R. Rajendiran v. Deputy Registrar of Co-operative Societies
1999-01-30
S.S.SUBRAMANI
body1999
DigiLaw.ai
ORDER All the writ petitioners seek similar relief i.e., to issue a writ of certiorari or any other appropriate writ, direction or order in the nature of writ calling for the records relating to the proceedings of first respondent made in Na.Ka.6788/Ku.Visa, dated 1.12.1998 and quash the same in so far as petitioners are concerned and pass such further orders. 2. All these petitioners are members of ZA 98 Vadmattam Primary Agricultural Co-operative Bank and they got elected to the Board of Directors on 30.10.1996. All these petitioners have obtained loan from society on various dates. 3. First respondent issued notice on 23.10.1998 asking them to show cause why they should not be disqualified under Sec.35(6) of Tamil Nadu Co-operative Societies Act as there is default in making payment of installments of loan secured from society. Petitioners submitted their representation stating that the dues to loan were already settled long before show cause notice and Registrar has no cause of action to disqualify them. By the impugned order, first respondent said that since there is delay in making payment they are liable to be disqualified. 4. In the various grounds taken it is said that once dues have been settled, there is no cause of action for respondent to issue show cause notice and under Sec.34(1)(b), they are not liable to be disqualified. It is said that on the date of action, they are not in default and therefore not liable to be disqualified. It is further said that jurisdiction of Registrar under Sec.34(1)(b) arise only when Board refuses to initiate any action. Conditions of Sec.34(1)(b) is also not complied with by Registrar. It prayed for quashing all the impugned orders. 5. Common counter-affidavit has been filed by respondents. It is admitted in the counter-affidavit that before show cause notice are issued, all these loans have been settled. But, since there was delay in making payment, they are liable to be proceeded with. 6. After hearing counsel on both sides I do not think that the proceedings initiated by respondents could be sustained. 7. Relevant portion of Sec.34 of Tamil Nadu Co-operative Societies Act read thus, “Sec.34(1): No person shall be eligible for being elected or nominated as a member of a board of any registered society if he (a) omitted.
6. After hearing counsel on both sides I do not think that the proceedings initiated by respondents could be sustained. 7. Relevant portion of Sec.34 of Tamil Nadu Co-operative Societies Act read thus, “Sec.34(1): No person shall be eligible for being elected or nominated as a member of a board of any registered society if he (a) omitted. (b) (i) is in default to such registered society or any other registered society, in respect of any loan or advance taken by him or dues under credit purchases made by him for a period exceeding three months.” 8. In T.T.Sivashanmugham v. The Registrar of Co-operative Societies T.T.Sivashanmugham v. The Registrar of Co-operative Societies T.T.Sivashanmugham v. The Registrar of Co-operative Societies, 99 L.W. 400 a similar question came for consideration. Justice Nainar Sundaram (as he then was) had occasion to consider a similar provision of earlier Act 1961, Sec.28(1) of 1961 Act is corresponding to Sec.34(1)(b) of the present Act, Learned Judge after extracting relevant portion of section, held thus, “By the proceedings dated 7th August, 1985 of the second respondent, the petitioner has been held to have suffered a disqualification on the ground that he was in default to the society in question. The provision invoked is Sec.28(1)(b)(i) of the Tamil Nadu Co-operative Societies Act (53 of 1961), hereinafter referred to as ‘the Act’, The said provisions reads as follows: ‘28(1) No person shall be eligible for being elected or appointed as a member of a committee if he- (b) (i) is in default to the society or to any other registered society in respect of any loan or loans taken by him for such period as is prescribed in the by-laws of the society concerned or in any case for a period exceeding three moths:” The rule invoked by the second respondent to exercise the power of removal is Rule 40 of the Rules framed under the Act. The show cause was issued on 8th April, 1985. The default relates to February, 1980. Admittedly, the dues have been collected in December, 1980. Hence either on the date of the show cause or on the date of the passing of the order by the second respondent, the petitioner could not be held to be in default to the society in question within the meaning of the said provision.
