400 1 9 7V CWP No 7301 of2009 V IN THE P d COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP No 7301of2009 Date ofdecision 07012010 SukhpalSinghKhaira eevePetitioner Versus 1 StateofPunjaband others Respondents 0 C CORAM2 HONBLE MRe JUSTICE PERMOD KOHLI I 0 Presentl Mr MS KangAdvocate for thepetitioner I Mr PC GoyalAddl AG Punjab Z for Nol to 3 Mr MS Bedi Advocate for respondent NoA I Mr DeepakBhardwajAdvocate 08 for No5 Mr M Goswami Advocate 7 for No6 Z PERMOD KOHLI Je 0m Petitioners election as Director of the Kapurthala Central Cooperative Bank Ltd respondent No herein hasbeenset asidebythe Additional RegistrarCredit9Cooperative Societies Punjab e1 while decidingelection disputeunder Section 55 of the Punjab Societies Act 1961 hereinafter called the Act9 ln an electionpetitionpreferred by NoA whose nomination paper was rejectedAppealpreferredby the petitioner before the Registrar Societies Punjabalso failed thoughtheRegistrarreversed the findingson the status of NoeBank Order of the Radhika 2014.03.22 16: 34 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:54 I attest to the accuracy and integrity of this document 401 42 1 lT CWP No 7301 of2009 9 2 RegistrarAnnexure P29 has been upheldin revlSlOO by the Financial Commissioner Punjab exercisingthe powers of Govemment underSection 69 ofthe Act The validityof the aforesaid order is under challenge in the presentpetition It may be useful to brieflynotice the factual emerging from the record Central C Bank Ltd Kapurthala called the Bank9is a cooperative 0 C society under the provisions of the Act Election to the BOD I C ofthe Bank was notifledto be held in February2006 The election was I on zonal basis Petitioner NoA and anothercandidatefiled Z their nomination papers for the election from zone No5 All the candidates flled their nomination papers as of their I respective membersocietiesof the Bank The petitioner to the 06 nornlnation of NoA seekinghis rejection on thegroundthat the said is alreadymember of two central societies and is W2 Z ineligibleto contest on account of under tl Section 2619 of the Act NoA did not file any replyto the objectorsplea RetumingOfficer accepting the contention of the petitionerrejected the nomination papers of NoA leaving r4 two candidatesin the frayfrom zone No The petitioner contestedthe election and was declaredelecteddefeating othercandidate in the fleld Aggrievedof the rejectionof his nomination papers and the election of the petitioner NoA filed an election petition invokingtheprovisions of Section 55 of the Act read with Rule 51 and Rule 1229of the AppendixC of the PunjabCooperativeSocieties Radhika 2014.03.22 16: 34 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:54 I attest to the accuracy and integrity of this document 402 ef 1 CWP No 7301 of2009 3e Rules 1963 Election of the petitioner was soughtto be set aside primarilyOll three groundske 6i9that NoA was not a rnemberof two central societies at the time of filinghis nomination iil that even if it is assumedthat he was a memberof two central societies he had resigned from one of the societies and 6iii9that the Bank is an apex society the alleged envisaged under r Section26B619ofthe Act is not attracted 0 C The AdditionalRegistrarwho heardthe electionpetitionvide I C5 his order dated19112007 allowed the electionpetitionholdingthat the I Bank is an apex society No had submittedhis Z from one ofthe societiesand thus hasnot incurredany He has further held that if any could not have been I attractedat the stageof filingof nominationand could be invoked only oll on the success611election of the candidate and even in such an the candidatehad has theoptionto retain the of W2 Z one of the centralsocieties the election of the petitioner as Director came to be set aside Aggrievedof the decision of the Additional Registrarthe petitioner herein filed an appealunder Section 68 of the Act before the Registrar Societies Punjab The appealof the petitioner C alongwith two more appealsarisingout of the same election though from other zone under similar circumstanceswas heard and decided by the Registrarvide his impugnedjudgmentdated 262008 The appellate Court concurred with the findings of the Additional Registrar on all counts excepton the status ofthe Bank The appellate Court while considering this aspect reversedthe Sndingsof the Additional Registrar Radhika 2014.03.22 16: 34 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:54 I attest to the accuracy and integrity of this document 403 4 4r CWP No 7301of2009 4 and declaredthe Bank as centralsocietyin contrast to theOndings ofthe Additional Registrar the bank as an apexsociety Dissatisfied with the order of the appellate the petitionerinvoked therevisionaljurisdiction ofthe