 is defective in that it has not considered the specific point raised by the petitioners that they cannot be treated as defaulters in view of the proviso to Rule 44 (2). This proviso which was introduced in the year 1989 lays down that a person can be treated as defaulter in payment of amounts due to a soc