1. MUHAMMAD AFZAL ZULLAH, J. This appeal through special leave arises out of judgment, dated 19-10- 1973 of the Sind High Court, whereby appel--lant.'s Constitutional Petition against recovery of Co- operative Bank loan, by the respondents was dismissed.
2. Appellant's brother was a Director of the City Co-operative Bank Ltd., Hyderabad. He raised loans from the said Bank allegedly for his own, benefit in the name of 15 persons including the appellant.
3. The transactions, it is stated, were of benami character. The original loan in the name of the appellant by way of overdraft was Rs. 21,063. It was drawn on 7-11-1958. The Bank obtained an award on 17-1-1966 regarding this loan for Rs. 44,374, under section 54 of the Sind Co-operative Societies Act, 1925. It was made up of the principal amount as also the interest accruing thereon. The recovery of loans (Rs. 19,18,988.23) allegedly obtained by Haji Abdur Rehman in the name of various persons was sought to be effected by the Department from all those persons under the West Pakistan Co-operative Societies and Co- operative Banks (Repayment of Loans) Ordinance XIV of 1966. Before the proceedings could be concluded against those persons, Haji Abdur Rehman undertook to make the payment because he admitted himself to be a beneficiary thereof. A Deputy Registrar acting on the said undertaking by his order dated 16-10-1968, directed recovery of the outstanding amount which at the relevant time stood at Rs. 15,81,199 from Haji Abdur Rehman.
4. The Bank accordingly moved the Assistant Registrar for the recovery of the balance loan which also included the amount standing in the name of the' appellant. Proceedings for the recovery of the said amount were also initiated under M. L. O. 241 (Martial Law Order of 1969). Haji Abdur Rehman offered his property for satisfaction of the outstanding debt through an affidavit, dated 23-1-1971. The Martial Law Authorities directed its auction. Haji Abdur Rehman died on 27-5-1972. It appears that after his death, the recovery of the amount due could not be made from the auction of the property of Abdur Rehman because as stated several persons including his widow submitted formal objections relating thereto. Accordingly, a notice was served on the appellant on 28-9-1973 to pay up a sum of Rs. 88,740 which included the original loan obtained by the appellant through overdraft as also the interest accruing thereupon for such a long time; failing such payment action was sought to be taken for the recovery of the amount under the West Pakistan Land Revenue Act, 1967.
5. The appellant challenged the notice and action for the recovery of "the amount of loan/award" from him as illegal and without lawful authority in writ jurisdiction of the High Court. It was dismissed by a learned Division Bench on 19-10-1973. It was held thot apart from the position of Abdur Rehman as beneficiary, the appellant was nonetheless a "borrower" as defined in clause
(bbb) of section 2 of the Ordinance; that there was no determination under section 6 of the Ordinance that the appellant was not liable to pay the amount in question; that the decision of the Deputy Registrar on the offer of Haji Abdur Rehman to direct recovery from him did not amount to exoneration of the appellant and others who were said to be in benami character vis-a-vis Abdur Rehman.
6. Leave to appeal was granted to consider the question whether "in the various orders passed by the authorities either under the Co-operative Societies Ordinance XIY of 1966, or the Martial Law Order the appellant had been lawfully exonerated of his liabilities. And further whether the authorities concerned after having proceeded against Haji Abdur Rehman for the recovery of the amount could resile from this position and seek recovery from the appellant particularly when .Haji Abdur Rehman had been treated as the beneficiary regarding the loan formally obtained by the appellant.
7. The provisions of the Co-operative Societies and Co-operative Banks (Repayment of Loans)
8. Ordinance, 1966, relied upon by the learned counsel are as follows: "2. Definitions.-In this Ordinance, unless there is anything repugnant in the subject or context--
(a) .
9. (b)
(bb) 'Benami loan' means a loan the real beneficiary or recipient whereof is a person other than the person in whose name the loan is advanced or granted;
(bbb) 'borrower' includes in the case of a Benami loan, the real beneficiary or recipient of loan;
(c) ------------------------* to------------------------ (e).