GovemmentbyOling revision challenging both theordersofthe abovementioned authorities i The revisional Court vide the impugnedjudgmentdated 232009 afflrmedtheorder ofthe appellate dated2682008 0 C Present petition has been preferredunder the aforesaid C5 Clrcumstances I Mr MS Kang learnedcounsel for the petitionerhas assailed Z the findings of the authoritiesbelow excepton the question of statusof the Bank on varietyof groundsHis principalcontention however 1S regarding the of Section 26B which inter alia deals with I olj the issue With a view to appreciate the contentionsraised in the writ 3 Z petitionit is deemednecessaryto examinethe relevantprovisionsof the Il Act and the Rules Section 15A of the Act defines various kinds of societiesandreadsas under1 15l Restrictions on individuals ut becoming membus of certailn Societies e l9 No individual shall be admitted as memberof a central or 4a0e apex societyunless such a societyhas been exempted by theRegistrar in this behalfbya general or specialorder 29 The Central and apex socletles havingindividuals as memberson the dateof commencement of thePunjabCo operativeSocieties endment4ct 1969 shall retire the shares of such individuals within a periodof three yearsofsuchcommencement in theprescribed manner Radhika 2014.03.22 16: 34 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:54 I attest to the accuracy and integrity of this document 404 r 1 e l 1 4V CWP No 7301 of2009 J 5 For thepurpose ofthissection section 26 section26vBand section 84 a9 primarysociety means a CooperativeSociety whose consists exclusivelyof individuals b9 central society means a Society whose includesprimarysocieties 1 L C1 apex society means a Society whose includes central societies 33 0 C Explanationappended to the aforesaid Section makes this I C5 Section relevantfor purposesof Section 151 Section 26 Section 26B and Section84A of theAct From the abovedeflnitions it appearsthat Z onlysuch societycan be termedas a primarysocietywhose conSlSts exclusively of individuals A central societymeans a SOClety l whose includes primarysocietiesand the apex societyhas a5 beendeflned a societywhose includes centralsocieties NoA was allegedto be a memberof two central 17 Z societies at thetime of election namelyNadala Om Societyand the District Cooperative Union Kapunhala He was also member of Narangpur CASS Societyon whose behalf NoA contestedthe election The Additional Registrar in the impugned order held that the Bank is to be treatedan apex societyand cannot be as centralsocietyHe furtherheld that respondent NoA was memberofNarangpur CASS which was a primarysocietyand thus said did not incur in terms of Section 26B of the Act Apartfrom that he has held that respondent NoA had resignedfrom the District CooperativeUnion Kapurthala central society9and his was acceptedbefore filing nomination Radhika 2014.03.22 16: 34 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:54 I attest to the accuracy and integrity of this document 405 111f CWP No 7301 of2009 40e hencethe nominationhasbeenwronglyrejected The appellate authoritythoughconcurredwith the findings of the Additional RegistrarOll the questionof however reversedthe flndings on the question of statusof the Bank and held the Bank is a central societyand not apex societyIt was accordingly held a that NoA beingmember of only one central society1e Nadala Societybut he having 0 C resigned from the other central society1 District Union I C5 Kapurthaladid not eam any The appellate authority I also upheldtheflndings of the Additional Registrar that the questionof Z cannot be considered at the stageof filing of a nomination I The revisional authority also concurred with the judgment of 08 theappellate authoirty Section 26B of the Act deals with the restrictions on W2 Z and readsas underl 26B0 Resons on et No idual shall at any time be a memberofcommittee of al more than two primarysocieties and b9more than one central and one apex society Provided that nothingin this sulsection shall applyto a 4r membernominatedunder sulsectior2 ofSection 26 or to a memberof the committeeofan apexor central society nominatedto serve on the committeeof another apex or central societyas the case maybe in accordancewith the provisionsoftheirbyeaws 21 No person shall be eligiblefor beingelected to the committeeof any cooperativesocietyafterhe has senled on the cottee of that societywhetherbeforeor after Radhika 2014.03.22 16: 34 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:54 I attest to the accuracy and integrity of this document 406 2 1 1 41 CWP No 7301of2009 7 or partlybeforeandpartlyafr the commencement ofthe Punjab Societies Act l 969 for a continuousperiodofnotlessthan sixyears unlessa periodof not less than threeyears has expiredsince