THE HON’BLE SRI JUSTICE C.V.RAMULU W.P.No.27713 of 2007 ORDER: This writ petition is filed seeking a Mandamus declaring the action of the first respondent in issuing notice vide Rc.No.3430/07/E dated 14.12.2007 under Section 34-A of the A.P. Cooperative Societies Act, 1964 without considering the cessation of second respondent as Director of Chinthalapadu Primary Agricultural Cooperative Society as arbitrary, illegal and violative of provisions of A.P. Cooperative Societies Act and the Rules made thereunder and consequently set aside the same. According to the petitioner, he was elected as President of Chinthalapadu Primary Agricultural Cooperative Society on 9.11.2005. The second respondent was also elected as Director of the Society along with him. Second respondent stood as surety to one Kama Subba Rao towards Loan Account No.224 for an amount of Rs.25,000/- for Sheep rearing purpose on 10.2.2006. The loan was due by 9.2.2007. Second respondent was given notices on 5.2.2007 and 20.2.2007 asking him to pay the amounts due to the Society, failing which he will be disqualified under the provisions of the Act. The second respondent did not respond to said notices. Though the loan was redeemed on 30.11.2007, the second respondent ceased to hold the post of Director of the Society under Section 21-A(b) of the A.P. Cooperative Societies Act, 1964 (for short ‘the Act’). Section 21-A provides that a member of the Managing Committee, if he is in default, for a period exceeding three months, he shall be disqualified. The loan given to Kama Subba Rao, to whom the second respondent stood as surety, fell due on 9.2.2007. The original loanee or the second respondent ought to have cleared the loan by 9.2.2007 or three months thereafter, as contemplated under the above provision of law. The loan was paid much later i.e. on 30.11.2007. Further, the Managing Committee of the society passed a resolution on 3.11.2007 disqualifying the second respondent as he fell in due to the society, as contemplated under Section 21-A(b) of the Act read with Rule 24 of the A.P. Cooperative Societies Rules, 1964 (for short ‘the Rules’). Based on the complaints made by some of the members of the managing committee, first respondent issued notice dated 7.12.2007 to the petitioner for production of minutes book, general ledger and cashbook on 12.12.2007. Petitioner, along with the said records addressed a letter dated 12.12.2007 to the first respondent informing about the cessation of second respondent to hold the office, which was acknowledged by him on the same day. According to the petitioner, the first respondent, without considering the same, issued impugned notice dated 14.12.2007 under Section 34-A of the Act informing that nine members of managing committee of Chintalapadu PACS have decided to move no confidence against the petitioner, therefore an extraordinary meeting of the managing committee was fixed on 2.1.2008 at 11.00 a.m. at the seat of the society to consider the ‘no confidence motion’. The said notice was received by the petitioner on 16.12.2007. According to the petitioner, the impugned notice issued by the first respondent on 14.12.2007 under Section 34-A of the Act was not accompanied by letter of ‘no confidence motion’ moved by some of the Directors. Petitioner was not aware of the contents of the said no confidence motion. The Act contemplates debate on the motion and if the petitioner is not provided with the copy of no confidence motion, he will not be in a position to contest the same. Hence this writ petition. A detailed counter affidavit has been filed by the first respondent stating that it is a fact that the petitioner was elected as President of Chinthalapadu Primary Agricultural Cooperative Society and the second respondent was also elected as one of the Directors of the society along with others. With regard to disqualification of second respondent, on the ground that he stood as surety to one Kama Subba Rao towards sheep loan and the said loan was due by 9.2.2007 was concerned, it is stated that the society had given loan amount of Rs.25,000/- to Kama Subba Rao on 10.2.2006 and the said loan was to be repaid within a period of one year and the said loan was not repaid by the loanee before the due date. Further, the record discloses that the managing committee passed resolution No.4 dated 3.11.2007 resolving to disqualify the second respondent as per Rule 24 of the Rules, but before passing resolution, no notice was given to second respondent. In fact, the loan amount was repaid on 30.11.2007, but it is not correct to state that the second respondent was given notices on 5.2.2007 and 20.2.2007. Therefore, the contention of the petitioner that as the second respondent failed to respond to the notices dated 5.2.2007 and 20.2.2007, he ceased to hold the post of Director as per Section 21-A(1)(b) of the Act is not correct. Sub-rule 4 of Rule 24 of Rules contemplates that ‘before passing a resolution under sub-rule 3(c) or 3(d), the committee of the society shall give such person an opportunity to state his objection, if any, to the proposed action and if the person wishes to be heard, he shall be given an opportunity to be heard. Further, the General Body of the Society through a resolution declare that a person shall cease to be a member of the committee of the society concerned from the date of disqualification. In the present case, before passing resolution, it is mandatory on the part of the committee of the society to give opportunity to the second respondent. Further, the said resolution shall be placed before