(f) "loan" means a loan (including a Benami loan, or any transaction which in the opinion of the Registrar is in substance a loan), whether of money or in kind, which is not secured or is insufficiently secured, and taken from a co-operative society by any person, whether a member of such society or not, or from a co-operative bank by any person but not a co- operative society, and includes-
(i) ------------------------. To ---------------------------.. (iii)
10. "6. Determination of liability when loan is not admitted.-Where any borrower or his surety, to whom notice under section 5 is issued, does not admit the loan or any liability arising therefrom, such borrower or surety, as the case may be, shall, within thirty days of the receipt of the notice, submit, either personally or by registered post (acknowledgment due), a written statement to that effect to the Registrar or the Assistant Registrar, by whom such notice was issued or caused to be issued, and such Registrar or Assistant Registrar, as the case may be, thereupon shall cause notice to be issued to the Co--operative Society, or the co-operative bank, as the case may be, and in the case of a Benami loan, to the alleged beneficiary, and shall, after making such inquiry as he may consider necessary and giving the parties a reasonable opportunity of being heard, decide the matter.
7. Securing and repayment of loans.-Within sixty days of the service of the notice under section 5 in a case where the borrower does not deny the loan or the liability arising therefrom, and in the other case, within sixty days of the decision of the Registrar or the Assistant Registrar, as the case may be, under section 6, the borrower and his surety shall- , .
(a) --- . To .
11. Apart from the forequoted provisions, it would be 'necessary to reproduce some of the provisions of the Co-operative Societies and Co-operative Banks (Repayment of Loans) Order, 1972 (Martial Law Order No. 241), they are:- 2.-(1) Unless the context otherwise requires-
(a) "borrower" means a person who has. Obtained a loan from a Co--operative Bank or a Co- operative Society or his surety, or, in case of a Benami loan, a person who is the real beneficiary or recipient of the loan, and includes the legal heirs and the successors-in-interest of any such person or surety;
(b) .; and (c) .
(2) . .
3. All borrowers against whom the total amount of loan due, including interest thereon, exceeds Rs.
12. 10,000 and who have not secured the loan in the manner provided in section 7 of the Ordinance, or having secured it, are not repaying or have not repaid it in the manner provided in the Ordinance.
13. 6.-(1) If any borrower does not pay a loan in the manner provided in paragraph 3 and is not prosecuted, or if prosecuted, is not convicted, the Registrar or an officer authorised by him in this behalf, may recover such loan by attachment or by attachment and sale of movable and immovable property and other assets belonging to him not--withstanding any alienation made by him by way of sale, gift, exchange, will, lease or by any other mode by any Court or authority of such property and assets in favour of any person after the date of grant of loan."
14. It cannot be denied that the appellant was adjudged as the actually borrower in the original award. The recovery proceedings were also initiated against the appellant. Not only this but he had also filed appeals against the recovery. Although during the arguments, learned counsel for the appellant stated that Haji Abdur Rehman used to conduct all the proceedings in the name of the appellant, yet it appears from the grounds of appeals that the appellant was not unaware of them.
15. Not only this it also appears that he actively participated therein because in one of the grounds of appeals, it was submitted by the appellant that he could not appear on a certain date on account of his illness. He had submitted a Medical Certificate in support of his averment. It is not possible (from the documents placed on the record in both the paper-books, one prepared by the appellant and the other by the respondents), to give a finding contrary to the findings contained in the award as also the findings rendered in the impugned judgment, that the appellant in reality had no concern with the loan obtained in his name on an overdraft and that the only beneficiary was his brother Haji. Abdur man. The circumstance that the latter offered to pay the amounts obtained by all those persons against whom proceedings had been initiated for recovery would also not be conclusive proof of the fact that Haji Abdur Rehman alone was the beneficiary of all these loans. In this context, it is not within the scope of this appeal nor was it necessary for the High Court to go into the details as to what benefits partial or total the appellant and/or his brother Haji Abdur Rehman obtained from the loan taken in the name of the appellant. The interpretation by the High Court of the order of the Deputy Registrar wherein he acted on the offer of Abdur Rehman and ~ directed the recovery of the loan from him on account of the offer is notwith-1 standing as has been rightly held by the High Court, it would not necessarily show that the appellant was exonerated by the Deputy Registrar. Same would apply to the documents/statements of accounts prepared during the recovery proceedings subsequently conducted against Abdur Rehman.
