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2010 DIGILAW 145 (PNJ)

Sukhpal Singh Khaira v. State of Punjab

2010-01-07

PERMOD KOHLI

body2010
JUDGMENT Permod Kohli, J. - Petitioners election as Director of the Kapurthala Central Cooperative Bank Ltd., Kapurthala, respondent No. 5 herein, has been set aside by the Additional Registrar (Credit) Cooperative Societies, Punjab, while deciding election dispute under Section 55 of the Punjab Cooperative Societies Act, 1961 (hereinafter called the Act) in an election petition preferred by respondent No. 4, whose nomination paper was rejected. Appeal preferred by the petitioner before the Registrar, Cooperative Societies, Punjab, also failed, though, the Registrar reversed the findings on the status of respondent No. 5 Bank. Order of the Registrar (Annexure P-2) has been upheld in revision by the Financial Commissioner (Cooperation), Punjab, exercising the powers of Government under Section 69 of the Act. 2. The validity of the aforesaid order is under challenge in the present petition. It may be useful to briefly notice the factual background emerging from the record. Kapurthala Central Cooperative Bank Ltd., Kapurthala (hereinafter called the Bank), is a cooperative society registered under the provisions of the Act. Election to the BOD of the Bank was notified to be held in February, 2006. The election was on zonal basis. Petitioner, respondent No. 4 and another candidate filed their nomination papers for the election from zone No. 5. All the candidates filed their nomination papers as representatives of their respective member societies of the Bank. The petitioner objected to the nomination of respondent No. 4 seeking his rejection on the ground, that the said respondent is already member of two central societies and is ineligible to contest on account of disqualification contemplated under Section 26-B(1) of the Act. Respondent No. 4 did not file any reply to the objectors plea. Returning Officer accepting the contention of the petitioner rejected the nomination papers of respondent No. 4, leaving two candidates in the fray from zone No. 5. The petitioner successfully contested the election and was declared elected defeating other candidate in the field. 3. Aggrieved of the rejection of his nomination papers and the election of the petitioner, respondent No. 4 filed an election petition invoking the provisions of Section 55 of the Act read with Rule 51 and Rule 12(2) of the Appendix C of the Punjab Cooperative Societies Rules, 1963. 3. Aggrieved of the rejection of his nomination papers and the election of the petitioner, respondent No. 4 filed an election petition invoking the provisions of Section 55 of the Act read with Rule 51 and Rule 12(2) of the Appendix C of the Punjab Cooperative Societies Rules, 1963. Election of the petitioner was sought to be set aside primarily on three grounds i.e. (i) that respondent No. 4 was not a member of two central societies at the time of filing his nomination, (ii) that even if it is assumed that he was a member of two central societies, he had resigned from one of the societies and (iii) that the Bank is an apex society, the alleged restriction/disqualification envisaged under Section 26-B(1) of the Act is not attracted. 4. The Additional Registrar, who heard the election petition, vide his order dated 19.11.2007 allowed the election petition, holding that the Bank is an apex society, respondent No. 4 had submitted his resignation from one of the societies and, thus, has not incurred any disqualification. He has further held that disqualification, if any, could not have been attracted at the stage of filing of nomination and could be invoked only on the successful election of the candidate and even in such an eventuality the candidate had has the option to retain the membership of one of the central societies. Consequently, the election of the petitioner as Director came to be set aside. 5. Aggrieved of the decision of the Additional Register, the petitioner herein filed an appeal under Section 68 of the Act before the Registrar, Cooperative Societies, Punjab. The appeal of the petitioner along with two more appeals, arising out of the same election, though from other zone under similar circumstances, was heard and decided by the Registrar vide his impugned judgment dated 26.8.2008. The appellate Court concurred with the findings of the Additional Registrar on all counts except on the status of the Bank. The appellate Court while considering this aspect, reversed the findings of the Additional Registrar and declared the Bank as central society in contrast to the findings of the Additional Registrar declaring the bank as an apex society. 6. Dissatisfied with the order of the appellate authority, the petitioner invoked the revisional jurisdiction of the Government by filing revision challenging both the orders of the abovementioned authorities. 7. 6. Dissatisfied with the order of the appellate authority, the petitioner invoked the revisional jurisdiction of the Government by filing revision challenging both the orders of the abovementioned authorities. 