A member ceases to be a member of the committee if they are a defaulter, and the disqualification would be attracted if the default continued to exist until the initiation of the proceedings under the rule.

1. By the notice Ext. P2 dated 29-1-1980 the 1st respondent, the Deputy Registrar of Co-operative Societies (General), Alleppey told the five petitioners and one V. K. Sukumaran that it had been noticed that they were disqualified to be members of the Board of Directors of the Kalavoor Co-operative Society Ltd. under the Co-operative Societies Rules and the byelaws of the Society and hence ceased to be members of the Board of Directors under R.44 (1)(c)(i) with effect from the date of acquiring the said disqualification and that it was proposed to declare them disqualified to continue on the Committee under R.44(3). As part of the details of the disqualification furnished in the notice it was stated that on 15-1-1980 when the Society was inspected the 1st petitioner was found indebted to the Society as a principal debtor, the 2nd petitioner as a surety, the 3rd petitioner also as a surety, the 4th petitioner as a principal debtor and the 5th petitioner as a surety in the amounts specified. The notice called upon them to file objections, if any, to the proposal to declare them disqualified to be members of the Board of Directors. The report of the Assistant Registrar (Audit Squad) reached the 1st respondent on 17-1-1980 and this led to the notice Ext. P2. The petition states that on 25-1-1980 petitioners 1 and 4 had paid the Society all the amounts till then due, evidenced by Ext. P1 (a) and P1 (b) and that the principal debtor for whom petitioner 2 was surety had also paid up all the instalments outstanding till 25-1-1980. In response to Ext. P2 the petitioners sent a reply on 8-2-1980 that they were no defaulters and were not under any disqualification. The 1st respondent did not accept this explanation and by his order Ext. P3 dated 21-7-1980 declared the petitioners disqualified to hold the office of Directors of the Society. The petitioners seek to quash Ext. P3.

2. The validity of Ext. P3 depends upon the correct interpretation of R.44(1)(c)(i) and (2) of the Co-operative Societies Rules. The relevant part of R.44(1)(c) reads: "44. Disqualification for membership of committee: -

(1) No member of the society shall be eligible for being elected, or appointed as a member of the committee of the society under S.28 if he:

(a) …..

(b) ….

(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 byelaws 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;

(2) A member of the committee shall cease to hold his office as such, if he -

(a) becomes disqualified under sub-rule (1), provided that where a member ceases to bold his office as such by reason of having been sentenced for any offence, be shall be restored to office for such portion of the period for which he was elected or appointed as may remain unexpired at the date of such restoration, if and when the sentence is annul led on appeal or revision and any person elected or appointed in the vacancy in the interim period shall on such restoration vacate office; or

(b) cease to be a member of the society; or Provided that this clause shall not apply to a person nominated by the Government or any other authority specified in this behalf by the Government under sub-section (1) of S.31 of the Act or by Government or Registrar finder sub-section (1) of S.28 of the Act.

(c) is subsequently seen to be disqualified under sub-rule (1) on the date of election itself."

3. The grounds of disqualification prescribed by sub-rule (1) apply to the election or appointment of a member as a member of the committee of a Society; in other words they deal with the election or appointment of members who are subject to pre-existing disqualification. Sub-rule (2) as its opening words state, prescribe the effect of supervening disqualification or a disqualification that is discovered or noticed