Lingaraja Rath, J.:-

(1) The writ petitioner is the appellant. He had stood as surety for a loan advanced by the third respondent to the fourth respondent. The repayment of the loan having been defaulted,the dispute raised by the third respondent was referred by the registrar under section 61 of the a. P. Cooperative societies act, referred hereinafter as the 'act',to the first respondent for adjudication. To the dispute both the fourth respondent and the petitioner - appellant were parties. The arbitrator passed the award on 6 - 1 - 1986 for sum of rs. 54,314. 62 ps. With interest at 13. 5%. In executing the decree in pursuance of the award,the first respondent issued order dated 18 - 8 - 1988 in e. P. No. 43/87/87 a. S. O. For recovery of the amount in monthly instalments of rs. 500/ - till the whole amount was discharged. It is this order which was challenged in the writ petition, which having been dismissed, the present appeal has been preferred.

(2) Mr. Srinivas, the learned counsel for the appellant has strenuously assailed before us the proceedings on various grounds. The submissions are -

(a) section 61 of the act does not contemplate the entertainment of a, dispute against a non - member surety, which the appellant is, for which reason, the award made against the appellant is unenforceable;

(b) the fourth respondent being an individual was not eligible to have become a member of the third respondent - society which is a federal one and as no loan could have been advanced to him,the grant of loan to him was illegal for which reason the suretyship of the appellant to such loan was also not sanctioned by law;

(c) the first proviso to section 19 of the act was brought in by way of an amendment by act 14 of 1966 and being a later provision would override sections 19 and 20 of the act which sections must be read as integrated sections controlled by the proviso for which the fourth respondent could not have been admitted as a nominal member; and

(d) the third respondent - bank was formed out of the amalgamation of andhra state cooperative bank limited and hyderabad cooperative apex bank limited made under the provisions of act 12 of 1963 which act provided the amalgamation to be made in pursuance of a scheme evolved by the registrar of the cooperative societies under section 3 of the act. That the provisions of the scheme would override the provisions of the andhra pradesh cooperative societies act and that the scheme prohibits admission of individual as members of the bank.

We propose to take up the submission seriatim.

(3) In negativing the contention of non - member surety being not within the ambit of the act, the learned single judge relied upon a division bench decision of this court in (1) w. A. No. 516 of 1972 decided on 27 - 7 - 1973 which held that a surety, by offering himself as such,becomes attached to the loan transaction and hence comes under the liability which is the same as that of the principal debtor and hence he is liable to be proceeded against in a dispute proceedings under sections 61 and 62 of the act. Mr. Srinivas seeks to distinguish the decision on the ground that in the case before the court the surety was also a member of the credit cooperative society and hence was a person who could be proceeded against. But that the question as to whether a non - member surety could be a party to the dispute did not arise before the court in that case. The facts of that case were that the writ petitioner - appellant was the president of the credit cooperative society which obtained the loan from nellore district cooperative central bank and the appellant stood surety for the loan. The loan having not been cleared by the society, the dispute was commenced against the credit cooperative society as well as the appellant as the surety. Though, admittedly,the appellant was the member of the loanee society yet he could not have become member of the cooperative central bank in view of the bar contained in first proviso of section 19 which has been brought to our notice by mr. Srinivas himself in a different context. The question before their lordships in the case vis - a - vis the surety, as to whether the dispute was maintainable against him, was that of a non - member only. In deciding the matter the court observed :

"when once it is found that the transaction of loan constitutes dispute within the meaning of section 61, then the petitioner who stood surety for the loan, gets himself attached to that dispute and therefore that dispute will be covered by clause (d) even as against the surety."

(4) While the submission raised by mr. Srinivas is that wholly answered by the division bench decision, yet since the submission has been urged before us with great force, we also propose to independently examine the decision. Section 61 of the cooperative societies act enumerates the type of disputes that can be referred for arbitration under the act substantially. So far as individuals are concerned, the category of persons who can be impleaded as parties to the, past members, person claiming through them or through deceased members, officers or agents or employees of the society etc. It is for that reason the argument is advanced that a surety, who is not a member of the society, cannot be impleaded as party to the dispute before the arbitrator and that, if at all the society wants to proceed against the surety, it has to file a civil suit in the proper court.