16. Notwithstanding the afore stated factual position, it needs to be examined, as indicated in the leave granting order, whether the impugned recovery could be made from the appellant or in other words there is any bar in this behalf in any of the provisions relied upon by the learned counsel. The definition of `borrower' as contained in M. L. O. 241 is wide enough to encompass the case of a benami loan. And in that context the person who 'obtained' the loan as also the person who is real `beneficiary' or further the person, who is the recipient of the loan, all would fall under the definition of `borrower'. Even if this definition is to be read with the definition of `borrower' contained in the Repayment of Loans Ordinance, 1966, it will not be of any help to the appellant.
17. Clause (bbb) of section 2 thereof definesi 'borrower' as including in the case of a 'benami loan', the real beneficiary or recipient of loan. Obviously, it does include a person like the appellant in the present case in 'whose name the loan is 'advanced' on an overdraft. This definition of 'borrower' when read in the context of the definition of the benami loan contained in clause (bb) shows that the persons involved in al benami loan, namely, the beneficiary, recipient or the person who only lent his name for purpose of the grant of the loan would all be treated as 'borrower/s'. The definition of loan in the Ordinance makes it further certain that the loans recoverable under the Ordinance would include the benami loans also. That being so, the `borrower' in that context would mean the person in whose name the loan was advanced or granted, the person who actually received the amount, as also the persons who are the beneficiaries thereunder if they are different persons.
18. Thus these definitions instead of supporting the case of the appellant go against him.
19. Learned counsel also relied on para. 6 of the Ordinance to contend that once after due inquiry a matter is decided amongst various parties to whom notices had been sent, it could not be reopened under the said Ordinance. When applying this argument in the present case, learned counsel argued that notices having been sent to the appellant, his brother Haji Abdur Rehman and the authorities of the Co-operative Department, the Deputy Registrar had decided that in case of the loan concerned in this case, Abdur Rehman alone was to be proceeded against if the said recovery is not effectuated from Abdur Rehman during his lifetime or from his property or heirs after his death, the Department cannot now turn sound to recover the amount from the appellant.
20. As observed with regard to the interpretation of the order passed by the Deputy Registrar, we are not satisfied that the appellant wasexonerated and/or that there was any `decision' against Abdur Rehman alone. We agree with the position taken from the respondents' side that it was on the offer of Abdur Rehman who under the definition of the `borrower' could be treated as a 'borrower' and/or in any case a surety, notwithstanding the fact that the appellant would also be treated as a `borrower' regarding the same loan. The proceedings were first conducted against Abdur Rehman for satisfaction of the claim by sale of his property. This did not preclude the authorities functioning even under the Ordinance alone to make recovery from the appellant as a `borrower' of the `loan'.
21. The recovery has not been effectuated in this case from Abdur Rehman, and after his death from his heirs or property. However, the notice, which was challenged before the High Court was protected under M. L. O. 241, 'paragraph 3 read with 6 thereof covered this case. And that being so, in the circumstances of this case, the High Court could not have granted any relief to the appellant.
22. After hearing the learned counsel for the appellant at length, and after affording opportunity to the appellant himself to explain the position with regard to the loan and its attending circumstances, we have not been able to find any force in this appeal, which i~ accordingly dismissed. ' There shall be no order as to costs.