the last so senled lanatione a For thepurpose of computing theperiod ofsix years under sulsection if a person ceased to m r serve on the committeeon account ofresignation tendered byhim he shall be deemedto have so senIedfor thefull 0 C term in which resignation was tenderedJ I Subesectionl of Section 26B of the Act imposesrestrictions C5 I on It prohibits an individual to be memberof committeeof Z more than two primarysocietiesand more than one central and one apex societyat any time 0 It is admittedcase ofthe partiesthat Clause a9ofSulsection I 08 1 of Section 26B is not attracted It is nobodys case that NoA was memberof two primarysocieties at any giventime Dispute W Z relatesto of Bank and the Nadala Marketing Society It 1S admitted case of the partiesthat NoA SwaranSinghJosh was the President of Nadala CMPS and also a committeememberofKapurthala District Cooperative Union Ltd Both the societieswere centralsocietiesin terms of the definitions Ce containedunder Section 154 ofthe Act The appellate authority as also the revisional authority have held the Bank also to be a central society which deflnition has not been disputedin the writ petition All the authoritiesrightfrom the Additional Registrarto revisional authority ruled that respondentNoA had submittedhis resignation from KapurthalaDistrict CoeoperativeUnion Ltd before 61ing Radhika 2014.03.22 16: 34 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:54 I attest to the accuracy and integrity of this document j 407 e CWP No73010f2009 8 nomination Thoughthe factum of acceptanceof resignationhas been disputedbythe petitionerThere is a certiflcateon record producedby NoA which has been accepted by the authoritiesin respect to the of NoA from one of the central societies No material has been producedby the presentpetitioner on record to 1 indicate that the of NoA had not been accepted r beforefllinghis nomination Thus findingsrecordedbythe authorities 0 C below regarding acceptanceofnomination deserveno interference I C5 The onlyquestion now requiring considerationis regarding the I lncurnng by NoA while beingmemberof Z the Nadala CMPS and the Bank which has been declared as a central society Clause 0 of Sulsection 1 of Section 26B prohibits an C individual to be memberofmore than one centraland one apex society I 08 In the presentcase both the societies are central societies as per the findings recordedbyappellate as also therevisional authorityHowever 3 Z the has not been appliedon the groundthat NoA had theoptionto optfor the ofone ofthe societies on beingelected to two central societies It is rther held that the is not attractedat the stageof nomination and it is only afterthe election thatthe bar of becomesoperative cme Section 26B of the Act preventsan individual to be member of committeeof more than one centraland one apexsocietyat any time Expressionat any time is significantThe expressionat any time makes no exceptionfrom holding of a committeeof more than one central and apex societies at a time In the the provisionis violated the will be attractedin a later Radhika 2014.03.22 16: 34 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:54 I attest to the accuracy and integrity of this document 408 F CWPN0 7301of2009 3e as acquiring of a second central society1S prohibited The prohibition1S to be seen at the very inceptionof acquiring and thus it doesnot envisage anyoptionwith the individual to relinquish offtce of one or other society The momenta personis electedto anothersocietyhe suffersthe Now questionarises should a person be allowed to be electedand then 1Sto r be disquali8ed or he 1Sto be preventedfrom acquiring of 0 C second central or apex societyin the buddingitselt It does not make I C0 anysense that personbe permitted to contest the election and once he is I electedhe should be disqualifiedRather theprudence demandsthat if a Z person is already a memberof one centralor apex societyhe should not be considered eligiblefor election to another central societywhile holding of committeeofone centralsociety I 08 Similar issue came up for considerationbefore theApexCourt in the case of Delhi COoperative SocietiesAct where the 2 Z ofSection 25 and Section28 ofthe Delhi Act came up for Om The relevant extract from the aforementionedSections 1S hereunderl 25 Disqualicationfor ll No person shall be eligibleforadmission as a member 4ee ofa cooperativesocietyifhe a X X X X X b X X X X X c9 in case ofa housingsociety i9 X X X X X ii9 X X X X X iii7 he or his spouse or any ofhis children is a member of any other housingsocietyexceptotherwise Radhika 2014.03.22 16: 34 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:54 I attest to the accuracy and integrity of this document 409 1 V 5 l CWP No 7301 of2009 10 permitted