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2000 DIGILAW 444 (ORI)

RABINARAYAN NANDA v. STATE OF ORISSA

2000-09-08

L.MOHAPATRA, PRADIPTA RAY

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JUDGMENT : L. Mahapatra, J. - The petitioner in this writ application has sought for a direction to the opposite parties not to disturb the petitioner's status and right in the Ranpurgarh Service Cooperative Society Limited (hereinafter referred to as 'Society') by quashing Annexures 2 and 4. 2. The case of the petitioner is that he is the President of the Managing Committee of the Society which is a primary society. Having been elected, the committee resumed office in September, 1997. The opposite party No. 2 is the Secretary of the Society. The petitioner applied for a loan for agricultural operation of high yielding variety of paddy during the agricultural year 1999-2000. The Society is affiliated to Khurda Central Co-operative Bank Ltd. The primary society sanctioned Rs. 28,000/- on 31.3.1999 fixing the repayment dates to 15.6.1999, 28.2.2000 and 15.6.2000. Rs. 9,200/-was disbursed to the petitioner on 31.3.1999, Rs. 10,000/- on-1.6.1999, Rs.1,100/- on 29.9.1999 and the balance Rs. 7,700/- on 24.12.1999. Opposite party No. 2 issued a demand notice on 12.6.1999, that is, 3 days prior to the first instalment of Rs. 9,895/- fell due for repayment. The petitioner paid Rs. 10,765/- on 22.12.1999. In spite of such payment the Assistant Registrar, Cooperative Societies, Nayagarh, having no power under the provisions of the Orissa Cooperative Societies Act, 1962 (for short 'the Act') and knowing fully well that opposite party No.2 is not a functionary to determine default and disqualification, wrote a letter to opposite party No. 2 on 3.12.1999 instructing him to issue demand notice and take action if the petitioner fails to pay the dues. Pursuant to the same on 16.12.1999 opposite party No.2 intimated the petitioner by way of a notice that having defaulted in payment of the instalment, the petitioner is disqualified to continue as Member of the Society. 3. Shri M.Mallick learned counsel appearing for the petitioner, submitted that there is no default in payment of the instalments and therefore, the question of declaring the petitioner defaulter does not arise. He further submitted that no authority under the statute is empowered to declare the petitioner defaulter and consequently no order can be passed to the effect that the petitioner ceased to continue as a Member of the Committee on the ground of default resulting in disqualification. 4. He further submitted that no authority under the statute is empowered to declare the petitioner defaulter and consequently no order can be passed to the effect that the petitioner ceased to continue as a Member of the Committee on the ground of default resulting in disqualification. 4. Counter has been filed by opposite party No.2 - Secretary of the Society, wherein it is stated that after becoming a Member of the Society the petitioner was elected as the President in the year 1997. While continuing as such, the petitioner submitted an application before the Secretary of the Society on 30.12.1998 for grant of loan for cultivation of high yielding paddy and accordingly loan to the tune of Rs.9.200/-was sanctioned by the Society and the same was taken by the petitioner for cultivation. The same was required to be paid back on or before 15.6.1999 with interest at the rate of 16.5 percent. The petitioner having failed to pay the amount within the time, he was requested to pay the dues. Although the petitioner received the notice, he remained silent and again he was informed on 6.8.1999 to pay the dues. He was also intimated that if the dues are not paid, appropriate action shall be taken against him. Since the petitioner again failed to pay, the said fact was intimated by the financing bank to the Society on 23.12.1999. Due to failure on the part of the petitioner in payment of the dues, the Society issued notice on 16.12.1999 informing the petitioner that due to non-payment of the dues within the stipulated time, he is disqualified to be a member of the Society as per Section 28(3)(e) of the Act. 5. Coming to the first question raised by the learned counsel for the petitioner, from the writ application as well as from the counter filed by opposite party No.2 it appears that there is no dispute about payment of the first instalment of Rs. 9,200/- to the petitioner which was required to be paid back by 15.6.1999 with interest @ 16.5 per cent. As admitted in paragraph 5 of the writ application the petitioner did not pay the dues on or before 15.6.1999 and paid Rs. 10,765/- on 22.12.1999, that is, about six months after the due date. 9,200/- to the petitioner which was required to be paid back by 15.6.1999 with interest @ 16.5 per cent. As admitted in paragraph 5 of the writ application the petitioner did not pay the dues on or before 15.6.1999 and paid Rs. 10,765/- on 22.12.1999, that is, about six months after the due date. In view of such statement made in the petition as well as in the counter affidavit, there could be no doubt that the petitioner though was required to pay the first instalment on or before 16.6.1999, failed to deposit the same and paid Rs. 10,765/- on 22.12.1999. On this ground it is to be seen whether failure to pay the dues on 15.6.1999 has resulted in disqualification of the petitioner so as to continue as a member of the Society. 