( 1 ) R. K. Verma, J. By this petition under Article 226 of the Constitution of India, the petitioner, who is a member of respondent No. 2-Co-operative society viz. , Shri Balaji Adimjati Seva Sahakari Sanstha Maryadit, Badgonda tahsil Mhow, District Indore, has sought quashing of the decision of respondent no. 1 Returning Officer rejecting the nomination paper of the petitioner for election to the Executive Committee of the respondent No. 2-3ociety. ( 2 ) THE facts giving rise to this petition, briefly stated, are as follows : every Society is required to prepare a list of members including the members who are disqualified under Section 50-A of the M. P. Co-operative societies Act, 1961 (hereinafter referred to as "the Act") as on the date preceding 40 days prior to the date of holding election-meeting of the Society under Rule 23 (3) (b) of the M. P. Co-operative Societies Rules, 1962 (hereinafter referred to as "the Rule") which reads as under :"every Society shall prepare a list of members including the members who are disqualified under Section 50-A, and list of delegates of member Societies including Societies which are disqualified under section 50-A, as on the day preceding 40 days prior to the date of holding Annual General Meeting or Special General Meeting, as the case may be, of the Society in which election of the members of Committee delegates, if any, for representing the society is to take place, the list shall indicate the defaulters within the meaning of Section 50-A by assigning (X-defaulter)sign and if members belong to the Scheduled Castes, Scheduled tribes or economically weaker sections, such category of the members against their names and the list so prepared shall be made available to the Returning Officer appointed by the Registrar". ( 3 ) IN accordance with Rule 23 after having invited objections to the list of members and disposing of the objections final voters' list is required to be published by the Returning Officer and in the instant case such a list was published on 11-10-1988 in regard to the members of respondent No. 2 society which has been filed as Annexure P-11 to the petitions. ( 4 ) IN the final voters' list (Annexure P-II) published by the respondent no. 1 the name of the petitioner appeared at Serial No. 58. ( 4 ) IN the final voters' list (Annexure P-II) published by the respondent no. 1 the name of the petitioner appeared at Serial No. 58. In this list the petitioner has not been shown to be a defaulter under Section 50-A which reads as follows: 50a. "disqualification for being candidate or voter at election to committee of Society. No person shall be qualified to be a candidate for the election to the Committee of a Society nor shall he be qualified to vote at such election if he is in default for a period exceeding twelve months to the Society or any other society of any loan or loans taken by him as member of such Society. " ( 5 ) ON 28-10-1988 the Returning Officer declared the election programme (Annexure P-1 to the petition) for election of nine members of the Executive Committee of respondent No. 2 Society which included six members from general category and others from reserved categories. In the election programme the following dates were fixed : (a) 6-11-1988 for submitting nomination papers. (b) 7-11-1988 for scrutiny of nomination papers. (c) 17-11-1988 for election and counting of votes. (d) 28-11-1988 for election of President/vice-President/representatives to other Societies. The petitioner and the respondents Nos. 3, 4 and 5 submitted their nomination papers which were scrutinised on 7-11-88. The respondent No. 1 rejected the nomination paper of the petitioner, saying that he had received a letter from Malav Sahakari Marketing Society Ltd , Mhow, District Indore, to the effect that some amount towards purchase of tanki of soyabean oil was due against the petitioner and, therefore, his nomination form was being rejected. The petitioner disputed the correctness of the allegation and denied that there was any commercial transaction between him and the Malav Sahakari marketing Society Ltd. According to the petitioner the rejection of the petitioner's nomination form is based on the demand notice addressed to "kalusingh Baluji Haste : Prahlad Munnalal Gram Badgonda" (Annexure p-III) by the Malav Sahakari Marketing Society Ltd. , stating that rs. 1,811. 25 Ps. were due on account of one Soyabean Oil Tanki. The petitioner disputes that he is liable under such a letter of demand. 1,811. 25 Ps. were due on account of one Soyabean Oil Tanki. The petitioner disputes that he is liable under such a letter of demand. ( 6 ) ON 9-11-1988 the petitioner by an application (Annexure P-VI)requested the respondent No. 1 to supply him a copy of the reasons for rejection of his nomination paper and the respondent No. 1 recorded the reason of rejection to the effect that there were outstanding dues on the petitioner as per the letter of the Marketing Society. Apparently, the rejection of petitioner's nomination paper is made on the basis that the petitioner was disqualified, being a defaulter within the meaning of Section 50-A of the Act. ( 7 ) LEARNED counsel for the petitioner has firstly contended that the rejection of the nomination paper of the petitioner on the ground of holding him a defaulter within the meaning of Section 50-A of the Act is illegal when the final voters' list never showed him to be a defaulter. The second contention of learned counsel for the petitioner is that even on the allegation of any dues towards price in a commercial transaction, the petitioner cannoc be held to be in default to the Malav Sahakari Marketing Society Ltd. , of any loan or loans taken by him as a member of respondent No. 2 Society as contemplated in Section 50-A of the Act. Learned counsel has submitted that price of goods supplied by the Marketing Society to a member of a