(5) Section 128 of the indian contract act, 1872 provides that the liability of the surety is coextensive with that of principal debtor unless it is otherwise provided in the contract. The liability created against the surety by the provision is absolute and is applicable to all transactions wherever a person binds himself as the surety for a loan advanced. There is no limitation to the liability so created that it is enforceable only through a civil suit and not otherwise. Wherever statutory provision is made for realisation of debts from the loanees, which loans are also covered by surety arrangement, the procedure contemplated under the respective statutes to proceed againstthe principal debtorwould ipso facto bring within its fold to proceed against the surety because of the statutory liability imposed under section 128 of the contract act, 1872. A surety accepts his role conscious of the legal provision that his liability is coextensive with that of the loanee and that he is subject to the same conditions and limitations as regards recovery of the loan as are applicable to the debtor himself. It is for such reason that the court held in w. A. No. 516 of 1972 cited supra that the surety by offering himself as such gets himself attached to the dispute and would be covered under clause (b) of section 61 (1) of the act read with the explanation (ii) to the sub section. The explanation provides clue and support to the view taken by us and may be usefully extracted along with section 61 (1) (b) :

"section 61: dispute which may be referred to the registrar : - (1) notwithstanding anything in any law for the time being in force, if any dispute touching the constitution, management or the business of a society, other than a dispute regarding disciplinary action taken by the society or its committee against a paid employee of the society, arises - (a). (b). (c). Explanation: for the purposes of this sub - section a dispute shall include - (i). (ii) a claim by surety againstthe principal debtor where the society has recovered from the surety amount in respect of any debtor or other amount due to it from the principal debtor as a result of the default of the principal debtor whether such debt or other amount due be admitted or not;"

From clause (ii) of the explanation it is apparent that the act contemplates the entitlement of the society to recover the loan from the surety and the clause purports to grant permission to the surety to resort to filing of dispute before the arbitrator for realisation of the loss suffered by him on account of the principal debtor. If a surety can come as a plaintiff before the arbitrator to recover his claim against the principal debtor on account of the fact that the cooperative society has realised its dues from him, one fails to understand, by what rational interpretation, the society would be debarred proceed against the surety in a dispute to realise its loan. To accept the submission of mr,srinivas would mean that while the surety would have to take resort to civil suit to collect its dues from the society, the latter would have the right to resort to the summary remedy before the arbitrator to realise his own dues from the debtor. The interpretation would lead to incongruity and would plainly border upon absurdity, and has to be rejected.

(6) The argument is also liable for rejection on consideration of the object of the enactment. Sections 61 and 62 of the act are special provisions providing separate modes of recovery of the loans advanced by the societies. It is well - known that in interpreting the statute, that interpretation which advances the purpose of the legislation is to be adopted in preference to the one which retards it and that the interpretation must proceed to find the meaning of the statute in its contextual concept. Speaking of contextual interpretation, it was observed by justice o. Chinnapa ready in (2) air 1987 sc 1023:

"33. Interpretation must depend on the text and the context. They are the basis of interpretation. One may well say if the text is the texture, context is what gives the colour. Neither can be ignored. Both are important. That interpretation is best which makes the textual interpretation match the contextual. A statute is best interpreted when we know why it was enacted. With this knowledge, the statute must be read, first as a whole and then section by section, clause by clause, phrase by phrase and word by word. If a statute is looked at, in the context of its enactment, with the glasses of the statutemaker, provided by such context, its scheme, the sections, clauses, phrases and words may take colour and appear different than when the statute is looked at without the glasses provided by the context. With those glasses we must look at the act as a whole and discover what each section, each clause,each phrase, and each word is meant and designed to say as to fit into the scheme of the entire act. No part of a statute and no word of a statute can be construed in isolation. Statutes have to be construed so that every word has a place and everything is in its place."

