Yes, he was asked to be the original bassist but decided to stay in college to finish his degree.
The lead guitarist/singer from the first album, Denny Laine decided that he wanted to leave the band....and their first bassist left with him.
On the advice of Eric Burdon (from "The Animals"), the band contacted Justin Hayward to be the new lead guitarist/singer. By the time the agreement was finalized, John Lodge had his degree and was ready to join The Moody Blues.
Hayward and Lodge became the principal songwriters as well as filling the roles as guitarist and bassist for most of the band's albums even though neither were on the first album.