7. The revisional Court vide the impugned judgment dated 2.3.2009 affirmed the order of the appellate authority dated 26.8.2008. 8. Present petition has been preferred under the aforesaid circumstances. 9. Mr. M.S. Kang, learned counsel for the petitioner has assailed the findings of the authorities below except on the question of status of the Bank on variety of grounds. His principal contention, however, is regarding the interpretation of Section 26-B, which inter alia deals with the issue of disqualification. 10. With a view to appreciate the contentions raised in the writ petition, it is deemed necessary to examine the relevant provisions of the Act and the Rules. Section 15-A of the Act defines various kinds of societies and reads as under : "15-A. Restrictions on individuals in becoming members of certain Co-operative Societies. - (1) No individual shall be admitted as member of a central or apex society unless such a society has been exempted by the Registrar in this behalf, by a general or special order. (2) The Central and apex societies having individuals as members on the date of commencement of the Punjab Co-operative Societies (Amendment) Act, 1969, shall retire the shares of such individuals within a period of three years of such commencement in the prescribed manner. Explanation. - For the purpose of this section, section 26, section 26-B and section 84-A- (a) "primary society" means a Co-operative Society whose membership consists exclusively of individuals; (b) "central society" means a Co-operative Society whose membership includes primary softies; (c) "apex society" means a Co-operative Society whose membership includes central societies. " 11. Explanation appended to the aforesaid Section makes this Section relevant for purposes of Section 15-A, Section 26, Section 26-B and Section 84-A of the Act. From the above definitions, it appears that only such society can be termed as a primary society whose membership consists exclusively of individuals. A central society means a society whose membership includes primary societies and the apex society has been defined a society whose membership includes central societies. 12. Respondent No. 4 was alleged to be a member of two central societies at the time of election, namely Nadala Cooperative Marketing-cum-Processing Society and the District Co-operative Union Kapurthala. A central society means a society whose membership includes primary societies and the apex society has been defined a society whose membership includes central societies. 12. Respondent No. 4 was alleged to be a member of two central societies at the time of election, namely Nadala Cooperative Marketing-cum-Processing Society and the District Co-operative Union Kapurthala. He was also member of Narangpur CASS Society, on whose behalf respondent No. 4 contested the election. The Additional Registrar in the impugned order held that the Bank is to be treated an apex society and cannot be categorised as central society. He further held that respondent No. 4 was member of Narangpur CASS which was a primary society and, thus, said respondent did not incur disqualification in terms of Section 26-B of the Act. Apart from that he has held that respondent No. 4 had resigned from the District Co-operative Union Kapurthala (a central society) and his resignation was accepted before filing nomination, hence the nomination has been wrongly rejected. 13. The appellate authority though concurred with the findings of the Additional Registrar on the question of resignation, however, reversed the findings on the question of status of the Bank and held the Bank is a central society and not apex society. It was accordingly held that respondent No. 4 being member of only one central society i.e. Nadala Cooperative Marketing-cum-Processing Society but he having resigned from the other central society i.e. District Co-operative Union Kapurthala, did not earn any disqualification. The appellate authority also upheld the findings of the Additional Registrar that the question of disqualification cannot be considered at the stage of filing of nomination. 14. The revisional authority also concurred with the judgment of the appellate authority. 15. Section 26-B of the Act deals with the restrictions on membership and reads as under :- "26-B. Restrictions on membership, etc. - (1) No individual shall, at any time, be a member of committee of - (a) more than two primary societies; and (b) more than one central and one apex society Provided that nothing in this sub-section shall apply to a member nominated under sub-section (2) of Section 26 or to a member of the committee of an apex or central society nominated to serve on the committee of another apex or central society, as the case may be, in accordance with the provisions of their bye-laws. (2) No person shall be eligible for being elected to the committee of any co-operative society after he has served on the committee of that society, whether before or after or partly before and partly after the commencement of the Punjab Co-operative Societies (Amendment) Act, 1969, for a continuous period of not less than six years, unless a period of not less than three years has expired since the last so served. [Explanation. - For