Raveendran Nair v. State Co-operative Election Commission & Others

**IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE C.T.RAVIKUMAR** **&** **THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS** **TUESDAY, THE 10TH DAY OF MARCH 2020 / 20TH PHALGUNA, 1941** ## **WA.No.444 OF 2020** **AGAINST THE JUDGMENT IN WP(C) 5267/2020(G) OF HIGH COURT OF KERALA** ## **APPELLANT/PETITIONER:** **RAVEENDRAN NAIR, S/O.VELAYUDHAN NAIR, PERUMANKARA VEEDU, KALAMACHAL P.O., VAMANAPURAM, THIRUVANANTHAPURAM DISTRICT, PIN - 695 606.** **BY ADVS.** ## **SRI.T.R.HARIKUMAR SRI.ARJUN RAGHAVAN** ## **RESPONDENTS/RESPONDENTS:** - **1 THE STATE CO-OPERATIVE ELECTION COMMISSION, REPRESENTED BY ITS SECRETARY, THIRUVANANTHAPURAM, PIN - 695 001.** **2 THE ELECTORAL OFFICER, VAMANAPURAM SERVICE CO-OPERATIVE BANK LTD.NO.927, VAMANAPURAM P.O., THIRUVANANTHAPURAM DISTRICT - 695606, ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), NEDUMANGAD, THIRUVANANTHAPURAM.** **3 THE RETURNING OFFICER, VAMANAPURAM SERVICE CO-OPERATIVE BANK LTD.NO.927, VAMANAPURAM P.O.,** **W.A.444/2020** -:2:- **THIRUVANANTHAPURAM DISTRICT - 695 606, UNIT INSPECTOR, VENJARAMOOD UNIT, OFFICE OF THE ASSISTANT REGISTRAR OF COOPERATIVE SOCIETIES (GENERAL), NEDUMANGAD, THIRUVANANTHAPURAM.** **4 THE VAMANAPURAM SERVICE CO-OPERATIVE BANK LTD.NO.927,REPRESENTED BY ITS SECRETARY, VAMANAPURAM P.O., THIRUVANANTHAPURAM DISTRICT - 695 606.** **R4- ADV. M.SASINDRAN** **R1-SRI.R.LAKSHMI NARAYAN,SC** **THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 10.03.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **W.A.444/2020** -:3:- ## **“C.R”** ## **JUDGMENT** ## _**Bechu Kurian Thomas, J.**_ Rejection of nomination of the appellant on the ground that he was a defaulter to the society and hence acquired disqualification under Rule 44(1)(c)(i) of the Kerala Cooperative Societies Rules, 1969 (the ‘Rules’ for brevity) was impugned in the writ petition. Challenge against the said rejection did not find favour with the learned Single judge and the writ petition was dismissed. Aggrieved, appellant seeks our intervention. 2. Sri.Arjun Raghavan and Sri.T.R.Harikumar, learned counsel for the appellant, contended that the appellant was only a surety in respect of 3 loans taken by his immediate family member on 17-10-2018, which were repayable only within 5 years. However, in order to disqualify the appellant, the administrative committee of the Society filed three arbitration cases in which awards were passed on 29-11-2019, copies of **W.A.444/2020** -:4:- which were produced in the writ petition as Exts.P2, P3 and P4. Learned counsel also contended that immediately on obtaining copies of the awards, respective appeals were filed before the Kerala Co-operative Tribunal under Section 82 of the Kerala Cooperative Societies Act, 1969 (hereinafter referred to as the ‘Act’ for short). It was also pointed out that along with the appeals, stay petitions were preferred in which the Tribunal issued an order staying execution of the award, and hence the appellant cannot be regarded as a defaulter under Rule 2(e) of the Rules. Learned counsel tried their best to impress upon this Court that the finding of the learned Single Judge that the stay order does not take away the nature of default of the appellant is legally untenable as according to him stay of execution of the award stands on the same footing as that of a stay of the award itself. On the aforesaid submissions, learned counsel attempted to persuade us to interfere with the judgment of the learned Single Judge. **W.A.444/2020** -:5:- 3. We also heard Smt.K.R.Deepa, learned Government Pleader, Sri.R.Lakshmi Narayan, learned Standing Counsel appearing for the 1[st] respondent, as well as Sri.M.Sasindran, learned counsel appearing for the 4[th] respondent Society. 4. All of them, in unison, pointed out that there is no merit in the contention advanced by the appellant since he is a defaulter to the Society and the said default is not removed on account of the interim order of the Co-operative Tribunal, as evidenced by Exts.P5, P6 and P7. 5. In order to appreciate the contentions of the learned counsel, it may be apposite to extract Rule 2(e) and Rule 44(1) (c)(i) of the Rules, which read as follows: **Rule 2(e). “Defaulter”** means any Cooperative Society against which or any person against whom a decree has been obtained. **Rule 44.Disqualification of membership of committee--** (1) No member of the society shall be eligible for being elected, or appointed as a member of the committee of the society under S.28 if he:- (a)...................... (b)...................... (c)(i) is in default to the society or to any **W.A.444/2020** -:6:- other society in respect of any loan or loans taken by him or loan in which he had stood surety, for such period, as is prescribed in the bye-laws of the society concerned or in any case for a period exceeding three months or is a defaulter to the society or to any other society; 6. A reading of the aforesaid provisions would bring to light that Rule 44(1)(c)(i) has two parts: the first part deals with default, while the second part deals with a ‘defaulter’. The difference in the language of the two parts has significance, especially when the definitions in Rule 2 are taken into reckoning. The word default is defined in Rule 2(d) as a failure to repay, while, as extracted above, defaulter means a person against whom a decree has been obtained. This Court had in **Rajagopalan v. Baby Alex** (1994 (2) KLT 974) and in **Surendran Nair v. State of Kerala** (2004 (1) KLT 407) noted the distinction in the language used in the two parts of Rule 44(1)(c)(i). 