ABAID ULLAH KHAN, J.--The relevant events and circumstances leading to the filing of the present intra-Court appeal against the judgment of the learned Judge in Chamber dated the 5th December, 1979, dismissing Writ Petition No.1103 of 1972, wherein the appellants challenged the validity of the proceedings regarding attachment and auction of the building in dispute, standing on plot No.l5, Chah Gul Din, Nawan Shehr, Multan, carried out under Martial Law Order No.241, may be described in the following words. Ghulam Qadir Khan Daha was President of a credit society and a shareholder in and a Director of the Central Cooperative Bank Limited, Multan (respondent 3). In 1947-48 he formed a cooperative society under the name of "The Tahsil Kabirwala Cooperative Multipurpose Society Limited, Makhdoompur Pharowan". The Central Cooperative Bank Limited Multan, respondent 3, purchased some shares and thereby became member of the Society.
Ghulam Oadir Khan Daha was the President, and his son, Mahbood Ahmad Khan was Managing Director of the Society. Ghulam Qadir Khan's brother-in-law, Karam Hussain Khan, and close relative, Bahadur Khan, in additional to Maqbool Ahmad Khan, Qamar Raza Khan, Ghulam Muhammad Khan, Syed Jamshed Hussain, Mehr Wali Dad, Sardat Hussain and Mehr Lai, were members of the Managing Committee of the society. The society suffered heavy losses and respondent 3 bank, to which the society owed a considerable amount of money, as member and shareholders got the dispute referred to arbitration of the Registrar of Cooperative Societies and requested that the members of the Managing Committee of the Society be held personally liable for the losses to the tune of Rs.8,62,071/1/0 sustained by the society due to the gross negligence, imprudence, irregularities and acts contrary to the Cooperative Societies Act, notified rules and by- laws of the society committed by the members. The Registrar appointed Chaudhry Mushtaq Ahmad, Educational Assistant Registrar, Cooperative Societies, Lahore to act as arbitrator. Vide his award of the 11th December, 1958, he concluded that losses of Rs.8,60,071/11/0 were due to the negligence, imprudence and acts contrary to the Cooperative Societies Act, notified rules and bye- laws of the society committed by the Managing Committee. He found that Ghulam Oadir Khan Daha, President, in league with his son, Mahboob Ahmad Khan, Managing Director, his brother-in- law, Karam Hussain Khan, and his close relative Bahadur Khan, were mainly responsible for the ruin of the society and other Directors, Mehr Wali Dad, Ghulam Muhammad Khan and Mehr Lai were instrumental to these affairs. He, therefore, awarded Rs.7,0n,000 in favour of respondent 3 bank againt Ghulam Oadir Khan, Mahboob Ahmad Khan, Karam Hussain Khan and Bahadur Khan in their joint and several liability for payment to the funds of the Tehsil Kabirwala Cooperative Multipurpose Society Limited, Makhdoompur Pharowan, and awarded Rs.1,62,071.14 in favour of respondent 3 bank against all the members of the Managing Committee in their joint and several liability for payment to the funds of the society. He fixed the cost of arbitration at 5 per cent. He directed that the mode of payment would be through respondent 3 bank.
2. Ghulam Qadir Khan Daha, Mahboob Ahmad Khan, Karam Hussain Khan, Bahadur Khan, Ghulam Muhammad Khan, Qamar Raza Khan, Maqbool Ahmad Khan, Mehr Wali Dad and Syed Jamshed Hussain, members of the Managing Committee of the society, preferred appeal against the award given by Chaudhry Mushtaq Ahmad to the Registrar of the Cooperative Societies, West Pakistan.
The Registrar reduced the liability of the members to almost half. By his appellate order of the 30th June, 1959, he decided that Ghulam Qadir Khan Daha, his son, Mahboob Ahmad Khan, his brother- in-law, Karam Hussain Khan, his close relative, Bahadur Khan, and his relative, Ghulam Muhammad Khan, all members of the Managing Committee of the society, were mainly responsible for the ruin of the society and, therefore, he directed that these persons should pay in their joint and several capacity Rs.3,87,720 to the Central Cooperative Bank Limited, Multan, for credit to the funds of the Tchsil Kabirwala Cooperative Multipurpose Society Limited. He further directed that Oamar Raza Khan, Maqbool Ahmad Khan, Mehr Wali Dad, Syed Jamshed Hussain and Mehr Lai, members of the Managing Committee, in their joint and several capacity should pay a sum of Rs.250A to respondent 3 bank for credit to the funds of the society. He upheld the decision of the Educational Assistant Registrar determining cost of arbitration at 5 per cent. However, he observed that the cost would be calculated at Rs.3,87,720 and Rs.2500. The mode of payment was to be through respondent 3 bank. The members of the Managing Committee of the society invoked the revisional jurisdiction of the Government to get the order of the Registrar set at naught but their revision petition was dismissed by the Government.
