Gurbhej Singh vs The Punjab State Coop. Bank Limited and Others

N.K. Sodhi, J.—The Amritsar Central Cooperation Bank Limited, Amritsar (for short, the Central Bank) is a member of the Punjab State Cooperative Bank Limited, Chandigarh (hereinafter called the Apex Bank). The term of the Board of Directors of the Apex Bank came to an end in October, 1993. The Joint Registrar, Cooperative Societies, Punjab prepared a programme for elections to the Board of Directors of the Apex Bank to be held on 28.10.1993 from 11.00 A.M. to 2.00P.M. in the Bank building situated in Sector 17, Chandigarh. All the Central Cooperative Banks in the State of Punjab are members of the Apex Bank and in addition there are some apex societies and other societies which are also its members. The area of operation of the Apex Bank had been divided into 19 zones, viz 17 for the Central Cooperative Banks and Zone No. 18 and 19 for the apex Bank and other societies. The Central Bank falls in the zone No. 1.

A representative of the Central Bank had to be sent for participating in the elections of the Apex Bank. A meeting of the Board of Directors of the Central Bank had been summoned for 12.10.1993 and an item in the supplementary agenda was circulated for electing a representative. By a resolution passed in this meeting the petitioner who is a Director of. the Central Bank was duly authorised to participate in the election of the Board of Directors of the Apex Bank as a representative of the Central Bank. Thereafter the Central Bank through its Chief Executive Officer sent a copy of the supplementary resolution to the Apex Bank as per letter dated 16.10.1993 which was received there on 20.10.1993. It appears that there was some dispute as to whether the petitioner had been authorised or not an one Bahadur Chand the then Chairman of the Central Bank claimed that instead of the petitioner it was Sukdev Singh, another Director of the Central Bank who had been authorised. Bahadur Chand is said to have scored off the recorded resolution in favour of the petitioner and recorded a resolution in the proceedings book on 23.10.1993 which contained a recital that Sukhdev Singh had been elected in the meeting held on 12.10.1993 to represent the Central Bank. A copy of the sub-sequently recorded resolution was also sent to the Apex Bank by the Chief Executive Officer and the same was received there on 26.10.1993. It is common case of the parties that the Apex Bank had two resolutions before it-one showing that the petitioner had been elected to represent the Central Bank whereas according to the other Sukhdev Singh was to represent the Central Bank. As per the election programme published by the Apex Bank for the election of its Board of Directors 25.10.1993 was the last date for the receipt of resolution from the member Central Banks. Petitioner claiming to be representative of the Central Bank filed his nomination papers on 26.10.1993 with the returning officer. At the time of scrutiny the Returning Officer found that there were two resolutions sent by the Central Bank in favour of the two different individuals and he, therefore, got in touch with the Chief Executive Officer of the Central Bank on telephone. The Returning Officer was told that the correct resolution was the one pertaining to Sukhdev Singh. On this, the Returning Officer by order dated 27.10.1993 rejected the nomination papers of the petitioner for the following two reasons: - (i) That he had not been sent as a representative by the Central Bank, (ii) That the primary society, namely, the Palasore Cooperative Agriculture Service Society, Palasore, Tehsil Tarn Taran, District Amritsar which was being represented by the petitioner was a defaulter of the Central Bank.

It was at this stage that the petitioner filed the present petition under Article 226 of the Constitution challenging the order of the Returning Officer rejecting his nomination papers. It may be mentioned that in the meantime the Joint Registrar, Cooperative Societies, Jalandhar exercising the powers of the Registrar, Cooperative Societies, Punjab, as per his order dated January 12, 1994, removed Shri Bahadur Chand from the Chairmanship of the Board of Directors of the Central bank u/s 27(2) of the Punjab Cooperative Societies Act, 1961 on the ground that while the Board had approved the name of the petitioner and had authorised him to participate in the election of the Apex Bank, he (Bahadur Chand) unauthorisedly on his own wrote a new resolution in the proceedings book authorising Sukhdev Singh to represent the Central Bank. The said Shri Bahadur Chand filed C.W.P. 631 of 1994 in this Court challenging his removal and also filed a statutory appeal before The Registrar, Cooperative Societies, Punjab. The present petition came up for hearing before me on January 25, 1995, alongwith C.W.P. No. 631 of 1994. C.W.P. 631 of 1994 was dismissed because the petitioner therein had availed of the statutory remedy of appeal and the appellate authority was directed to dispose of the appeal filed by Bahadur Chand before the end of February, 1995. The present petition had been delinked in order to await the order of the appellate authority as the Court wanted to see whether the order of removal of Bahadur Chand was upheld or set aside in appeal. If the order had been set aside then obviously the resolution sent by the Central Bank to the Apex Bank authorising the petitioner to represent it would have been a forged one because the charge against Bahadur Chand was that he had recorded a resolution in the proceedings book of the Central Bank in favour of Sukhdev Singh. That appeal has since been dismissed and the order of removal of Bahadur Chand upheld. The appellate authority has, thus, affirmed that it was the petitioner who had been nominated as the representative of the Central Bank to participate in the elections of the Board of Directors of the Apex Bank. It further follows that the resolution subsequently recorded by Bahadur Chand in favour of Sukhdev Singh was a fabricated one and that he had never been authorised to represent the Central Bank. This being so, the Returning Officer, was not justified in accepting the opinion of the Chief Executive Officer of the Central Bank. Not only this, as per the election programme resolutions from the member banks had to reach the Apex Bank on or before 25.10.1993. Admittedly, one resolution from the Central Bank had been received till this date and that was in favour of the petitioner. The other resolution allegedly authorising Sukhdev Singh was received on 26.10.1993 and the Returning Officer was not justified in taking that resolution into consideration. The first ground on which the nomination papers of the petitioner were rejected cannot, therefore, be sustained.

Now coming to the other ground on which the nomination of the petitioner was rejected, I find that too cannot be sustained. Even if one were to assume that the Palasore Cooperative Agriculture Service Society which was being represented by the petitioner in the Central Bank was a defaulter of that bank, that by itself did not make the petitioner ineligible for contesting the election of the Board of Directors of the Apex Bank. According to Rule 25(a) of the Punjab Cooperative Societies Rules, 1963, a person becomes ineligible for an election as a member of the committee of a cooperative society if he is in default to any cooperative society in respect of any sum due from him to the cooperative society an amount exceeding his maximum credit limit. Admittedly, the petitioner was not a defaulter of the Central Bank. He was, therefore, eligible to contest the election even if the primary society which he was representing in the Central Bank was a defaulter of that bank. Both the grounds on which the impugned order rejecting the nomination papers of the petitioner is based cannot, thus, be sustained and the impugned order is therefore, liable to be quashed.

Counsel for the parties have agreed that zone No. 1 is still unrepresented on the Board of Directors of the Apex Bank. The petitioner was the only candidate whose nomination papers had been received from this zone and he must, therefore be deemed to have been elected as a Director from this Zone.

In the result, the writ petition is allowed, impugned order dated 27.10.1993 quashed and the petitioner is declared elected as a Director of the Apex Bank from

Zone No. 1. There is no order as to costs.