bytheRegistrar 29 anything contained in the rules or the byolawsofthecoperativesocietyifa memberbecomes or has alreadybecome subjectto any specifled in subrule 9 he shaUbe deemedto haveceased to be memberfrom the date when the were incurred 31 m C 28 Prohibition of ln Two Cooperative Societies 0 C No individual beinga memberof a primarycoperative I societyof any class shall be a memberof any other Co C5 operative societyof the same class without thegeneral OY I specialpermissionof the Registrar and where an Z individual has become a member of two cooperative societies of the same class either or both of the Coe a C operativesocietyshall be bound to remove him from upon written theRegistrar to that ejct 33 C45 Section 28 is more or less on the lines of Section 2643 of the 7 Act However ln case of Section 26B restriction is attractedwithout Z interventionof the Registrarwhereas in case of Section 28 the prohibition1S subjectto the action of the RegistrarCooperative Societies While both these provisionsthe Honble Supreme Court observedas undec C Bearin2 in mind the aforesaidrules of construction if sulrul21 of R 25 and 28 are examined the obvious answer would be that under sub47ile the deemed cessation from membershiDof the oerson concerned lS ln relation to the societvpertainin to which disaualication are incurred A plain readingof R 28 makes it crvstal clear that the Registrar when becomesaware of the fact that an individual has become a member of two co Radhika 2014.03.22 16: 34 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:54 I attest to the accuracy and integrity of this document 410 r Ip CWP No 7301 of2009 11 operave societiesof the same class which obviouslyls a disqualitlcationunder R 25 then he has the discretion to direct removalof the said individual from the membershio ofeither or both the coeooerativesocieties Ifsubule of R 25 is interpreted tomean that deemedcessation of the person concerned from of both the societies then the questionof discretion of the Registrar r under R 28 will not arise If the givenby the Registrarto suberule of I2 25 as well as the 0 C contention raised by the learned counsel for the I is sustained then the said subule will be at C5 loggerhead with Rs 28 On the other hand if subule 21 is interpretedto mean that the deemed cessation is lTl Z relation to the societv lTl resoect of which the Derson concerned incurs the disqualication then both subnule 21 as well as R 28 would have its Dlav Rule 28 ln our considered ooinion cannot be held to be otiose and must 08 be allowed to have its full olav In this view of the matter the onlv wav bv which subvrule of R 25 and Rule 28 Can be harmoniouslvconstruedis to construe subule W2 Z to R 25 to mean that the deemedcessation of the Derson ll concerned from the membershioof the societv is the societv in resoect of which the disqualiztion was incurrecl In the case in hand the which theappellant incurred was in respectofhis of the Tribal HousingSocietyLtd as he could Ce not have become a memberof the said societyas he was alreadya memberof Group HousingSocietyand thereforeby operativeof subule 29he would deem to haveceasedto be a the Tribal HousingSocietyrightfrom the inception ln Novembe 1983 and not from the DronacharayaCoperativeGroupHousingSociety 33 In view of the ratio of the aforesaid judgment the Radhika 2014.03.22 16: 34 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:54 I attest to the accuracy and integrity of this document 411 11 1 Gl CWP No 7301 of2009 12 1 soughtto be placedby the authoritieswhoseorders are underchallengethat the cannot be attractedat thestage of nomination cannot be acceptedSuch an results in absurdityThe intention of the law cannot be to permita person to violate and thenpunishhim Ifthereis a restriction it 1 has to be from the very inceptionSince NoA was already r a rnemberof one of the central societyhe could not havebeen permitted 0 CAO to contestthe election for anothercentral societywithout ceasingto be I C5 memberofthe first centralsocietyOfcourse he hadtheliberty to resign I from the first societyto contest the electionfor the secondsocietyofthe Z same nature r In view of the totalityof the circumstancesand keeping 111 I Vlew the true purport scope and ambit of Section 260B of the Act this 08 petition1S allowed the orders impugned are herebyset aside and the election of the petitioneras member of the Board of A7 Z Directorsofthe Bank is upheldfor theremaining periodifany 0m No order as to costs 1 Permod Kohlil Judge January07 2010 RS L Whether to be reportedto thereporter2 Yes 4 1rl 1 4 4 51 1PAl 17 I U A 4 1440 10 1 Radhika 2014.03.22 16: 34 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:54 I attest to the accuracy and integrity of this document