' FAZAL-E-MIRAN CHAUHAN, J.---This order shall dispose of Writ Petition No,5570 of 2005 to call in question the orders dated 19-7-2005 and 4-1-1997, passed by the Secretary, Co-operatives, Government of Punjab, Lahore and Assistant Registrar Co-operative, Kabirwala, Tehsil Kabirwala, District, Khanewal (respondents Nos.1 and 3), declaring the same to be illegal and without lawful authority.
2. Briefly, the facts of the case are that the petitioner-Society obtained loan of Rs,2,90,000 for the Rabi crops for the year 1995-96 from the Punjab Provincial Co-operative Bank Ltd. Makhdoompur Poharan, Kabirwala through its Bank Manager (respondent No,5). The loan was to return by 30-6- 1996. Due to natural calamity, the Society could not return the loan by due date and became defaulter. Respondent No,5 filed a petition under sections 22-A and 50-A of Co-operative Societies Act, 1925 for recovery of Rs,3,26,947 (detail of which has been given in the order of respondent No,3). Respondent No,3, after observing all process for the service of the petitioner, on the basis of ex parte proceedings, passed the order under section 50-A ibid. Holding that the petitioner-Society is liable to pay Rs,3,26,947 i.e, the principal amount Rs,2,90,000 plus 26,140 mark-up /profit and cost of proceeding Rs,10,807. No order as to further mark-up /interest was passed vide his order dated 4-1-1997. No appeal against the order was filed by either of the party and it attains finality. The petitioner-Society made same payment towards the adjustment of the decretal amount and paid.
During the year 2003, respondent No,5 issued 4th recovery package and as per this package, the petitioner-Society, being covered package of Kharif 1995 to Rabi 2000-2001, deposited Rs,3,03,071 as principal amount 50% mark-up and Rs,11,000 execution charges and claimed remission of 50% in the mark-up awarded by respondent No,3. Respondent No,5 instead of adjusting the amount towards principal amount, adjusted 50% mark-up, as per decision of respondent No,3, but claimed running mark-up. The petitioner-Society filed an application before respondent No,4 with the prayer that the mark-up awarded by respondent No,3 be charged but the application was dismissed vide order dated 29-1-2004. Against this, appeal before respondent No,1 was also dismissed.
3. It is argued by learned counsel for the petitioner that the charging of mark-up as running mark- up is in violation of order dated 4-1-1997. No order for payment of future mark-up was passed and respondent No,5 is illegally charging mark-up on running basis. The mark-up could not be charged beyond the date agreed between the parties. Reliance is placed on Bashir Begum and 5 others v.
Agricultural, Development Bank of Pakistan 2005 CLD 373 Lahore and Muhammad Ishaque v.
Returning Officer and another 2005 CLC 619 (Karachi). No appeal against the order of respondent No,3 was filed and the same is binding on the parties. Respondent No,1, while dismissing the appeal of the petitioner, has totally ignored that similar identical cases were decided on 19-1-2001 by him.
No reason or justification is given for the decision made by respondent No,l.
4. Conversely, learned counsel for the respondents argues that the petitioner-Society is not an aggrieved party, as no order has been passed against the Society. The managing committee is likely to pay the outstanding amount. No amount was deposited by the petitioner-Society, as per decision of Assistant Registrar nor the respondent-Bank was party before the Assistant Registrar.
Further contends that the order was passed ex parte and having come to know about the same, respondent No,5 approached respondent No,3, who clarified that in cases, where mark-up was fixed, Bank should charge the fixed markup and where the agreement of running mark-up, the Bank can recover the same till the recovery of the amount. The petitioner-Society did not avail the package announced by the respondents nor any amount was deposited by the petitioner.
5. I have heard learned counsel for the parties and perused the record minutely. Admittedly, the default of the petitioner-Society was unearthed by the auditors and it was observed by the auditors that the total fertilizer was misappropriated by the Management of the Society and the benefit of the same was not passed to its member. The auditors fixed the liability against the Management of the Society. Report under sections 22-A/50-A of the Societies Act, 1925 was sent to the Inspector of the Halqas, who sent the case to the Assistant Registrar (respondent No,3).