(1). Applying the principle so enunciated, we are of the view that since one of the functions of the cooperative societies is to advance loan to its members and it is in the general nature of the things that sureties are insisted upon for the purpose of securing the loan, the very scheme of the functioning of cooperative societies would be frustrated if in every case the society is compelled to file a civil suit, notoriously for its time consuming process, to recover its loans. To hold as such would to render sections 61 and 62 of the act nonfunctional.

(7) The second and third submissions argued by mr. Srinivas may be taken up together. Section 2 (i) of the act is as follows:

" 'member' means a member of a society, and includes any nominal or associate member. "

Section 19 is the provisionregarding eligibility for membership which permits, inter alia, so far as an individual is concerned, to become a member if has attained majority, is of sound mind and belongs to a class of persons, if any, for whom the society is formed, and possessing the required qualifications, to become a member. The section was amended by act 14 of 1966 to add the first proviso in the following words.

"provided that no individual shall be eligible for admission as a member of any financing bank or federal society."

Section 20 runs as follows:

"nominal or associated memben - (1) notwithstanding anything in section 19, a society may admit any person as a nominal or an associate member but such member shall not be entitled to vote.

(2) a nominal or an associate member shall not be entitled to any share in any form whatsoever in the profit or assets of the society as such member. Such member shall not have privileges, rights and liabilities of a member except those specified in the bye - laws of the society. "

Developingthe submission it is contended by mr. Srinivas that as 'member' includes a nominal or associate member and as the third respondent being a financing bank is prohibited to take any individual member, the provision for admission of associate or nominal members as provided under section 20 must be confined to societies other than financing bank or federal society. It is his submission that the proviso as above, coming later than the enactment of section 19 or section 20 in the parent act of 1964, must be construed as an independent provision of mandatory application overriding both sections 19 and 20 for which reason the fourth respondent could not have been admitted as member to the third respondent - bank. S ince he could not have been admitted as such member, the appellant becoming a surety for him is also an unauthorised act for which the dispute could have been filed neither against the fourth respondent or the appellant. The submission though ingenuous, yet is without substance. Even while section 19 had been enacted without the first proviso, section 20 was in the statute book and made an independent provision by itself by carving separate class of membership as nominal or associate members stipulating that such members shall not be entitled to vote or to any share in any form whatsoever in the profits or assets of the society and shall not have privileges, rights and liabilities of a member except those specified in the bye - laws of the society. Nominal or associate members hence are not the ordinary regular members whose membership is provided for under section 19. There is no warrant of interpretation to read sections 19 and 20 together and further reading the proviso which was enacted into section 19 as also having been enacted to section 20. No canon of interpretation of statute requires such interpretation to be given. It is well known that the filed of operation of a proviso, which has overriding effect over the section to which it is enacted, and is mostly in the nature of an exception, is within the field covered by the section itself but does not extend beyond it. An exception always operate exclusively only in the field it occupies and has no application outside it and to that extent only the generality of section is excluded. Barring such operation of the proviso, the section operates uninhibitedly within its own sphere. Discussing the scope of a proviso the supreme court pointed out in a. N. Sehgal and others v. Raja ram sheoram and others (3) air 199 1 sc 1406:

"it is cardinal rule of interpretation that a proviso to a particular provision of a statute only embraces the field which is covered by the main provision. It carves out an exception to the main provision to which it has been enacted by the proviso and to no other. The proper function of a proviso is to except and deal with a case which would otherwise fall within the general language of the main enactment and its effect is to confine to that case. Where the language of the main enactment is explicit and unambiguous, the proviso can have no repercussion on the interpretation of the main enactment so as to exclude from it, by implication what clearly falls within its express terms. The scope of the proviso, therefore, is to carve but an exception to the main enactment and it excludes something which otherwise would have been within the rule. It has to operate in the same field and if the language of the main enactment is clear, the proviso cannot be torn apart from the main enactment nor can it be used to nullify by implication what the enactment clearly says no set at naught the real object of the main enactment, unless the words of the proviso are such that it is its necessary effect"

