KHALIL-UR-REHMAN RAMDAY, J.---Like hundreds and thousands of others, the Muslims of Hyderabad Daccan also, leaving their homes and hearths in India, migrated to Pakistan on the independence and the partitioning of the sub-continent. Some of them appear to have taken a fancy to the city of Karachi and opted to settle there. For reasons not far to find, they appear to have decided to stick together in this new land and consequently, set up a housing society for themselves which was registered with the Registrar of Cooperative Societies Karachi, as Bahadur Yar Jung Cooperative Housing Society (hereinafter called the said Society), on the 10th of February, 1949.
2. On 6-2-2003, the present respondents No.1, 3 and two others, who are, however, not before us, filed an application under section 54 of the Co-operative Societies Act of 1925 (hereinafter referred to as the "Act of 1925") before the District Officer, Coopereive Societies, Karachi which application was subsequently amended. The prayer, as amended, reads as under:- PRAYER It is, therefore, prayed that this Hon'ble Tribunal may be pleased: (a)to declare that Mirza Hassan Ali Baig was never lawfully appointed by Managing Committee to act as Honorary Secretary under Bye-law No. 60 and his letters dated 16-12-2002 and 9-2-2003 are unlawful and of no legal effect.
(b)to declare that any action done or decision taken in any meeting of the Committee held after 17-11-2002 without inviting all members of the Managing Committee is unlawful and of no legal effect; No future meeting be held without inviting all Committeemen, including Plaintiff No. 1 and all other Managing Committee members.
(c)to declare that all members whose names appear in the Voters' List and who own Shares and plot/house in the Society are lawfully entitled to vote and contest elections and any rejection of Nomination Form of any person whose name appears in the Voters list is illegal and all such persons shall be deemed to be contesting in the ensuring elections.
(d)The elections illegally held on 9-2-2003 be declared as illegal and without any lawful effect.
Fresh Elections be ordered to be fixed immediately after the decision of this application showing all members who filed Nominations to be contestants. To ensure fairness it be ordered that elections be held under the supervision of the Registrar, Cooperative Societies, Sindh, through an appointed Election Officer; (e)That till fresh elections are held the existing Managing Committee may be allowed to continue functioning in accordance with law and registered bye-laws.
(f)Any other relief that may be found fit and proper under the circumstances of the case.
(g)Costs be borne by the Chairman and so-called illegally appointed Honorary Secretary."
3. The proceedings in pursuance of the said application under section 54 of the Act of 1925 were taken up by the Registrar's Nominee. The Bahadur Yar Jang Co-operative Housing Society submitted, through its written statement, that as per bye-law No.7, the applicants before the said forum could not legally become the members of the said society and were thus not entitled to take part in the elections to its Managing Committee. The claim of the said applicants including respondents Nos.1 and 3 before us, was that since they had once been treated as Members of the said society, therefore, they could not be deprived of the membership on account of the said bye- law No. 7 or on account of the amendment made therein on 12-4-2003. The question of the said respondents, having become members of the society, was controverted by the Appellant Society by submitting that since the said society had, on a number of occasions, been superseded, it was during the days of such supersession that the Administrator appointed to manage the affairs of the society, had illegally conferred membership on the said respondents. After hearing the parties, the said application under section 54 of the Act of 1925 was dismissed through an order dated 12- 4-2003.
4. An appeal was then filed before the Registrar of Co-operative Societies under section 56 of the said Act of 1925 which was decided through an order dated 3-12-21703 whereby the above- mentioned award was maintained though the present respondent No.1, namely, Ferozuddin Shamsi, was allowed to continue as a Member of the Managing Committee till expiry of his tenure.
The said Ferozuddin and others thereafter filed a "COMPLAINT" before the Provincial Minister for Cooperation which was disposed of by the said Minister through an order dated 10-9-2005.
5. Feeling dissatisfied even with the above-mentioned appellate order and the order of the Minister dated 10-9-2005, the present respondents Nos.1 to 3 approached the High Court of Sindh through Constitutional Petition No. D-288 of 2006 which was allowed through a judgment announced on 27-2-2008 which judgment was then impugned before this Court by the appellant Society through Civil Petition No.459 of 2008 which petition was allowed on 20-5-2009 granting leave to the said society.