3. The affected members of the society unsuccessfully challenged the validity of the arbitration proceedings and award in Civil Court and in the extraordinary jurisdiction of this Court. However, we are no longer concerned with that litigation and its outcome.
4. The Deputy Registrar, Cooperative Societies, Multan, respondent 1, attached and sold the building in dispute which belonged to Mahboob Ahmad Khan, and on whose death on the 12th March, 1966, had been inherited by the appellants, who are his children in order to recover the amount which Mahboob Ahmad Khan and others had been held to be jointly and severally liable to pay as directed by the award. The sale of the building took place through public auction on the 19th March, 1972, and the auction was confirmed by the Deputy Registrar, Cooperative Societies, Multan, on the 25th March, 1972. The Central Cooperative Bank Limited, Multan, respondent 3, purchased five shops and upper portions of the shops for an amount of Rs.46,000. The remaining portion of the building was purchased by Riaz Ahmad and Sajjad Ahmad, sons of Ghulam Haider, respondents 4 and 5, for Rs. 3,60,000.
5. The appellants assailed the validity of the attachment and sale of the building in question through writ petition No.1103 of 1972 which was resisted by the respondent and which was dismissed by the learned Judge in Chamber on the 5th December, 1979.
6. In the present appeal against the order of the learned Single Judge, the learned counsel for the appellants concentrated his and the learned counsel for the respondents restricted their arguments on the following two points.
(i) The appellants or their predecessor-in-interest, Mahboob Ahmad Khan, did not fall under the ambit of `borrower' and, therefore, proceedings under Martial Law Order No.241 were not permissible to be taken.
(ii) Chaudhry Mushtaq Ahmad, Deputy Registrar, Cooperative Societies, Multan, respondent 1, who recovered loan by attachment and sale of the property in dispute, was not authorised by the Registrar to do so as provided by para.6(1) of Martial Law Order No.241.
7. It may be mentioned that the appellants did not take up the second point either in the writ petition or in the memorandum of the present appeal but they were permitted to raise it and for that purpose the parties were allowed to file additional documents in respect of their respective cases.
8. In order to judge whether the appellants or their predecessor-in-interest could be regarded as `borrower' as envisaged by Martial Law Order No.241 the learned counsel for the parties adverted to various provisions of M.L.O. No.241 and the West Pakistan Cooperative Societies and Cooperative Banks (Repayment of Loans) Ordinance, 1906 (XIV of 1966), especially to paragraphs 2 and 6 of the order and section 2(f) of theOrdinance which for facility of reference arc set out below:-- Paragraph 2(1). Unless the context otherwise require-- .
(a) `borrower' means a person who has obtained a loan from a Cooperative Bank or a Cooperative 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) `Ordinance' means the West Pakistan Co-operative Societies and Co-- operative Banks (Repayment of Loans) Ordinance, 1966; and
(c) ---person' includes any company, association or body of persons whether incorporated or not.
(2) Other expressions used in this Order but not defined and defined in the Ordinance shall have the meanings respectively assigned to them in the Ordinance.
Paragraph 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 notwithstanding any alienation made by him by way of sale, gift, exchange, will, lease or by any other mode of transfer, or any charge or encumbrance created thereon, or attachment made by any Court or authority or such property and assets in favour of any person after the date of grant of loan.
(2) If the sale proceeds of the property and the assets disposed of under paragraph (1) exceed the amount of loan, the amount in excess shall be paid to the borrower.
(3) The loan recovered under this paragraph shall be paid to the Co--operative Bank or the Co- operative Society, as the case may be to which it is due.
Section 2. Definitions in this Ordinance. Unless there is anything repugnant in the subject or context-
(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 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) any amount which is due from any such person to a co-operative society or a co-operative bank, whether taken as a loan or not;
(ii) any amount due from any such person to a co-operative society or a co--operative bank under a decree passed by a Civil Court or an award given by an arbitrator or a decision of the Registrar, Whether in exercise of his original or appellate jurisdiction; and
(iii) any loan due from any such person to a co-operative society or a co-operative bank which is the subject-matter of any pending suit, arbitration proceedings, appeal or revision, whether under the Act of before any Court. Explanation.-- A loan is `sufficiently secured' if it is not secured by mortgage, pledge, hypothecation or assignment of such property of the borrower or his surety or of both as in the case of loan not exceeding thirty thousand rupees, the, Assistant Registrar, and in the case of a loan exceeding thirty thousand rupees, the Registrar may think adequate.
9. The learned counsel for the appellants argued that the definition of `borrower' contained in para.2(1)(a) of M.L.O. No.241 meaning a person who has obtained a loan from a cooperative bank or a cooperative society read in conjunction with the last words of sub-para (1) of para 6 of M.L.O.