Mr. Srinivas also brought to our notice a division bench decision of this court in t. Sudhakar reddy. Government of andhra pradesh (4) 1991 (3) alt 173 in which an exhaustive discussion was made regarding the field of operation of principles and provisos and also made references made by various authors. We would only refer to certain passages noted in the decision of eminent authors.

(8) Craies (craies on statute law, 1963 edition, page 217) the effect of an excepting or qualifying proviso, according to the ordinary rules of construction, is to except out of the preceding portion of the enactment, or to qualifysomthing enacted therein which but for the proviso cannot be construed as enlarging the scope of an enactment when it can be fairly and properly construed without attributing to it that effect. Maxwell observed in his interpretation of statutes thus:

"difficulties sometimes arise in construing provisos. It will, however, generally be found that inconsistencies can be avoided by applying the general rule that the words of a proviso are not to be taken "absolutely in their strict literal sense", but that a proviso is "of necessity. Limited in its operation to the ambit of the section which it qualifies". And, so far as that section itself is concerned, the proviso again receives a restricted construction; where the section confers powers, "it would be contrary to the ordinary operation of a proviso to give it an effect which would cut down those powers beyond what compliance with the proviso renders necessary. If, however, the language of the proviso makes it plain that it was intended to have an operation more extensive than that of theprovision which it immediately follows, it must be given such wider effect. If a proviso cannot reasonably be construed otherwise than as contradicting the main enactment, then the proviso will prevail on the principle that "it speaks the last intention of the makers". (12th edd. Page 189) the learned judges also referred to. Mollins vs. Treasurer of 'survey (5) (1830) 5 qbd 170,173 where lush, j observed: " when one finds a proviso to a section, the natural presumption is that, but for the proviso, the enacting part of the section would have included the subject matter of the proviso".

(much stress is laid by mr. Srinivas on the observation of the supreme court in state of rajasthan v. Leela (6) air 1965 sc 1296 in paragraph 14 to the following effect.

" the primary purpose of the proviso now under consideration is, it is apparent, to provide a substitute or an alternative remedy to that which is prohibited by the main part of section 4 (1). There is therefore no question of the proviso carving out of any portion out of the area covered by the main part and leaving the other part unaffected what we have stated earlier should suffice to establish that the proviso now before us is really not a proviso in the the accepted sense but an independent legislative provision by which to aremedy which is prohibited by the main part of the section, an alternative is provided. It is further obvious to us that the proviso is not coextensive with but covers a field wider than the main part of section 4 (1)"

(9) We are unable to see any support for the contention advanced in the passage. In the case before the apex court, the proviso occuring in section 4 (1) of rajasthan city municipal appeals (regulation) act, 1950 was considered as not a proviso in that accepted sense but as an independent legislative provision intended to give an alternate remedy while prohibiting appeals to be preferred against orders passed under section 3 of that act. By its very nature, the proviso extended to cover a field wider than the main provision. But there is no warrant to construe the proviso to section 19 to be a similar nature. Not only the words but also the very purport or import of the proviso does not convey it as covering the field of section 20 also. " in - so - far as the definition of 'member' in section 2 (j) is concerned, it is in two parts. One exclusive and the other inclusive. So far as the exclusive part is concerned, it means a member of a society, provisions regarding eligibility of whom is made under section 19 of the act. So far as the inclusive part is concerned, the corresponding provision is made in section 20 of the act. Hence, while member in the general sense would also mean associate or nominal members wherever provision is made for members in general , yet the distinction between the two categories is too clearly drawn but in the respective sections 19 and 20 and there is no scope for confusion between the two. The sections in which the word 'member' has been used in its general sense meaning as applying to all categories of members including associate or nominal member are illustrates sections 61 and 62 which contemplate disputes to be filed and decided by or against all members.