the purpose of computing the period of six years under sub-section (2), if a person ceased to serve on the committee on account of resignation tendered by him he shall be deemed to have so served for the full term in which resignation was tendered.] " 16. Sub-section 1 of Section 26-B of the Act imposes restrictions on membership. It prohibits an individual to be member of committee of more than two primary societies and more than one central and one apex society at any time. 17. It is admitted case of the parties that Clause (a) of Sub-section 1 of Section 26-B is not attracted. It is nobodys case that respondent No. 4 was member of two primary societies at any given time. Dispute relates to membership of Bank and the Nadala Cooperative Marketing-cum-Processing Society. It is admitted case of the parties that respondent No. 4 Swaran Singh Josh was the President of Nadala CMPS and also a committee member of Kapurthala District Co-operative Union Ltd. Both the societies were central societies in terms of the definitions contained under Section 15-A of the Act. The appellate authority as also the revisional authority have held the Bank also to be a central society, which definition has not been disputed in the writ petition. All the authorities right from the Additional Registrar to revisional authority concurrently ruled that respondent No. 4 had submitted his resignation from Kapurthala District Co-operative Union Ltd. before filing nomination. Though the factum of acceptance of resignation has been disputed by the petitioner. There is a certificate on record produced by respondent No. 4 which has been accepted by the authorities in respect to the resignation of respondent No. 4 from one of the central societies. No material has been produced by the present petitioner on record to indicate that the resignation of respondent No. 4 had not been accepted before filing his nomination. No material has been produced by the present petitioner on record to indicate that the resignation of respondent No. 4 had not been accepted before filing his nomination. Thus, findings recorded by the authorities below regarding acceptance of nomination deserve no interference. 18. The only question now requiring consideration is regarding the incurring of disqualification by respondent No. 4 while being member of the Nadala CMPS and the Bank which has been declared as a central society. Clause (b) of Sub- section 1 of Section 26-B prohibits an individual to be member of more than one central and one apex society. In the present case, both the societies are central societies, as per the findings recorded by appellate as also the revisional authority. However, the disqualification has not been applied on the ground that respondent No. 4 had the option to opt for the membership of one of the societies on being elected to two central societies. It is further held that the disqualification is not attracted at the stage of nomination and it is only after the election that the bar of disqualification becomes operative. 19. Section 26-B of the Act prevents an individual to be member of committee of more than one central and one apex society at any time. Expression "at any time" is significant. The expression "at any time" makes no exception from holding membership of a committee of more than one central and apex societies at a time. In the eventuality, the provision is violated, the disqualification will be attracted in a later membership as acquiring membership of a second central society is prohibited. The prohibition is to be seen at the very inception of acquiring membership and, thus, it does not envisage any option with the individual to relinquish office of one or other society. The moment a person is elected to another society, he suffers the disqualification. Now question arises, should a person be allowed to be elected and then is to be disqualified or he is to be prevented from acquiring membership of second central or apex society in the budding itself ? It does not make any sense that person be permitted to contest the election and once he is elected he should be disqualified. Now question arises, should a person be allowed to be elected and then is to be disqualified or he is to be prevented from acquiring membership of second central or apex society in the budding itself ? It does not make any sense that person be permitted to contest the election and once he is elected he should be disqualified. Rather the prudence demands that if a person is already a member of one central or apex society he should not be considered eligible for election to another central society while holding membership of committee of one central society. 