7. In the instant case, we are concerned with the latter part of Rule 44(1)(c)(i). Admittedly, decrees have been obtained against the appellant, as evidenced by Exts. P2, P3 **W.A.444/2020** -:7:- and P4. Though the decrees are subjected to an appeal before the Co-operative Tribunal, the interim orders that have been obtained are those in the nature of “stay of execution of the award till the disposal of the appeal.” According to us, the interim orders obtained by the appellant from the Co-operative Tribunal cannot advance the case of the appellant since what is granted by the Tribunal is only a stay of execution of the award. 8. A “stay of the award” and “stay of execution of the award” are not the same; they have different legal implications. The legal impact over the orders challenged in the proceeding that led to the aforesaid two types of interim orders varies significantly. A stay of the award creates a situation where the award or decree is kept in a state of suspended animation. If the award itself is stayed, no rights or liabilities under the award or decree will accrue to or be incurred by any person from the date of issuing the stay order on account of the award or decree having been passed. Stay of execution of the award, on the other hand, does not efface the liability due or obligation **W.A.444/2020** -:8:- created under the award. On the contrary, a stay of execution of the award connotes that the findings rendered in the award continues to hold the field, while the legal proceeding for recovery alone, as the case may be, contemplated under the award would remain stayed. In other words, the award remains valid and for all legal purposes, a decree is obtained against the appellant. 9. The aforesaid principle of law has its roots in the observations of the Privy Council in **Juscurn Boid v. Pirthichand Lal** (AIR 1918 PC 151) and also in Order XLI Rule 5 of Code of Civil Procedure, 1908. In the aforementioned judgment, it was observed that irrespective of what other systems of law may proclaim, under the Indian law and procedure, an original decree is not suspended by the presentation of an appeal. The aforesaid principle found favour in the Constitutional Bench judgment of the Hon’ble Supreme Court in **State of U.P. v. Mohammad Nooh** (AIR 1958 SC 86) wherein, after referring to the Privy Council decision it was **W.A.444/2020** ## -:9:- observed as follows:- ”There is nothing in the Indian law to warrant the suggestion that the decree or order of the Court or tribunal of the first instance becomes final only on the termination of all proceedings by way of appeal or revision. The filing of the appeal or revision may put the decree or order in jeopardy but until it is reversed or modified it remains effective…………….” 10. The final order passed by a court or an authority does not cease to have effect merely by the presentation or existence of an appeal or even stay of execution. Unless operation of that order is stayed, all legal rights and liabilities which naturally flow from that order will accrue or be incurred by the parties involved therein. 11. Reliance can also be placed upon the observations of the Hon'ble Supreme Court in **Shree Chamundi Mopeds Ltd. v. Church of South India Trust Association** [(1992) 3 SCC 1] wherein the distinction between 'quashing an order' and 'staying an order' was considered. It was held that staying an order does not wipe out the order from existence but it will render the order stayed inoperative from the date of passing the stay. **W.A.444/2020** -:10:- 12. Viewed in the light of the above principles, the effect of obtaining a decree against a person, when reckoned in the light of the definition in Rule 2(e) is that he becomes a defaulter. As a defaulter to the society, a member becomes disqualified for being elected to a committee of the society as per the provisions of Rule 44(1)(c)(i). 13. Ext.P8 order finding that the appellant/petitioner is a defaulter as per Rule 44(1)(c)(i) cannot be found fault with and the learned Single Judge was perfectly justified in coming to the conclusion that the writ petition merits dismissal. We find no reason to interfere with the judgment of the learned Single Judge and the appeal is dismissed. **Sd/C.T. RAVIKUMAR JUDGE** **Sd/BECHU KURIAN THOMAS JUDGE** spc # **W.A.444/2020** -:11:- # **W.A.444/2020** -:12:- # **W.A.444/2020** -:13:-