' This judgment shall dispose of Writ Petition No, 2095/75 and 559/72 as common questions of law and facts are involved therein. It shall, however, remain on the file of Writ Petition No, 2095/75.
2. Muhammad Afzal petitioner, who brought Writ Petition No, 2095/75, was the Managing Director of the Company by the name of "White Ways Limited", which has already been wound up voluntarily.
The Company was a borrower of the Pakistan Industrial Commercial Bank Ltd. And as the loan remained unpaid, it was proceeded against under the provisions of the West Pakistan Co- operative Societies and Co-operative Banks (Repayment of Loans) Ordinance, 1966. As the notice issued in this behalf under section 5 of the Ordinance, was not complied with, the Deputy Registrar of the Co-operative Societies, who was seized of the matter, by his order dated 22-2-1971 under section 6 of the Ordinance, determined the liability of the Company at Rs, 56,204.47 inclusive of interest upto 31-12-1970, and further directed that a complaint should be lodged before the District Magistrate for penal action, under section 10 of the Ordinance.
2. About 16 months after the promulgation of the West Pakistan, Co-operative Societies and Co- operative Banks (Repayment of Loans) (Punjab Amendment) Ordinance, 1972, the respondent Bank assailed this order through a revision, under section 9-A, on the plea that Muhammad Afzal, petitioner was the real beneficiary of the loan, ostensibly detained, in the name of the Company and was thus liable to pay the same. The Registrar of the Co-operative Societies, acting as a revisional authority, by his order dated 27-1-1975, proceeded ex parte against the petitioner and accepted the revision. He maintained that the petitioner was the Managing Director, operated the accounts of the Company and thus was the real beneficiary of the loan. He was thus adjudged as borrower, in terms of section 2(bbb) of the Ordinance. The validity of this order has been assailed on a number of grounds which need not be reiterated here except the one that he was not served and condemned unheard.
3. Writ Petition No, 559/72 has been filed by Mst. Anwar Begum. She is the wife of Muhammad Afzal petitioner. Her grievance is that she is neither the borrower nor has been adjudged as such nor was associated with the proceedings conducted against the Company or her husband under the Ordinance, but a house constructed over the site bearing Khasra No, 553-min to 558-min and 564- min Krishan Nagar, Lahore, and solely belonging to her, was attached under para. 6 of the M. L.
0. 241 for recovery of the debt due from the Company or for that matter, her husband. Accordingly she has called in question the validity of the attachment orders aforesaid. It may be observed that by order dated 5-5-1972, passed by this Court, it was directed that the auction shall not be confirmed. This order still holds the field.
4. I have heard the learned counsel for the parties in both the cases. In Writ Petition No, 2095/75, none of the respondents has filed any written statement. However, in the other case, only the Bank's written statement is on the record. Before proceeding further an important development which has taken place, may be alluded to. On the petitioner's move some negotiations between him and the Bank management were going on, in pursuance whereof, he has today paid a sum of Rs, 56,204/47 through two Bank drafts to Mr. Naseem Ahmad, the Zonal Chief of respondent Bank. It is claimed by the petitioner that by this payment, the entire liability stands cleared. On the other hand, on behalf of the Bank, it has, however, been asserted that for writing of the interest for, the period after 31-12- 1970, its executive Committee alone is competent And the matter shall have to be placed before the said Committee.
5. On merits I find that though the order dated 27-1-1975, embodies an averment that despite repeated notices the petitioner did not enter appearance yet to refute the petitioner's contention, that he was neither served nor any notice was ever presented to him for service, the Departmental authorities should have placed before the Court, the relevant record that notices were issued to him but he refused the same. The petitioner's denial, supported by an affidavit is sufficient, for, he could not be accepted to la any material on the record to prove the negative. Since there is nothing on the record not even a counter-affidavit, suggestive of the inference that was served or refused to accept the processes, the ex parte order passed against him cannot be upheld.
6. So far as the Bank is concerned, the amount having been paid seemingly, now it does not have a serious grievance against the petitioner.
7. The contravention of the provisions of the Ordinance and the Rule is the foundation of the criminal prosecution under section 10. Since th petitioner's status as a borrower, needs determination, the proceedings commenced against him under sections 10 and 11 of the Ordinance are also set aside.
8. The available record indicates that the property attached under the warrants for attachment dated 25-4-1972, issued by the Industrial Assistant Registrar, Co-operative Societies, Lahore, is owned by Mst. Anwari Begum. There is nothing in rebuttal. The tenor of the written statement filed by the Bank also shows that the property in question belongs to her and the attachment is sought to be justified on the premises that she is a borrower, as envisaged by section 2 (bbb) of the Ordinance. The learned counsel for the respondents are, however, unable to lay hand on any document showing that her status as a borrower was adjudicated upon by any competent authority either under the Ordinance or M. L.
0. 241. Rather on the part of the Bank, it is impliedly conceded that no such determination was ever made. It is also not borne out from the record, that she was ever associate with the proceedings commenced against the Company or her husband much-less to be proceeded against directly.
Para. 6 of M. L.
0. 241 permit recovery of loan by attachment of the property of a borrower. But the attachment must be proceeded by a finding that the petitioner is a borrower.
9. It is correct that under para. 7 of the M. L.
0. 241 any action taken by any person or authority in pursuance of the M. L. O. Cannot be called in question in any Court but there is no dearth of judicial pronouncements, for the proposition, that the action intended to protect must be taken in due and proper exercise of powers. Upon the facts of the case there does not appear to be any basis for commencing action against the petitioner under M. L. O.
241.
' For the foregoing reasons, both the writ petitions are accepted. The impugned orders and so also the attachment of the property of Mst. Anwar Begum petitioner are declared to be without lawful authority. The revision petition of the Bank shall be treated as pending and disposed of afresh in accordance with law. It shall be open to Muhammad Afzal petitioner t. Apprise the Registrar of the compromise reached between him and the Bank. In Writ Petition No, 559/72, the costs shall be borne by the respondents and in the other case, the parties are left to bear their own costs.