Respondent No,3, issued a letter in the name of the Member of the Society for 28-11-1996. On his refusal, service through publication in the Newspaper Nawa-e-Waqt, Multan, was ordered. Notice was published in daily Nawa-e-Waqt in the name of the Society and its member. On 28-11-1996, they were proceeded ex parte and the Assistant Registrar proceeded to pass a decree in favour of the respondents (Co-operative Bank) to the sum of Rs,3,26,947, the amount due against the petitioner-Society and its member. No order for future interest or running mark-up was passed.
This order was not challenged in appeal, thus, the same has attained finality. On the announcement of relief package by Respondent No,5 vide Circular No,104/2003, dated 17-9-2003, to avail the package, the petitioner deposited the principal amount of Rs,2,93,000 and Rs,13,070/50% of the mark-up, awarded by the Assistant Registrar (respondent No,3) and also Rs,11,000 execution charges. The respondent-Bank refused the package to the petitioner, on the pretext that as per agreement, the petitioner was to pay markup on the running basis till the repayment of the loan.
6. I have gone through the report and parawise comments, submitted by the Assistant Registrar, Co-operative, Tehsil Kabirwala (respondent No,3) in Appeal No,64 of 1984. In para. No,5 of the report, it was stated by respondent No,3 that in similar cases of different co-operative societies, the then Secretary Government of Punjab, Co-operative, Department, Lahore vide his order dated 19- 6-2001, while deciding the appeals hold that, the principal amount, interest and the other charges shall be realized according to the award/decree in each case and not beyond this. The learned respondent No,1 ignoring the above referred report, proceeded to dismiss the appeal, by holding that respondent No,3, vide his order dated 4-1-1997, had not ordered that mark-up be charged on fixed basis thus same is to be charged on running basis and the petitioner is bound to pay the same. This observation of respondent No,1 is negated by the fact that, after decision of respondent No,3, the respondent-Bank sought a clarification from respondent No, 3 of his order, passed in different case as to whether mark-up is to be charged on running basis or fixed mark-up. In reply to this, a letter was issued by respondent No,3 on 31-3-2000 after one year of his order dated 4-1- 1997 allowing the respondent to charge mark-up on running basis. This clarification was made without notice to the petitioner-Society, which is to be adversely affected by the clarification of respondent No,3.
7. Respondent No,3, present in Court, admitted that no notice was issued in the name of petitioner- Society and further stated that the letter dated 31-3-2000 was issued on administrative side and not on the judicial side of the matter. Thus, it is clear that the letter dated 31-3-2000 of respondent No,3 was issued by him on administrative side and does not effect the rights, which had accrued to the petitioner vide order dated 4-1-1997, which is silent about the charging of mark-up on fixed or running basis but at the same time, a decree for Rs,3,26,947 was passed, which includes principal amount, the mark-up up to 30-6-1996 with cost. No order as to future markup was passed. The order dated 19-6-2001 of Secretary to Government of Punjab, Co-operative Department is annexed with the reply of the respondent-Bank. In para No,4 of the said order, it is recorded as under:-- "Taking all the pros and cons of the issue into consideration, this Court would direct that in all the cases, as mentioned above, the amount of principal and the interest and on account of other charges shall be realized by the Bank according to the award/decree in each case and nothing beyond that. Those societies which have already paid everything according to the award/decree, they should not be asked to pay anything more. Those who are prepared to clear their dues inaccordance with award/decree up to 30th September, 2001 from, hence, they should be allowed to do so. This concession should be widely published and intimated to each debtor Society. In respect of those debtor societies, which will fail to avail of this concession up to 30th September, 2001, the Bank shall propose some penalty and for determination thereto, the matter will be referred to this Court."
8. It was rightly observed in the above said order that the principal amount/interest/mark-up or other charges shall be realized by the Bank according to the award/decree in each case and nothing beyond that. The impugned order passed by respondent No,1 is based on conjectures and surmises. The interpretation made by respondent No,1 is not based on sound reasoning. The observation and directions given in the similar case by Mian Khuda Bakhsh, Secretary to Government of the Punjab, Co-operative Department dated 19-6-2001 appears to be based on sound reasoning.
9. In this view of the matter, instant writ petition is allowed. The order passed by respondent No,1 is set aside and the respondent-Bank is directed to charge the mark-up granted by respondent No,3 vide order dated 4-1-1997.