6. Hence this appeal.
7. We have heard the learned counsel for the parties and have also perused the record with their assistance.
8. In spite of the fact that the above-mentioned bye-law No. 7 had been in existence ever since the Registration of the Society in the year, 1949 wherein an amendment had been made in the year 2003 and in spite of the fact that at least one of the present respondents, namely, Ferozuddin had even been a Member of the Managing Committee of the Society while some others had claimed to have remained members thereof and thus could not be presumed to be ignorant of the same, yet no challenge had ever been thrown to the said bye-law No. 7 either through the above-noticed application filed under section 54 of the said Act or the appeal filed under section 56 thereof or even the complaint filed by them before the Minister. Needless to add here that in view of the provisions of section 16 of the Act, no amendment of any bye-law of such a society could ever be registered unless the Registrar was satisfied that the same was not offensive of any law for the time being in force. It may also be added that the provisions of section 16-A of the said Act of 1925 empowered the Government/the Registrar to strike down any bye-law which was found inconsistent with any law for the time being in force. It is however, noticeable that neither the Registrar had ever expressed any reservations about the said bye-law No.7 being inconsistent with any law nor had the Registrar ever found, in terms of the said section 16, that the amendment made in the said bye-law was contrary to any provision of any law for the time being in force. Even Ferozuddin Shamsi respondent and others had never approached the Registrar either under the said section 16 or the said section 16-A informing him that the said bye-law in question or the amendment thereof was offensive of any provision of any law.
9. Despite availability of these remedies under section 16, section 16-A, section 54, section 56 or even under section 64-A of the Act and in spite of the fact that the aggrieved Members had never availed of any or such remedy, the High Court of Sindh entertained the said issue for the first time ever and that also in the exercise of its extraordinary constitutional jurisdiction and struck down the said bye-law No.7 through its above-mentioned impugned judgment. Operative part of the said judgment is as under:- In such a situation, we allow this petition by declaring that the impugned absurd order dated 10-9- 2005 passed by the Minister Cooperation is an invalid order, which is accordingly set aside. It is also declared that section 17-B of the Act has a overriding status over the Cooperative Societies Rules, 1927 as well as byelaws of cooperative societies and a person acquiring the property from a past member also acquired the membership of the society besides the property he has purchased irrespective of any limitation which has been imposed in this respect under the bye-laws of the society as the restrictions under the bye-laws could be valid only till the time when section 17-B of the Act was not introduced but thereafter it is to prevail."
10. Be that as it may, we have re-examined the provisions of section 17-B of the said Act of 1925; of the Rules of 1927 especially Rule 4 thereof and those of the bye-law No. 7 in question.
11. The said provisions of section 17-B read as under:- "17-B. Transfer of interest in a Housing Society.--A member of a cooperative housing society or a society dealing in housing, development shall cease to be member of the society in case all his interests in the immovable property in the society are transferred in favour of any other person by sale, inheritance, gift or otherwise, and the person acquiring such interests shall subject to rules be admitted as a member Provided that where more than one person acquire the interests, one of such persons with actual consent, failing which the person older in age shall be admitted as a member having right to vote while other persons will be the members without such right: '
Provided further that where a minor or a mentally disabled person, acquires the interests, the natural or legal guardian of the minor or, as the case may be, the person bound to maintain the disabled persons shall be admitted as a member and such membership shall stand transferred to the minor as soon as he acquires majority or to the disabled person as soon as his disability is removed." (Emphasis and under-lining has been supplied)
12. It appears that Their Lordships in the High Court gathered an impression that admission of a person as a Member as envisaged by the above reproduced provisions of section 17-B necessarily meant an absolute membership with all rights and privileges attaching thereto. It appears to have escaped the notice of the High Court that the said admission to membership, had been made, by the above-noticed provisions itself, "Subject to Rules" meaning thereby that the said Act of 1925 had itself made the grant of membership in question, subservient to the rules.
13. The word "Member" also stands defined by section 3(c) of the said Act which definition reads as under:-- "Member" includes a person joining in the application for the registration of a society or a person admitted to membership after registration in accordance with the Rules and By-laws applicable to such society." (Emphasis and underlining has been supplied).