20. Similar issue came up for consideration before the Apex Court in the case of Delhi Co-operative Societies Act where the interpretation of Section 25 and Section 28 of the Delhi Act came up for interpretation. The relevant extract from the aforementioned Sections is reproduced hereunder :- "25. Disqualification for Membership. (1) No person shall be eligible for admission as a member of a co- operative society if he- (a) x x x x x (b) x x x x x (c) in case of membership of a housing society:- (i) x x x x x (ii) x x x x x (iii) he or his spouse or any of his dependent children is a member of any other housing society except otherwise permitted by the Registrar. (2) Notwithstanding anything contained in the rules or the bye-laws of the co-operative society, if a member becomes, or has already become, subject to any disqualification specified in sub-rule (1), he shall be deemed to have ceased to be member from the date when the disqualifications were incurred. " "28. Prohibition of Membership in Two Co-operative Societies. No individual, being a member of a primary co-operative society of any class shall be a member of any other co-operative society of the same class without the general or special permission of the Registrar, and where an individual has become a member of two co-operative societies of the same class either or both of the co-operative society shall be bound to remove him from membership upon written requisition from the Registrar to that effect. " 21. Section 28 is more or less on the lines of Section 26-B of the Act. " 21. Section 28 is more or less on the lines of Section 26-B of the Act. However, in case of Section 26-B, restriction is attracted without intervention of the Registrar, whereas in case of Section 28 the prohibition is subject to the action of the Registrar Co-operative Societies. While interpreting both these provisions, the Honble Supreme Court observed as under :- "Bearing in mind the aforesaid rules of construction if sub-rule (2) of Rule 25 and 28 are examined the obvious answer would be that under sub-rule (2) the deemed cessation from membership of the person concerned is in relation to the society pertaining to which disqualification are incurred. A plain reading of Rule 28 makes it crystal clear that the Registrar when becomes aware of the fact that an individual has become a member of two co-operative societies of the same class which obviously is a disqualification under Rule 25 then he has the discretion to direct removal of the said individual from the membership of either or both the co-operative societies. If sub-rule (2) of Rule 25 is interpreted to mean that deemed cessation of the person concerned from membership of both the societies then the question of discretion of the Registrar under Rule 28 will not arise. If the interpretation given by the Registrar to sub-rule (2) of Rule 25 as well as the contention raised by the learned counsel for the respondent is sustained then the said sub-rule will be at loggerhead with Rs. 28. On the other hand if sub-rule (2) is interpreted to mean that the deemed cessation is in relation to the society in respect of which the person concerned incurs the disqualification then both sub rule (2) as well as R. 28 would have its play Rule 28 in our considered opinion cannot be held to be otiose and must be allowed to have its full play. In this view of the matter the only way by which sub-rule (2) of Rule 25 and Rule 28 can be harmoniously construed is to construe sub-rule (2) to R. 25 to mean that the deemed cessation of the person concerned from the membership of the society is the society in respect of which the disqualification was incurred. In this view of the matter the only way by which sub-rule (2) of Rule 25 and Rule 28 can be harmoniously construed is to construe sub-rule (2) to R. 25 to mean that the deemed cessation of the person concerned from the membership of the society is the society in respect of which the disqualification was incurred. In the case in hand the disqualification which the appellant incurred was in respect of his membership of the Tribal Co-operative Housing Society Ltd. as he could not have become a member of the said society as he was already a member of Dronacharaya Co-operative Group Housing Society, and therefore, by operative of sub-rule (2) he would deem to have ceased to be a member from the Tribal Co-operative Housing Society right from the inception in November, 1983 and not from the Dronacharaya Co-operative Group Housing Society." 22. In view of the ratio of the aforesaid judgment, the interpretation sought to be placed by the authorities whose orders are under challenge that the disqualification cannot be attracted at the stage of nomination, cannot be accepted. Such an interpretation results in absurdity. The intention of the law cannot be to permit a person to violate and then punish him. If there is a restriction of disqualification it has to be from the very inception. Since respondent No. 4 was already a member of one of the central society, he could not have been permitted to contest the election for another central society without ceasing to be member of the first central society of course he had the liberty to resign from the first society to contest the election for the second society of the same nature. 23. In view of the totality of the circumstances and keeping in view the true purport, scope and ambit of Section 26-B of the Act, this petition is allowed, the orders impugned are hereby set aside and consequently the election of the petitioner as member of the Board of Directors of the Bank is upheld for the remaining period, if any. No order as to costs. .