co-operative Society, if outstanding, does not constitute a loan within the meaning of Section 52-A of the Act which specifically speaks of default in matter of loan and not regarding dues or debts of other nature like those arising from a commercial transaction. The Malav Sahakari Marketing society Ltd. , is not a credit Society and it does not have any loan transaction with members of any Go-operative Society and, therefore, the outstanding dues, even if there be any, on account of supply of Soyabean Oil by the marketing Society, do not constitute a default in respect of a loan as contemplated in Section 52-A of the Act. Learned counsel for the petitioner has in this connection placed reliance on a Supreme Court Decision in veerpalsingh v. Dy. Registrar, Co-operative Societies, Meerut, [ air 1973 SC 1052 ] wherein ths relevant observations are as follows :"the Federation is not a credit Society. Learned counsel for the petitioner has in this connection placed reliance on a Supreme Court Decision in veerpalsingh v. Dy. Registrar, Co-operative Societies, Meerut, [ air 1973 SC 1052 ] wherein ths relevant observations are as follows :"the Federation is not a credit Society. The Federation does not have any loan transactions with the Co-operative Unions. The co-operative Unions did not have any loan transactions with the petitioner. The dues of the Co-operative Unions are in respect of supplies of goods by the Federation to the Co-operative unions. These are commercial transactions. These are commercial debts. Price of goods supplied, if outstanding, does not constitute a loan within the meaning of the bye-law. The impugned order proceeded entirely on an illegal basis and wrong interpretation of the bye-law. The order is bad. " ( 8 ) LEARNED counsel for the petitioner has in support of his submission further cited a decision of the Bombay High Court in Krishnanath Nanasaheb deshmukh v. 5. B. Kulkarni, Commissioner, Pune Division, Pune and others [1978 Man LJ 431] which is also based on the view taken by their Lordships of the Supreme Court in the case of Veerpalsingh (supra ). ( 9 ) HAVING heard learned counsel for the parties, we are of the opinion that the contention of the learned counsel for the petitioner must be upheld and this petition should be allowed even without going into his first contention that the nomination paper of the petitioner could not be rejected on the ground of default when the final voters' list as published, did not show him to be a defaulter. ( 10 ) SECTION 50-A of the Act provides that no person shall be qualified to be a candidate for the election to the Committee of a Society, if he is in default for a period exceeding twelve months to the Society or any other society of any loan or loans taken by him as member of such Society. This provision makes it abundantly clear that for disqualifying a candidate at election to committee of the Society, it must be shown that he had taken in the past any loan or loans from the Society of which he is a member or from any other Society and that he has not repaid the loan and that the period of default exceeds 12 months. In the instant case, the stand of respondent No. 1 is that the petitioner had purchased Soyabean Oil from malav Sahakari Marketing Society and that an amount was due from him towards the price of Soyabean Oil supplied by the said Society. The outstanding dues in respect of which the petitioner is alleged to have been in default, clearly pertain to a commercial transaction of purchase and supply of oil and not to a transaction of loan as contemplated under section 52-A. A loan is a sum of money lent to be returned with or without interest. It is not the case of respondents that the Malav Sahakari marketing Society is a credit Society or that it had advanced any loan to the petitioner. Indebtendness or outstanding liability as a result of advance of loan by the Society alone can constitute default within the meaning of section 52-A which is not the instant case, The provisions of Section 52-A, therefore, are not attracted in the circumstances as alleged by the respondent no. 1 and consequently, the rejection of petitioner's nomination paper by holding him disqualified under Section 52-A is without any legal basis and is clearly invalid. ( 11 ) IN the view which we have taken, the decision of the respondent no. 1 Returning Officer holding the petitioner as disqualified under Section 50-A of the Act and thereby rejecting his nomination paper, cannot be sustained in law and deserves to be quashed. ( 12 ) IN the result this petition succeeds and is hereby allowed. The decision of respondent No. 1 Returning Officer rejecting the nomination paper of the petitioner is quashed. The order giving reason for rejection endorsed by the respondent No. 1 on petitioner's application (Annexure P-VI)is also quashed. There being no other reason disclosed apart from the invalid reason recorded in Annexure P-VI to the petition for rejecting the nomination paper of the petitioner, the petitioner must be held to have been validly nominated to contest the election to the Executive Committee of the respondent No. 2 Society. It has been stated by the learned Dy. Advocate General appearing for the respondent No. 1 that the elections were stayed by respondent No. 1 in the interest of justice. It is, therefore, directed that the respondent No. 1 will now proceed ahead with the elections of the validity nominated candidates including the petitioner. It has been stated by the learned Dy. Advocate General appearing for the respondent No. 1 that the elections were stayed by respondent No. 1 in the interest of justice. It is, therefore, directed that the respondent No. 1 will now proceed ahead with the elections of the validity nominated candidates including the petitioner. In the circumstances of the case, there shall, However, be no order as to costs. Petition allowed. .