The MLAs also discussed the reasons behind AAP's "disappointing" performance in the state, where the pollsters had predicted a sweep by it.
62-year-old Phoolka, known for fighting cases of 1984 anti-Sikh riots victims, was the only prominent party leader to have won the polls in Punjab.
He had resigned from all posts of AAP in September 2015 to focus on providing justice to 1984 anti-Sikh riot victims.
Sukhpal Singh Khaira was appointed party's chief whip in Punjab Assembly.
"We will fight for the rights of the people in Punjab in the assembly as well on the streets and highlight the plight of farmers," Phoolka said after being chosen as the leader of the AAP legislature party.