(10) The next submission of mr. Srinivas is based upon the a. P. State cooperative bank (formation act 1963) (act 12 of 1963) referred hereinafter as'the formation act'. In short, the submission is that since the formation of the third respondent - bank was made by amalgamation of two banks, the andhra state cooperative bank ltd, and hyderabad cooperative apex bank ltd. , and that the formation act itself stipulated that the amalgamation was to be made in pursauance of the scheme made by the registrar of the cooperative societies, the scheme would override the provisions of the cooperative societies act. According to him, the scheme also prohibits any individual membership of the third respondent - bank. An analysis of the provisions of the formation act and the scheme does not yield any such result. Section 3 (1) of the formation act provides that after the commencement of the act, the registrar shall place separately, before the meetings of the general bodies of the two amalgamating banks, a scheme prepared by him 'which was to contain proposals by the andhra pradesh state cooperative bank ltd. , having for the amalgamation of the banks and for such other matters as are in his opinion connected with or incidental to, the amalgamation. Subsection (3) of section 3 expressly provided that the new bank was to be registered under the 1932 cooperative societies act which have been repealed and replaced by the present act with the existing societies under the previous act as being deemed to have been registered under the present act. The scheme was thus one aimed exclusively to facilitate the amalgamation and make provision for that purpose and matters incidental there to. The scheme is not intended to provide for matters after the amalgamation was effected - and the society is registered underthe cooperative societies act. Section 7 of the formation act, in - so - far as the provisions of the previous act, will have overriding effect over the cooperative societies act 1932 or 1952 notwithstanding anything inconsistenttherewith. The scheme framed under section 3 (1) made provision in clause (4) that the amalgamated bank shall be governed by the provisions of the andhra pradesh (andhra area) cooperative societies act vi of 1932 and by the set of bye - laws to be registered by the registrar. Clause (5) provides that the membership of the amalgamated bank on its formation consists of the cooperative central banks registered as such and affiliated to the andhra cooperative bank, the cooperative central banks registered as such and affiliated to the hyderabad cooperative bank and the government of andhra pradesh. This shows that all memberships which were there prior to the formation of the two respective constitute bank; were being preserved for the amalgamated bank. Clause (6) (i) and (ii) likewise preserve, on the one hand, all registered cooperative societies other than the cooperative central banks affiliated to the erstwhile hyderabad cooperative bank as nominal member of the amalgamated bank and on the other hand, the individuals holding preference shares in the hyderabad cooperative bank and indebted to it to be taken over as nominal members of the amalgamated bank. Clause (6) (iv) provides that all such nominal members taken over by the amalgamated bank were ceased to be nominal members of the amalgamated bank on their discharging the loans and others liabilities due by them. These provisions in the scheme would go to show that continuance of nominal membership was expressly recognised. Theconceptofnominal member is available only in the parent cooperative societies act. The operation of application of section 20 to amalgamated bank was never excluded and indeed the act itself made the provision that the bank would be registered under the cooperative societies act, 1932. Its applicability and induction of nominal members is in no way prohibited. All the sub - missions raised by mr. Srinivas thus fail.

(11) After the close of the arguments of both sides, a submission was made by mr. Srinivas that the direction of the learned single judge given in the judgment directing the appellant to file an appeal within four weeks from the date of disposal of the writ petition before the tribunal be upheld and the writ appeal may be disposed of in the same terms. We are not inclined to agree for the reason that such submission was made at the outset and considerable time of the court was spent in hearing the matter at length on all questions raised. We think it is against the interest of justice and public policy if the questions as were advanced before this court and on which the court had expressed its mind is permitted to be reagitated before any adjudicating forum only because mind of the court is known. We hence reject such request.

(12) In the result, the appeal has no merit and is accordingly dismissed with costs. Advocate's fee rs. 1000/ -.