Where it appears to the Registrar that any person has contravened the provisions of this Act, the rules or bye-laws-
(a) by sitting or voting or exercising his rights as a member, or as a member of any managing or controlling body, or voting in the affairs of a registered co-operative society as a representative of another co-operative society which is a member of such co-operative society, when such person was not entitled to sit, vote or exercise such rights, as the case may be, or
(b) by utilizing the
(i) Government Financial Assistance
(ii) Co-operative Societys Fund and
(iii)Loan for a purpose different from that for which it was granted, the Registrar may, after affording such person an opportunity to be heard, by an order in writing direct him to pay the assets of the cooperative society by way of penalty such sum not less than five thousand rupees as the Registrar thinks fit.