the General Body, but these procedural things are lacking and accordingly the alleged resolution passed by the committee cannot be treated as valid resolution and consequently, the disqualification is also not valid. The managing committee passed a resolution on 3.11.2007 disqualifying the second respondent as per the provisions of Section 21-A(b) of the Act, as he fell due to the society. With regard to the contention of the petitioner that he gave letter to the first respondent on 12.12.2007 informing about the cessation of membership of the second respondent and the same was acknowledged by the office on 12.12.2007 is not correct. Petitioner submitted letter dated 11.12.2007 to the office on 18.12.2007 stating that the second respondent who stood surety to Kama Subba Rao had committed default in payment of loan and therefore, he ceased to be a member of the committee. Based on the report of the Assistant Registrar dated 14.12.2007, impugned notice was issued on 14.12.2007 under Section 34-A of the Act. As such the contention of the petitioner that without considering the letter dated 12.12.2007, the impugned notice was given is not correct. The records viz, general ledger, cash book and minutes book and letter dated 11.12.2007 were handed over and acknowledgement was taken from the office. The office had received only the minutes book and acknowledged the same on 12.12.2007. It is not true that the letter informing the cessation of second respondent as Director was handed over in the office or acknowledged by the office. As per the report of the Assistant Registrar dated 14.12.2007, the disqualification of second respondent was brought to the notice of first respondent, but as per the available evidence, it is evident that the disqualification of second respondent is invalid as per Rule 24 or Section 21-A(b) of the Act since no opportunity was provided to the second respondent to submit his explanation for the proposed action by the managing committee on 3.11.2007. Sub-rule 4 of Rule 24 makes it abundantly clear that when the Registrar passes an order about the disqualification after giving an opportunity to the concerned member that would come into effect with effect from the date on which he incurred disqualification as envisaged under the provisions of Rule 24(1) of the Rules and not from the date of order. This legal position is settled in the judgment in PULLA COOPERATIVE RURAL BANK LIMITED, PULLA, WEST GODAVARI DISTRICT v. BONAMRAM MOHAN RAO[1]. Since the second respondent did not incur disqualification, a notice was given to him and all the Directors along with the petitioner to participate in the debate of no confidence motion on 2.1.2008 at the seat of the society. Nine out of thirteen elected Directors requisitioned “no confidence motion” against the petitioner, the request of the majority of the Directors was taken into consideration and impugned notice was issued. Heard both sides and perused the impugned notice and other material made available on record. The short question that arises for consideration in this writ petition is whether the second respondent was disqualified as Director of the Society to participate in the no confidence motion moved against the petitioner under Section 34-A of the Act. The facts are not much in dispute, except the resolution passed by the society on 3.11.2007 and notices issued by the petitioner on 5.2.2007 and 20.2.2007. The Assistant Registrar, after examining the records, observed that there was no valid resolution passed by the society disqualifying the second respondent on 3.11.2007. The second respondent was also not given any notice of cessation of Directorship of the society. May be, that nine members are required out of thirteen, for the successful move of motion of no confidence, but it cannot be said that merely because some resolution is passed by the society, which is also suspicious and doubtful, which was never communicated to the second respondent nor the second respondent was intimated about the same, it cannot be said that he was disqualified, therefore, he cannot participate in the no confidence motion scheduled to be held on 2.1.2008. Section 21-A(b) contemplates that no person shall be eligible for being chosen as, and for being, a member of the committee, if he is in default in the payment of any amount due in cash or kind to the society or any other society for such period as may be prescribed or is a delegate of a society which is defunct or which is in default as aforesaid. Rule 24(4) of the Rules contemplates that ‘before passing a resolution under sub-rule 3(c) or 3(d), the committee of the society shall give such person an opportunity to state his objection, if any, to the proposed action and if the person wishes to be heard, he shall be given an opportunity to be heard. This cardinal principle enunciated in the statutory rules has not been followed. Thus, there was no disqualification attached to second respondent for participating in the no confidence motion conducted on 2.1.2008 under Section 34-A of the Act. Further, there is no necessity of going into other details, such as, suspicious way in which the resolution purported to have been passed on 3.11.2007 and the notices said to have been issued by the petitioner to the second respondent. I am of the considered opinion that the writ petition is devoid of merits and liable to be dismissed. Accordingly, the writ petition is dismissed. No order as to costs. _____________ C.V.RAMULU, J Date: 6.4.2009 DA THE HON’BLE SRI JUSTICE C.V.RAMULU W.P.No.27713 of 2007 6.4.2009 [1] 1998(6) ALD 661