APPA SAHEB, R. KERAKALAMATTI Vs. ADDITIONAL REGISTRAR OF CO-OPERATIVE SOCIETIES IN KARNATAKA AND OTHERS

JUDGEMENT

(1.) IN this petition in which the petitioner has prayed for quashing the order of the Joint Registrar of Co -operative Societies made under Section 126 -A of the Karnataka Co -operative Societies Act, 1959 ('the Act' for short) removing him from the membership of the committee of management of Bijapur District Central Co -operative Bank and disqualifying him from holding any office in the Bank as also in any other co -operative society, for a period of three years, which has been confirmed in appeal by the Additional Registrar of Co -operative Societies, the following question of law arises for consideration -

(2.) THE facts of the case, in brief, are as follows: The Bijapur District Central Cooperative Bank, Bijapur, is a Society functioning under the provisions of the Karnataka Co -operative Societies Act, 1959 ('the Act' for short). The petitioner was a member of the Executive Committee of the Bank. He was also a member of the Loan Subcommittee. In the executive committee meeting of the Bank held on 14 -12 -1983, a decision was taken to grant extension of time for three months from 1 -12 -1983 for repayment of 41 loans of 34 societies involving an amount of Rs. 67,35,504/ -. Bye -law No. 39 of the Bank reads - "39. The period of loans shall be as under - (1) Short term loans In case of loans given to member societies for seasonal agricultural operations, the period of repayment shall be limited to harvesting season of the crop for the raising of which the loan is given; in other cases, the period shall not be more than one year or the harvesting season of the principal crop of the area. (2) Intermediate loans: The period shall not exceed five years. (3) Loans to Nominal Members: The period shall not exceed nine months. The Executive Committee or the Board of Directors shall specify period of loans in each case on the basis of the above at the time of sanctioning loans. The executive committee, if so authorised by the Board, shall have power to grant extension of time for repayment of loans in exceptional circumstances before the repayment falls due". According the above bye -law, extension of time could be granted in exceptional circumstances and only before repayment fell due. The extension granted by the Committee on 14 -12 -1983 were in cases in which not only there were no exceptional circumstances but also the loan had become overdue.

(3.) THE Joint Registrar of Co -operative Societies, Belgaum, was of the view that the giving of three months time to repay the loans after the 34 societies had become defaulters, by the resolution of the Executive Committee on 14 -12 -1983 and the sanctioning of loans and adjusting the same towards Short Term and Medium Term loan accounts of the respective societies, by the Loans Sub -Committee on 14th December 1983, were done with the intention of excluding those societies from the defaulters list and for the purpose of the election at the general body meeting and lacked in bona fides. Therefore, the Joint Registrar was of the view that members of the Executive Committee as well as the members of the Loans Sub -Committee were guilty of committing acts prejudicial to the interest of the Bank. He initiated action under Section 126 -A of the Act against all the members, who were parties to the resolution. The petitioner was a member of both the Executive Committee and of the Loans Sub -Committee. Show -cause notice was issued to the petitioner calling upon him to furnish his explanation to the action proposed. The petitioner submitted his written statement contending that no action under Section 126 -A of the Act was permissible. The objection was overruled by the Joint Registrar. He made the impugned order on 17 -3 -1984. By that order, the petitioner was disqualified for serving on the committees of management of the Bank and also holding any office in any other co -operative society for a period of three years from the date of the said order. Aggrieved by the said order, the petitioner presented an appeal before the Additional Registrar. Before the appellate authority, the contention of the petitioner was that he had not committed any act contrary to the provisions of the Act fraudulently or otherwise individually, so as to incur a disqualification for holding office tinder the Bank or under any other society and the act complained of was an act of the committee of which the petitioner was a member and that Section 126 -A did not authorise the taking of action against a member of the committee for the act done by the committee. This plea was rejected by the appellate authority. The relevant part of the appellate order reads -