The National Industrial Co-operative Bank Limited which is respon--dent No. 2 in this Regular Second Appeal, advanced some loan to one Sh. Muhammad Asnhar. The appellant, AI-Riaz (Shalimar Town) Limited, which is a registered firm, stood surety for repayment of the loan. Dispute, however, arose in regard to the repayment of the loan. That dispute was, therefore, referred to the arbitration of respondent No. 1, Mr. Muhammad Hassan Lodhi. This reference was challenged by the appellant by means of a suit. The appellant was non-suited by a Civil Judge by means of an order rejecting his plaint under Order VII, rule II of the Code of Civil Procedure. It was held by the learned Civil Judge that the suit was barred by law inasmuch as no notice, as contemplated by section 70 of the Co-operative Societies Act, 1925. Hereinafter referred to as the said Act, was given before the institution of the suit. Order of the trial Court was assailed by the appellant by taking an appeal to an Additional District Judge but without success. Hence this second appeal.
2. Section 70 of the said Act, which is required to be considered in the present case, reads as follows :- "70. No suit shall be instituted against a society or any of its officers in respect of any act touching the business of the society until the expiration of two months next after notice in writing has been delivered to the Registrar, or left at his office, stating the cause of action, the name, description and place of residence of the plaintiff and the relief which he claims and the plaint shall contain statement that such notice has been so delivered or left."
3. Conceding that respondent No. 2 was a society registered under the said Act, it was urged by learned counsel for the appellant that the dispute involved in this case did not relate to the business of the society and, therefore, the provisions of section 70 of the. Said Act were not attracted. In this connection, he invited my attention to paragraph 6 of the plaint in which it was alleged that the dispute did not relate to the business of the society "as it is not the business of the society to give loan to a non-member". According to the appellant; the aforementioned Sh.
Muhammad Asghar, to whom the loan in question was advanced; was not a member of any society. It was also maintained by learned counsel for the appellant that for rejecting a plaint under Order VII, rule 11 of the Code of Civil Procedure, nothing but the contents of the plaint could be looked -into.
4. In reply, it was submitted by learned counsel for the respondent that according to sub-section
(1) of section 34 of the said Act read with sub-paragraphs (e) and (f) of paragraph (3) of clause
(b) of bye-law 37 of the bye-laws of the National Industrial Co-operative Bank (respondent No. 2) the said Bank could, as a society, advance loan to non-members also and, therefore, the appellant was not correct in saying that the dispute involved in this case did not relate to the business of the Society. The above bye-laws were framed under rule 4 of the rules made under clause (c) of sub section (2) of section 71 the said Act. It was also maintained by learned counsel for the respondent that judicial notice could be taken of the aforesaid provisions of the said Act and the bye-laws for rejecting the plaint.
5. Subsection (1) of section 34 of the said Act is to the following effect :-- "34.-(1) Except with the general by special sanction of the Registrar and subject to such terms and conditions as he may impose a society shall not make a loan to any person other than a member."
Sub-paragraphs (e) and (f) paragraph (3) of clause (b) of bye-law 37 empower the Security- cum-General Manager of the Bank (respondent No. 2) to grant loans- "(e) To persons other than members when such loans are required only for the purpose of the Liquidation of a Co-operative Society affiliated to the bank or for purpose of execution of civil decrees given in terms of an arbitrator's award when judgment-debtor is either a member of the bank or member of a Co- operative Society affiliated to it provided the same is - previously sanctioned by the Registrar.
(f) To non-members, individuals, industrial or commercial concerns of very sound position against pledge of marketable commodities, raw materials, manufactured gods except:, perishable ones, gold ornaments or stock exchange securities."
These provisions of the said Act and- the bye-laws, whereunder loans can be advanced to non- members also, therefore, belied the appellant's assertion that the dispute referred to the arbitration did not relate to the business of the society because it was. Not the business of the society to advance loans to non-members. It was not the plea of the appellant that the condition on which loans could, be advanced to non-members were not. Satisfied in his case.
As for the argument of learned counsel for the appellant that for the purpose of deciding the question whether the plaint was liable to be rejected under Order VII, rule 11 of the Code of Civil Procedure, nothing but the allegations made in ,the plaint are to be considered, his argument holds good so far as the factual aspect of a case is concerned but there is no bar to the taking into account of legal provisions having bearing on that question. If any averment made in the plaint is belied by law on the subject, the Court is riot precluded from taking into. Consideration that law.
What has been held in the present case. Is that the - appellant's suit was barred by law and therefore, its plaint was liable to be rejected under clause (d) of rule 11 of Order VII of the Code of Civil Procedure. The law as envisaged by clause (d) -bid, to my mind, is not only the principal legislation such as Acts, Ordinances, etc., but also the subordinate -legislation, such as rules, bye- laws, etc. In the case before me the said Act is the principal legislation and the bye-laws framed thereunder are subor--dinate legislation. In other words section 70 of the said Act read with section 34 thereof and sub-paragraphs (e) and (f) of paragraph (3) of clause (b) of bye-law 37 constitute law within the meaning of clause (d) of rule 11 of Order VII of the Code of Civil Procedure. According to the said law, business of the society includes advancing of loans to non--members, and if any suit is brought in respect of such loan it would not be competent if it is instituted without serving notice under section 70. Admittedly, no such notice was served by the appellant before filing the suit. The plaint in its suit was, therefore, rightly rejected under clause (d) of rule I 1 of Order VII of the Code of Civil Procedure.
7. There is no merit in this appeal. It is dismissed with costs.