Salim v. Joint Registrar — 1998 DIGILAW 346 (KER)

Judgment :- K.S. Radhakrishnan, J. Petitioners are aggrieved by the action of the second respondent, Returning Officer, in accepting the nomination of respondents 3 to 5 for election to the Board of Directors of the Kandala Service Co-operative Bank Ltd. 2. Ext. P1 is the election notification issued for conducting election to the above mentioned Co-operative bank. As per the notification seven persons have to be elected and election is on ward basis as there are seven wards for the bank. Date fixed for submission of notification was 2.7.1998 and 3.7.1998 was the date fixed for scrutiny of nominations. Petitioners submitted their nominations. First petitioner and third respondent submitted nominations to contest from Kandala 'A' ward. Second petitioner and fourth respondent submitted nominations to contest from Aruvikara'A' ward and third petitioner and 5th respondent submitted nominations to contest from Aruvikara 'B' ward. 3. Returning Officer published a list of persons who submitted nominations as on 2.7.1998. Secretary of the bank has submitted a written list of candidates having liability/ arrears to the bank. List contained the names of respondents 3 to 5. Respondents 3 to 5 were shown at SI. Nos. 4,7 and 10. List submitted by the Secretary to the Returning Officer would show that 11 persons have got subsisting liability towards bank, including respondents 3 to 5. 4. Returning Officer scrutinised the nomination on 3.7.1998. Petitioners objected to the inclusion of respondents 3 to 5 in the final list. Returning Officer overruled the objections and also accepted the nominations of respondents 3 to 5. Later Returning Officer published final list of candidates whose nominations were accepted, which includes respondents 3 to 5. 5. Complaint of the petitioners is that inspite of the fact that Secretary submitted a written list of persons who have liability to the bank, including respondents 3 to 5, and the relevant documents evidencing disqualification, Returning Officer did not consider those materials and accepted the nominations of respondents 3 to 5. Counsel for the petitioners relied on R.4(1)(c) of the Kerala Co-operative Societies Rules and contended that since respondents 3 to 5 stood as sureties and failed to remit the amount, inspite of notice, they are disqualified from standing for election. Reliance was also placed on R.35(3)(d) and contended that no member shall be nominated if the person is disqualified to be a member of the committee. Reliance was also placed on R.35(3)(d) and contended that no member shall be nominated if the person is disqualified to be a member of the committee. Decision of this Court in Thankappan v. Co-operative Tribunal, 1979 KLT528 was also cited by counsel. According to him, Returning Officer is bound to comply with the provisions of R.35 read with R.44(1)(c) of the Rules, failing which the entire election will have to be declared as void. 6. Counter affidavit has been filed on behalf of respondents 3 to 5. According to them, they have not received any notice directing them to clear-off the loan amount as provided in the second proviso to R.44(2)(a). Counsel contended due to lack of notice no reliance could be placed on the documents produced by the petitioners as well as the sixth respondent. As far as fourth respondent is concerned, counsel contended, he never stood as surety for member No. 2591. Counsel also relied on the decision of this Court in Ravi v. Kottayam Co-operative Urban Bank Ltd. 1993 (1) KLT 644, and contended that without issuing notice to the sureties, bank or the Returning Officer cannot disqualify them under R.44(1)(c). 7. Counter affidavit has been filed by the sixth respondent as well. Sixth respondent submitted that notices were issued to respondents 3 to 5 by registered post. He has produced Exts. R6(a) to (d) to establish that notices as contemplated under the Rules were issued to respondents 3 to 5. Counter affidavit further states that registered notice was sent to third respondent on 3.6.1997. Registered notice was also sent to the fourth respondent on 13.4.1998. So also to the fifth respondent on 4.3.1991.4.7.1992, 12.8.1992, 9.5.1997 and 5.10.1997. 8. A statement has been filed on behalf of the second respondent, Returning Officer. It says that Returning Officer perused the documents produced before him by the Secretary of the bank, and there was nothing to show that registered notices were issued to respondents 3 to 5 to disqualify them from contesting the election. 9. Dispute in this case centres round the question as to whether a notice as contemplated under the second proviso to R.44(2) (a) of the Rules has been sent to respondents 3 to 5. Counsel for respondents 3 to 5 submitted that they stood as sureties and therefore, notice is necessarily to be sent as per the above mentioned proviso. 