Case Background
The case arises from the election to the Board of Directors of Patliputra Central Cooperative Bank Limited, Patna. Elections were held after due notification, with a schedule that included filing of nominations, scrutiny, polling, counting of votes and declaration of results.
The petitioner and Respondent No. 8 both filed nominations for the post of Director in the General category. After polling and counting, the petitioner was elected as one of the Directors, and the result was declared on 12.04.2023.
Respondent No. 8, who had lost, later challenged the petitioner’s election. He did this by filing Election Dispute Case No. 56/2023 before the Joint Registrar, Cooperative Societies, Patna Division, Patna.
The sole ground taken in that election dispute was that the petitioner was a defaulter in terms of Rule 23(1)(b) of the Bihar Cooperative Societies Rules, 1959 on the date of filing of nomination. The allegation was linked to a loan taken for a Rice Mill, which had become overdue and had allegedly been treated as a Non-Performing Asset (NPA) by the bank.
The Joint Registrar, acting as the election dispute authority, allowed the election petition by order dated 28.03.2024. He set aside the petitioner’s election as Director on the ground that the petitioner was a defaulter under Rule 23(1)(b) on the date of nomination. It is this order that the petitioner challenged before the Patna High Court through Civil Writ Jurisdiction Case No. 7742 of 2024.
What the Court Examined and Decided
Justice A. Abhishek Reddy of the Patna High Court heard the writ petition. The petitioner sought two main reliefs: first, quashing of the Joint Registrar’s order dated 28.03.2024 in Election Dispute Case No. 56/2023; and second, a direction restraining the authorities from holding a fresh election to the post he had already won.
The petitioner’s case was that his election had been wrongly cancelled for several reasons. His counsel argued that an election petition was not the correct method to challenge his eligibility under Rule 23(1)(b) of the Bihar Cooperative Societies Rules, 1959.
It was submitted that if anyone wanted to treat him as a defaulter, the proper course was to first file an application before the Registrar under Rule 23(1)(b) to get a formal order of disqualification. Instead of following that route, Respondent No. 8 had directly filed an election petition. According to the petitioner, this made the entire election dispute proceeding legally not maintainable.
The petitioner also pointed out that at the time of scrutiny of nominations, Respondent No. 8 did not file any objection to his nomination. He argued that once the nomination stage passed without objection, Respondent No. 8 could not later attack his election on the same ground.
Further, the petitioner stressed that there was no prior decision by any competent authority declaring him a defaulter. He relied on earlier judgments of the Patna High Court:
1. CWJC No. 10137 of 2015 decided on 08.02.2016 (Ram Dhyan Yadav Vs. The State of Bihar & Ors.)
2. CWJC No. 1616 of 2021 decided on 22.11.2021 (Laxmi Sahani Vs. The State of Bihar & Ors.)
In these cases, the Court had held that disqualification under Rule 23(1) of the 1959 Rules must first be decided in a proper proceeding, and such questions cannot be taken up directly in an election dispute.
The petitioner also placed some factual aspects regarding the loan. He said he was proprietor of a Rice Mill which had taken a loan from the bank, and that he had repaid the entire amount. He claimed that earlier there had been miscalculation of interest, for which he had written several letters seeking recalculation and a correct statement of outstanding dues. He pointed out that during the pendency of the election petition, he cleared the remaining dues on 18.01.2024. According to him, the election authority failed to consider this payment while deciding the case.
On the other side, Respondent No. 8 and the bank strongly opposed the writ petition. Counsel for Respondent No. 8 submitted that Rule 23(1)(b) of the Bihar Cooperative Societies Rules, 1959 clearly treats a person who defaults in repayment of loan as a defaulter. He argued that on the relevant dates of nomination, 27.03.2023 and 28.03.2023, the petitioner’s loan account had already been classified as a Non-Performing Asset (NPA). Therefore, in his view, the petitioner was clearly a defaulter and not eligible to contest.
It was also submitted that the election authority had considered evidence and passed a reasoned order which should not be interfered with. Counsel further alleged that the petitioner had submitted a false affidavit to get his nomination accepted.
The bank’s counsel adopted these arguments and added that once an account is declared NPA, a separate order labelling the person as a defaulter is not needed. In their view, NPA status automatically meant that the borrower was a defaulter for the purpose of Rule 23(1)(b). They argued that outstanding dues existed on the date of nomination and the account had been treated as NPA even before nomination was filed.
The bank’s counsel also argued that later repayment of dues, during or after the election dispute, could not cure the disqualification that already existed on the date of nomination. They relied on:
1. Pundalik Vs. District Deputy Registrar, Supreme Court, dated 22.02.1991, reported in 1991 (2) SCC 423.
2. CWJC No. 15229 of 2017 decided on 09.01.2018 (Md. Shami Vs. The State of Bihar and Ors.).
The High Court, however, focused on the narrow legal question of maintainability of the election petition. It carefully examined its own earlier decision in Ram Dhyan Yadav and the Division Bench decision in Laxmi Sahani, both dealing with Rule 23(1) of the 1959 Rules.
In Ram Dhyan Yadav, the Court had held that where disqualification is alleged under Rule 23(1), an order declaring a person disqualified must first be passed in a duly constituted proceeding by the proper authority. Only after such an order, the person can be treated as disqualified from holding membership or office. The Court made it clear that an election petition is not the correct forum to first decide whether someone is a defaulter under Rule 23(1). If no prior disqualification order exists, the election petition itself is not maintainable.
This view was later approved by a Division Bench in Laxmi Sahani. In that case, the Court also highlighted that if a person fails to raise an objection to another candidate’s disqualification at the time of nomination, he cannot later challenge the election on that ground.
