Karnataka High Court
The Tumkur Grain Merchants ... vs K.B. Lingaraju And Ors. on 24 October, 2005
Equivalent citations: ILR2005KAR5673, 2005(6)KARLJ481
Author: H.L. Dattu
Bench: H.L. Dattu, H.N. Nagamohan Das
JUDGMENT H.L. Dattu, J.
1. Just a simple question of law would arise in this appeal for our determination.
2. The appellant before us is a society registered under the provisions of the Karnataka Co-operative Societies Act, 1959 (hereinafter for the sake of brevity and clarity refereed to as "Act, 1959"). The 1st respondent before us is a member of the appellant bank. While he was the member of the 1st appellant bank, he also became a member of the 3rd respondent bank.
3. The appellant bank had approached the Joint Registrar of Co-operative Societies, Bangalore, to invoke the provisions of Section 17 of the Act and to disqualify the 1st Respondent herein as a member of the appellant bank. By an order made on 13.3.2003, the Joint Registrar of Co-operative Societies-2nd respondent herein had accepted the request of the appellant bank and had disqualified the 1st respondent as a member of the appellant bank. Aggrieved by this action of the 2nd respondent, the 1st respondent was before this Court in WP.No. 35194/2003.
4. This Court after a detailed consideration of the fact situation and the question of law involved in the Writ Petition, was pleased to allow the Writ Petition and was further pleased to set aside the order passed by the Joint Registrar of Co-operative Societies dated 13.3.2003 and further declared that the 1st respondent is disqualified as a member of the 3rd respondent bank and not as the member of the appellant bank. Aggrieved by the findings and the conclusions so reached by the Learned Single Judge, the appellant bank is before this Court.
5. We do not intend to deal with the fact situation. The only legal issue that requires to be decided by this Court is with regard to the interpretation that could be placed on Section 17 of the Co-operative Societies Act. Therefore, omitting what is not necessary, the provisions of Section 17 of the Act are extracted and they read as under:
"17. Disqualification for Membership: (1) No person shall be eligible for admission as a member of a cooperative society, if he-
(a) has applied to be adjudicated an insolvent or is an undischarged insolvent; or
(b) has been sentenced for any offence, other than an offence of a political character or an offence not involving moral turpitude, such sentence not having been reversed or the offence pardoned and a period of five years has not elapsed from the date of expiry of the sentence;
(c) carries on or any of his near relation carries on business of the kind carried on by such co-operative society.
Explanation: The expression 'near relation' shall have the same meaning assigned to it in the explanation to Clause (f) of Sub-section (1) of Section 29-C.
(d) is already a member of a co-operative society carrying on business of the same kind as itself.
(2) If a member becomes subject to any of the disqualifications specified in Sub-section (1), he shall be deemed to have ceased to be a member from the date when the disqualification was incurred."
6. A reading of the aforesaid provisions would indicate that, a person is ineligible for admission as a member of a co-operative society, if he has incurred any disqualification as envisaged under Clauses (a) to (d) of Sub-section (1) of Section 17 of the Act. For our purpose, Clause (d) of Sub-section (1) of Section 17 of the Act is relevant. It says, that, if a person is already a member of a cooperative society carrying on business of the same kind as itself; then that person is ineligible for admission as a member of a co-operative society.
Sub-section (2) of Section 17 of the Act states that, if a member is subjected to the disqualifications specified in Clause (a) to (d) of Sub-section (1) of Section 17 of the Act, he shall be deemed to have ceased to be a member from the date when the disqualification has incurred.
The legislature knowingly has used the expression "deemed" to deem that, a person who has acquired the disqualifications, which are contemplated under Clauses (a) to (d) of Sub-section (1) of Section 17 of the Act, is ineligible to be a member of the other society. This is all that we see in Section 17 of the Act.
7. However, Sri P.D. Surana, Learned Counsel for the appellant would submit that, if the interpretation placed by the Learned Single Judge is accepted, then the purpose of the provisions of Section 17 of the Act would be defeated or frustrated. Apart from others, the Learned Counsel would also submit that the expression used under Section 17(2) of the Act, he shall be deemed to have ceased to be member, in the sense, first and foremost, he should be a member and then only his membership would cease, if he has acquired the disqualification envisaged in Clauses (a) to (d) of Sub-section (1) of Section 17 of the Act.
8. At the first blush, the submission of the Learned Counsel for the appellant looks attractive, but on a deeper consideration of the matter, in our opinion, it has no merit whatsoever. In our opinion, since under Section 17 of the Act, the legislature has put an embargo to suggest that, no person is eligible for admission, if he is already a member of the co-operative society carrying on the business of the same kind as the appellant bank. In that view of the matter, in our opinion, the learned Single Judge is justified in coming to the conclusion that, in the present case, the 1st respondent is disqualified not as a member of the appellant bank, but as a member of the 3rd respondent bank.
9. In view of the above, we do not see any good grounds in the appeal and therefore, the appeal is rejected. Ordered accordingly.