The default relates to February, 1980. Admittedly, the dues have been collected in December, 1980. Hence either on the date of the show cause or on the date of the passing of the order by the second respondent, the petitioner could not be held to be in default to the society in question within the meaning of the said provision. The set of expressions used in the provision extracted above is “is in default to the society”. Sec.28(2)(a) merely says that a member of the committee shall cease to hold office, if he becomes subject to any of the disqualifications mentioned in Sub-sec.(1). If a member of the committee “is in default to the society” within the meaning of Sec.28(1)(b)(i) of the Act, on the date of the initiation of the action under Rule 40, the exercise of the power to removal may be held to be competent. We can take it that if on the date of the show cause, namely, on 8th April, 1985, the petitioner was in default within the meaning of Sec.28(1)(i) and if there was a clearance of the dues only after the show cause and before the passing of the order, that may not bring him any amelioration with regard to the default. Such view has been exercised by Kailasam, J., (as he then was). In Ramakrishna Reddiar v. The Deputy Registrar. But here long before the date of the show cause, namely 8th April, 1985, the petitioner had cleared the dues, and he could not be held to have had been in default to the society in question, on the date of initiation of action. hence it is not possible to bring the matter within the ambit of Secs.28(1)(b)(i) and 28(2) (a) of the Act. … …” 9. I also had occasion to consider similar question, which is reported in Soundararajan v. The Government of Tamil Nadu, (1998)2 MLJ. 485 . 10. At this juncture, learned Government Pleader submitted that there was earlier show cause notice on 15.12.1997 and it was only there-after loan was paid. Therefore, they have got cause of action. 11. I cannot accept this argument for two reasons, In the present show cause notice, there is no reference to earlier show cause notice and there is also no material placed before this Court to the effect that such a notice is issued.
Therefore, they have got cause of action. 11. I cannot accept this argument for two reasons, In the present show cause notice, there is no reference to earlier show cause notice and there is also no material placed before this Court to the effect that such a notice is issued. Even in the counter-affidavit, there is no reference to earlier show cause notice. That apart, even assuming there was show cause notice, respondent has not proceeded on the same till date. They must have deemed to have waived their right under that show cause notice. 12. Learned Government Pleader submitted that under Rule 40 of Tamil Nadu Co-operative Societies Act, 1963, Registrar is given suo motu power for removal of member of the committee of a society, if in his opinion such member is, was or has become disqualified to continue as a member thereof under Sub-secs.(1), (2), (3), (4) or (5) of Sec.28. The argument was effect of this rule was not considered in the decision though the same was incorporated as early as in 1976. 13. I do not think that the submission could be accepted. Rules cannot go against the clear wordings in the Act. Permitting Registrar to take action on the ground that petitioner was disqualified is inconsistent to the wordings in Sec.28(1)(b) and to that extend the rule is invalid. Apart from the same, I do not think that sub-rule has any relevance as on this date. There is no corresponding rule to Rule 40 of the Present Act. Power of Registrar to take action is now provided under Sec.34(6) of the Act. A reading of that sub-section shows that provisions of Sec.34(1)(b) will have to be satisfied. That sub-section only enables the Registrar to take certain action on certain circumstances. 14. Rule 35 of the Present Rules empowers Registrar to remove a member of Society, if, in his opinion such member is or has become subject to any disqualification mentioned in Sec.23. Reasons for disqualification under Sec.23 are entirely different. Hence, Rules 35 also will have no application to the facts of this case. 15. This being disputed question of fact, respondent, ought to have pleaded and proved that there was previous show cause notice and the same was acted upon. As I said earlier, counter do not disclose any prior show cause notice nor present show cause notice refers to the earlier one.
15. This being disputed question of fact, respondent, ought to have pleaded and proved that there was previous show cause notice and the same was acted upon. As I said earlier, counter do not disclose any prior show cause notice nor present show cause notice refers to the earlier one. 16. Respondent is further barred from taking any ground other than that is referred to in the impugned order. They have to justify their action on the basis of reasons mentioned in the impugned order. They cannot justify their action for some reasons which are not disclosed therein validity of order will have to be considered only on the basis of reasons referred to in the impugned order. Therefore, contention of learned Government Pleader is without merit. 17. In the result, impugned orders are quashed. All the writ petitions are allowed. No costs. Consequently, connected writ miscellaneous petitions are closed. Petitions allowed.