Applying these principles, Justice Reddy noted two important admitted facts. First, Respondent No. 8 had not filed any application under Rule 23(1)(b) before the competent authority to get a formal order disqualifying the petitioner from the post of Director. Second, there was no prior determination by any authority that the petitioner was a defaulter.
In such a situation, following Ram Dhyan Yadav and Laxmi Sahani, the Court held that an election petition challenging the petitioner’s election on the basis of alleged default under Rule 23(1)(b) was not maintainable. The complainant had, in the Court’s words, approached the “wrong forum” for the nature of grievance raised.
The Court distinguished the authorities cited by the bank, namely Pundalik and Md. Shami, holding that those judgments were based on different facts and therefore did not govern the present case.
On this reasoning, the Patna High Court concluded that the impugned order dated 28.03.2024 in Election Dispute Case No. 56/2023 was contrary to the provisions of the Bihar Co-operative Societies Rules, 1959 and also contrary to the binding precedents in Ram Dhyan Yadav and Laxmi Sahani. Accordingly, it set aside the Joint Registrar’s order.
The Court restored the petitioner to his position as Director of Patliputra Central Cooperative Bank Limited, Patna, with immediate effect.
At the same time, the Court was careful not to give any ruling on whether the petitioner was, in fact, a defaulter. In paragraph 15, the Court expressly stated that it had deliberately not gone into that question. It clarified that it would be for the competent authority to decide this issue if any application is filed under Rule 23(1)(b) of the Bihar Co-operative Societies Rules, 1959.
Thus, while the petitioner got back his post due to the procedural flaw in the manner his election was challenged, the door has been kept open for a proper disqualification proceeding under the Rules, if someone chooses to initiate it.
Why This Judgment Matters
This judgment gives clear guidance to members and candidates in cooperative society elections in Bihar, especially in cases involving alleged loan defaults.
First, it confirms that a person’s election as Director or office-bearer of a cooperative society cannot be cancelled through an election petition unless there is already a formal order of disqualification under Rule 23(1)(b) of the Bihar Cooperative Societies Rules, 1959.
Second, it stresses that objections to a candidate’s eligibility should be raised at the nomination stage or through a proper disqualification application, not later, after the results are declared.
For cooperative bank members and small borrowers, the ruling means that mere classification of an account as NPA or mere allegations of default are not enough, by themselves, to unseat an elected representative through an election dispute. A proper, separate process before the competent authority is required.
At the same time, the Court has also clarified that if such a proper application is filed under Rule 23(1)(b), the competent authority is free to examine whether the elected person is actually a defaulter. The judgment therefore balances fairness to elected candidates with the right of societies to seek disqualification through legally correct routes.
Legal Issues and Answers
- Issue: Can an election of a cooperative bank Director be set aside in an election petition solely on the allegation that the elected person is a loan defaulter under Rule 23(1)(b), without any prior disqualification order by the competent authority?
Answer: No. The Patna High Court held that questions of disqualification under Rule 23(1)(b) must first be decided in a duly constituted proceeding before the proper authority. In the absence of such a determination and without any objection at the nomination stage, an election petition challenging the election on that ground is not maintainable. - Issue: What is the effect of this finding on the petitioner’s position as Director?
Answer: The Court set aside the Joint Registrar’s order dated 28.03.2024 in Election Dispute Case No. 56/2023 and restored the petitioner as Director of Patliputra Central Cooperative Bank Limited, Patna, with immediate effect. - Issue: Did the Court decide whether the petitioner was in fact a loan defaulter on the date of nomination?
Answer: No. The Court expressly declined to decide whether the petitioner was a defaulter. It left that question open to be determined by the competent authority, if any application is filed under Rule 23(1)(b) of the Bihar Co-operative Societies Rules, 1959.
Cases Cited by the Court
- CWJC No. 10137 of 2015 decided on 08.02.2016 (Ram Dhyan Yadav Vs. The State of Bihar & Ors.) – relied on for interpreting Rule 23(1) of the Bihar Co-operative Societies Rules, 1959 and holding that disqualification must be decided in a separate proceeding, not through an election petition.
- CWJC No. 1616 of 2021 decided on 22.11.2021 (Laxmi Sahani Vs. The State of Bihar & Ors.) – Division Bench decision upholding and following Ram Dhyan Yadav and emphasising that objections to disqualification should be raised at the nomination stage.
- 1991 (2) SCC 423, Pundalik Vs. District Deputy Registrar – cited by the Respondent-Bank but held distinguishable on facts and not applicable to the present case.
- CWJC No. 15229 of 2017 decided on 09.01.2018 (Md. Shami Vs. The State of Bihar and Ors.) – also cited by the Respondent-Bank but found distinguishable.
Case Details
Case Number: Civil Writ Jurisdiction Case No. 7742 of 2024
Case Title: Rajeev Ranjan Vs. The State of Bihar & Ors.
Coram: Hon’ble Mr. Justice A. Abhishek Reddy
Date of Judgment: 22-09-2026
Citation: 2026 (6) PLJR 230
Advocates:
- For the petitioner: Mr. Kanishka Shankar, Advocate
- For the State/Respondents: Ms. Archana Jha, GP 40
- For Respondent No. 8: Mr. Keepak Kishore, Advocate; Mr. Prashant Kr. Singh, Advocate
- For PPCCB: Mr. Bindhyacal Rai, Advocate
- For the Bank: Mr. K. K. Sinha, Advocate
Nature of the Case: Writ petition challenging an order passed in a cooperative election dispute (Election Dispute Case No. 56/2023) concerning disqualification of an elected Director of a cooperative bank.
Link to Judgment: https://patnahighcourt.gov.in/viewjudgment/MTUjNzc0MiMyMDI0IzEjTg==-Kyhx–ak1–xwovN4=
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