6. Section 28(3)(e) of the Act runs as follows : "xx xx xx (3) No individual shall, whether by himself or as a representative of the Society, be eligible for being chosen or for continuing as a member or the President or as the Vice-President of any of the Committee of a Society, if he - xx xx xx (e) has failed to pay any amount due, whether in cash or in kind, to the Society; its Financing Bank, or any other Society, on account of any loan or otherwise within three months from the date of notice by the Society or the Financing Bank concerned for payment of such dues : Provided that nothing in this clause shall debar any such person from being chosen as member or President if he makes payment of the dues before the date of filing his nomination at an election of any Society;" The said provision prescribes that no individual shall, whether by himself or as a representative of the Society, be eligible for being chosen or for continuing as a member or the President of the Committee of a Society, if he has failed to pay any amount due, whether in cash or kind, to the Society; its Financing Bank, or any other Society, on account of any loan or otherwise within three months from the date of notice by the Society or the Financing Bank concerned for payment of such dues. From the counter affidavit it appears that the first notice for payment of the dues was given by opposite party No.2 on 12.6.1999, that is, three days prior to the due date. This fact is also admitted in the writ application. The second demand notice was issued to the petitioner on 6.8.1999 and three months' period from that date expired on 6.11.1999. Within the said period of three months also the amount was not paid and as admitted in paragraph 5 of the writ application, the dues were paid on 22.12.1999. Therefore, as per Section 28(3)(e) the petitioner having failed to pay the dues, became ineligible for continuing' as a member or President of the Committee of the Society. Shri Mallick raised a question as to who is the authority to decide and pass an order u/s 28{3)(e) of the Act. According to him, the statute is silent about the same and no authority is prescribed to make such declaration and therefore, notice issued by opposite party No.2 intimating the petitioner that he had ceased to be a member of the Society due to non-payment of the dues of the Bank, is without jurisdiction. A plain reading of the statute answers the question raised by the petitioner. The provision clearly says that no individual, whether by himself or as a representative of the Society, be eligible for being chosen or for continuing as a member or the President of the Committee of a Society, if he has failed to pay any amount due, on account of any loan or otherwise, within three months from the date of notice by the Society or Financing Bank concerned for payment of such dues. The Section is so clear and unambiguous that it does not require any determination. The moment a member or President of the Committee of a Society fails to pay the amount due within three months from the date of notice by the Society or the Financing Bank, he automatically incurs disqualification and ceases to continue as a member or President of the Committee of a Society. It is not necessary for any authority to pass any order declaring the defaulter to have ceased to continue as a member or President of the Committee of a Society. It is not necessary for any authority to pass any order declaring the defaulter to have ceased to continue as a member or President of the Committee of a Society. The disqualification is automatic and therefore, the concerned member or President of the Committee of the Society ceases to be a member or President from the date of incurring disqualification. A person disqualified is also not without a remedy, if he has any genuine dispute. A person upon receipt of notice of demand may raise- a dispute u/s 68 of the Act to avoid the consequences of non-payment of dues by making out a prima facie triable case therein. 7. Shri Mallick, the learned counsel appearing for the petitioner, further submitted that principles of natural justice having not been followed before declaring the petitioner disqualified and passing of the order in Annexure-4. He further submitted that non-payment of the demand is not a ground for disqualification. Shri Mallick referred to the decisions of this Court reported in 73 (1992) CLT 308 : Somanath Prusty v. Director of Textiles, Orissa; and 80 (1995) CLT 765 : Manoranjan Sahoo v. Chandra Kumar Purohit. In the decision reported in 73 (1992) CLT 308 (supra), this Court held that before removal of a member or President of the Committee of the Society, a notice is required to be served and an opportunity must be given to the concerned member or President. In the present case admittedly a notice was given to the petitioner for payment of the dues on 12.6.1999 and as it appears from the counter the second notice was given on 6.8.1999, wherein it was stated that the petitioner had defaulted in payment of the dues and was requested to make the payment immediately. Therefore, the petitioner now cannot say that he was not given notice prior to the order passed in Annexure-4. The decision reported in 80 (1995) CLT 765 (supra) has no application to the facts of this case as the amount due was in dispute and therefore, without determination of the dues by the competent authority disqualification could not have taken place for default prior to determination of the amount by a competent authority. In the present case there is no dispute about the fact that the petitioner was liable to pay Rs. In the present case there is no dispute about the fact that the petitioner was liable to pay Rs. 9,200/- with interest on or before 15.6.1999 and in spite of notice dated 6.8.1999 he did not pay the amount within three months from the date of receipt of the notice and as admitted by the petitioner in paragraph 5 of the writ application Rs. 10,765/- was paid only on 22.12.1999, that is, after expiry of 3 months from the date of notice dated 6.8.1999. The other decisions cited by the learned counsel for petitioner have no application to the facts of the present case. 8. We, therefore, considering the facts and circumstances of the case and taking into consideration the provisions of law involved, hold that for non-payment of the dues within the prescribed period, the petitioner incurred disqualification automatically and ceased to continue as a member or President of the Committee of the Society on the date of incurring such disqulification. The order in Annexure-4 is only an intimation to the petitioner that he has incurred disqualification and ceased to be a member/President of the Committee of the Society, Therefore, we do not find any merit in the writ application and the same is dismissed. Pradipta Ray, J. 9. I. agree. Final Result : Dismissed