14. It would again be noticed that even the said definition does not envisage a "Member" to be an absolute or an un-qualified Member with full rights and privileges but makes the said membership subject not only to the rules but even to the bye-laws of the concerned society. The "Rules" as per section 3(g) of the Act mean the rules made under the Act namely, the Co-operative Societies Rules of 1927.
15. A bare perusal of the provisions of the said section 17-B which make the membership subject to the rules and of the definition of the word "member", would demonstrate that the present is one of those situations where the Act itself has bestowed precedence on the "Rules" framed under the Act and upon the "Bye-laws", in the matter of admitting persons to the membership of a co-operative society. The reason is not far to find because the philosophy culminating in the Co-operative Societies Act of 1925 was to encourage people to voluntarily come together for attainment of common economic and social interests and for achieving better, standards of living on self help basis and on basis of mutual assistance. It had, therefore, been left to the discretion of the persons, so joining hands for the said object, to decide the kind of persons that they would like to join hands with so that the common interests could be better achieved. It was perhaps for the same reason that unlike some other laws, the above-mentioned Rules of 1927 acknowledge restricting and limiting of membership on the basis of tribes, castes and occupations etc. because homogeneity of educational, professional and social background was considered as factors aiding cooperation whereas heterogeneity could impede the same. It would, therefore, be perfectly lawful for lawyers, for instance, to get together to form a co-operative society for any permissible purpose and to refuse membership thereof to any person not belonging to the above said occupation or to grant only restricted or qualified membership to them. Relevant part of the provisions of Rule-4 of the above-mentioned Co-operative Societies Rules of 1927, may be reproduced hereunder for ready reference in support of the above conclusions drawn by us.
4. Matters in respect of which a society shall or may make bye--laws.--(1) The matters in respect of which every society shall make bye-laws are the following:--
(a) The name and address of the society and its branches, the Tribe, Class, Caste or Occupation of its members if the Membership is proposed to be restricted and the area for which it is to be registered;
(b) the object of the society, the purposes to which its funds are applicable, the terms of admission of members, and their rights and liabilities------.." (Emphasis and underlining has been supplied)
16. While we are on the subject we may also reproduce the bye-law No. 7 in question as the same was originally framed and as the same existed in its amended form.
"Original Text of Bye-Laws Amended Text of Bye-Laws All persons who have signed the application for registration are original members. Other members shall be elected by the Committee provided that all members shall belong to Hyderabad Daccen and shall be Muslims migrating to Pakistan. One third adverse votes areAll persons who have signed the application for registration are original members. Other persons shall be elected as members by the Committee provided that they shall be Muslims belonging to Hyderabad Daccen who have migrated to Pakistan or their family members and blood relation. Other persons who do not belong to sufficient to exclude an applicant. Every person shall pay Rs. 10 on applying for admission. In cases where the application is refused the entrance fee shall be returned. A copy of the bye-laws of the Society shall be supplied on payment of Rs. 1 only.Hyderabad Daccen will be Associate members to be approved by the committee having full rights on their property but not voting rights.
One-third adverse votes are sufficient to exclude an applicant. Every person shall pay Rs. 50 on applying for admission. In case where the application is refused the entrance fee shall be returned. A copy of the bye-laws of the Society shall be supplied on payment of Rs. 50 only."
17. Since, as has been noticed above, the provisions of section 17-B and those of section 3(c) of the Act of 1925 had themselves made grant of membership by a Co-operative Society, subject to the Rules framed under the said Act and also to bye-laws framed by the concerned Society which do envisage conferment of restricted membership, therefore, neither the said relevant Rule nor the said bye-law in question could be said to be ultra vires of the Act. The High Court of Sindh, we say with respect, was therefore, in error in holding that the conferment of qualified membership on a person owning immovable property in a Society, was invalid.
18. Consequently, this appeal is allowed and the impugned judgment of the High Court of Sindh at Karachi passed in C.P. No.D-288 of 2006, is set aside. No order as to costs.
19. The above are then the reasons for allowing the appeal through a short order dated 7-4-2010.