A transaction involving the overdrawing of funds from an account in a marketing co-operative society, where the society does not advance loans to its members, does not constitute a loan transaction.

1. This is a writ petition under Articles 226 and 227 of the Constitution of India by Ganga Sahai Trivedi for quashing the declaration and the termination made by the Joint Registrar, Co- operative Societies, Bharatpur Division, Bharatpur, by his order dated April 3, 1991 passed under section 34(8) of the Rajasthan Co- operative Societies Act, 1965 whereby it was held by the Joint Registrar that the petitioner had ceased to continue as Member and Chairman of the Board of Directors of Sawai Madhopur Central Co- operative Bank Ltd., on account of dis-qualification incurred by him under section 34(4) of the said Act and also for quashing of the consequential proceedings which are being taken under section 6and are proposed to be taken under section 74 of the Act.

2. Election to the Board of Directors of Sawai Madhopur Central Co-operative Bank Limited, Sawai Madhopur was held in the month of Sept., 1988 and the petitioner was elected as Chairman of this Co-operative Bank. It appears that Shri Kamal Das Sharma, Advocate had made a complaint to the Registrar, Co-operative Societies, alleging therein that an amount of 10,266.16 on account of loan and Rs. 1,200/- in respect of cost of empty gunny bags, in all Rs. 11,466.16/-, was due as against the petitioner since the year 1988 in favour of Gangapur Marketing Co-operative Society Ltd. and since the petitioner had not paid this amount to the Gangapur Co-operative Society even after the expiry of a period of more than 3 months, the petitioner had become disqualified to continue on the office held by him in the Board of Directors in Sawai Madhopur Co-operative Land Development Bank Ltd., Sawai Madhopur and also from the office of Chair- man Sawai Madhopur Central co-operative Bank Ltd. A notice was served upon the petitioner on July 12, 1990 (Ann.2) by the Joint Registrar, Co-operative Societies, Bharatpur Division, Bharatpur (Respondent No.1) requiring him to ex- plain his position on the matter in writing on July 29, 1990. The petitioner submitted a reply to this notice on July 30, 1990 (Ann.3). The Joint Registrar, after going through the record of Gangapur Marketing Co-operative Society Ltd. and hearing the petitioner, held that the above amount of loan and cost of empty gunny bags were due against the petitioner in favour of the Marketing Society which the petitioner had failed to repay even after the expiry of the time limit for the payment of these dues and consequently, the petitioner had incurred dis-qualification to hold membership and office of Chairman of Sawai Madhopur Central Co-operative Bank Ltd. and he automatically ceased to be member and Chairman of the said Bank. The Joint Registrar made a declaration to that effect in exercise of the powers conferred upon him under section 34(8) of the Rajasthan Co-operative Societies Act, 1965 (for short, hereinafter, the Act"), by his order dated April 3, 1991 (Ann. 7), the validity of which has been challenged in this writ petition.

3. The petitioner has made averments that he was a Congress worker. There was change in political power after the general elections held in the year 1989 and the assembly election held in 1990. After that the Board of Directors of various Co-operative Societies were displaced by removal. Those actions were challenged in this Court by writ petitions. The orders of removal were set aside. The State Government then came with an Ordinance for amending section 36 of the Act. The validity of the Ordinance was also challenged before this Court, and the same was declared illegal. Special leave to appeal petition against that is said to be pending in the Supreme Court. The term of Board of Directors of Sawai Madhopur Central Co-operative Bank Ltd. had not yet expired. Attempts started to dislodge the petitioner also by hook and crook. The petitioner filed two writ petitions in this Court. In this background, the aforesaid proceedings were initiated against the petitioner and the impugned order was pass