9. Dispute in this case centres round the question as to whether a notice as contemplated under the second proviso to R.44(2) (a) of the Rules has been sent to respondents 3 to 5. Counsel for respondents 3 to 5 submitted that they stood as sureties and therefore, notice is necessarily to be sent as per the above mentioned proviso. The relevant rule and the proviso are extracted below for easy reference: "44. Disqualification of 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, as4s prescribed in the bye-laws 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-r.(1), provided,.... Provided further that the disqualification under sub-clause(i) of clause(c)of sub-r.(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 specified therein and he fails to remit or cause to remit the amount within the said period; or" (emphasis supplied) 10. Under the scheme of the Act and Rules, a notice under the above mentioned proviso is to be sent only to the surety and not to the principal debtor. As far as the principal debtor is concerned, it is his duty to see that he clears off the loan amount and free from default, if he wants to stand for election. As far as the surety is concerned, R.44 gives one month's time to such persons to clear off the debt, after receipt of notice from the society demanding him to clear off the defaulted amount. As far as the surety is concerned, R.44 gives one month's time to such persons to clear off the debt, after receipt of notice from the society demanding him to clear off the defaulted amount. Therefore, a surety will be disqualified from contesting the election only after the expiry of one month from the date of receipt of a notice from the society, and on failure to clear off the defaulted amount within one month from the date of receipt of the notice. 11. Relying on S.104 of the Act counsel for the petitioners contended that every notice or order issued or made under the Act may be served on any person by properly addressing it to the last known place of residence or business of such person preparing and posting by registered post a letter containing a notice or order, and unless the contrary is proved, such service shall be deemed to have been effected at the time at which the letter would be delivered in the ordinary course. Counsel further submitted that there is no obligation on the part of the society to send the notice by registered post acknowledgment due. Section only authorises the society to send a notice by registered post. According to him, the moment it is established that a registered letter was sent to the surety, the burden is on the surety to prove that he has not received such a letter. Counsel submitted that the postal receipt received from the post office evidencing sending a registered notice would conclusively prove that such a letter has been sent. Counsel relied on the decision of this Court in Naramganain Service Co-operative Society v. Radhakrishnan Nair, 1998 (2) KLT 837. and contended that sending a notice by registered post would suffice. 12. I am of the view that contention of counsel for the petitioners, Sri. Somasundaram, with regard to i interpretation of S.104 read with the second proviso to R.44(2)(a) cannot be accepted. Learned Government Pleader, Smt. Preethy Ramakrishnan, is right in her contention that only if the letter is sent by registered post acknowledgement due, it would be possible to ascertain as to when the surety has become disqualified, especially in a case where the surety denies the receipt of the letter from the society. Learned Government Pleader, Smt. Preethy Ramakrishnan, is right in her contention that only if the letter is sent by registered post acknowledgement due, it would be possible to ascertain as to when the surety has become disqualified, especially in a case where the surety denies the receipt of the letter from the society. She relied on the words "shall be deemed to be accrued only after expiry of a period of one month from the date of receipt". In other words, disqualification under R.44(1)(c)(i) shall be deemed to be accrued only after expiry of one month from the date of receipt by the member concerned of a notice from the society. When the surety denies the receipt of a notice under the second proviso to R.44(2)(a), burden is on the petitioners who allege disqualification to establish that surety has received notice on a particular date and even after the expiry of 30 days from that date, surety failed to clear-off the defaulted amount. 13. Analysing S.104 read with R.44(1)(c)(i) and the second proviso to R.44(2)(a), I am of the view that the burden is on the persons who allege disqualification to prove the date of receipt of notice by the surety, and the surety did not pay within 30 days from the date of receipt of notice. In the instant case, respondents 3 to 5 denial receipt of any registered notice. Therefore, the burden is not on the sureties, but. on the person who alleges disqualification to establish that surety received notice on a particular date, and that he has not cleared off the amount within the statutory time as provided in the above mentioned proviso. Petitioners have not succeeded in discharging that burden. 14. In the above mentioned circumstances, I do not find any reason to interfere with the decision taken by the second respondent to accept the nominations of respondents 3 to 5. Original Petition lacks merits and the same is dismissed.