No.241 speaking of the date of grant of loan postulated that the loan should be capable of being taken or obtained and granted in the restricted sense and the word `loan' is not be given wider meaning as contained in section 2(f) of the West Pakistan Cooperative Societies and Cooperative Banks (Repayment of Loans) Ordinance. He contended that unless a person actually took or obtained a loan from a cooperative society or a cooperative bank he could not be made to fall in the category of `borrower' as contemplated by section 2(l)(a) of M.L.O. No.241. He stressed that the element of taking or obtaining a specified amount as loan was indispensable for a person to become a borrower. He gained strength for his arguments from para.6(1) of the Order which speaks of the alienation made or charge or encumbrance created by the borrower after the date of grant of loan. He contended that the concept of grant of loan could only be understood in the form of actually giving of loan by the society or the bank to a person which at the other end of the borrower amounted to his obtaining of the loan. Elaborating his argument he explained that M.L.O.
No.241 provided legal mechanism for recovery of those loans which certain persons had obtained from the cooperative banks or cooperative societies but had defaulted in repaying them and that it was not intended to cover those amounts of money which certain persons were otherwise obliged under the law to pay to the banks or societies. He pointed out that the `borrower' was not defined in the Order as a person who owed some amount or from whom some amount was due to a cooperative bank or a cooperative society but care had been taken to oust such a person from the ambit of `borrower' by restricting the application of the term to a person who had obtained a loan or, to use the language of paragraph 6(1), who had been granted a loan-
10. On the other hand the learned counsel for the respondents canvassed for giving plain meaning to the wording of clause (f) of section 2 of the Ordinance defining the term 'loan'. By referring to para. 2(2) of M.L.O. No.241, which enjoins that expressions used in the Order but not defined therein and defined in the Ordinance would have the meaning assigned to them in the Ordinance, the learned counsel maintained that `loan used in para. 2 as also in para. 6 and eleswhere in M.L.O.
No.241 was to be-interpreted in the light of the definition of 'loan' found in section 2(f) of the Ordinance.
11. The definition of `loan' given in section 2(f) of the Ordinance is fairly wide; the loan includes not only any amount taken as loan from a cooperative bank or a cooperative society by any person but also any amount which is due from a person to a cooperative society a cooperative bank whether taken as a loan or not and any other amount due from a person to a cooperative society or a cooperative bank under a decree passed by a Civil Court or an award given by an arbitrator or a decision of the Registrar whether in exercise of his original or appellate jurisdiction. Incidentally the term `borrower' is not defined in the Ordinance. The absence of use of such words as an amount of loan due from a person to a cooperative society or a co-operative bank, whether taken as a loan or not, and under a decree or award employed in section 2(f) of the Ordinance, in the Order defining a `borrower' and specific mention of the date of grant of loan in para. 6(1) of the Order, tends to support the inference which the learned counsel for the appellants tried to persuade the Court to draw, namely, that a person should be treated as a borrower for the purpose of proceedings against him under the Order only if he had actually obtained the loan from a cooperative bank. Or a cooperative society or the loan had been actually granted to him. The amount which was sought to be recovered from Mahboob Ahmad Khan was the one which he had been ordered to pay by virtue of the award given in the first instance by the Deputy Registrar and then modified by the Registrar of the Cooperative Societies. The amount was admittedly not one that Mahboob Ahmad Khan had obtained or taken as loan from the cooperative bank or cooperative society. Therefore, Mahboob Ahmad Khan could not be said to be a borrower within the purview of para. 2(1)(a) of the Order and consequently his property in dispute could not have been attached or sold under para.6 of the Order. The attachment and sale of the property carried out by respondents 1 and 2 was not lawful.
12. To appreciate the significance of the other point urged by the learned counsel for the appellants touching the competency of respondent 1, Deputy Registrar Cooperative Societies, Multan, to effect attachment and sale of the property it may be advantageous to have in view the provisions of paragraph 6 of M.L.O. No.241. As para. 6 requires it is the Registrar of the Cooperative Societies or an officer authorised by him in this behalf who can recover loan by attachment and sale of the property. The learned counsel for the respondents, referring to the definition of `Registrar' given in section 2(g) of the Ordinance and to the notification No.SOC (1),1/27-66, dated the 16th March, 1968, issued by the Provincial Government in exercise of the powers conferred by section 4 of the Cooperative Societies Act, 1925 (VII of 1925), contended that to all intents and purposes Deputy Registrar of the Cooperative Societies respondent 1, was Registrar of the Co-operative Societies.
The argument of the learned counsel is acceptable with a grain of salt. No doubt under section 2(g) of the Ordinance, the Registrar of Cooperative Societies includes a person upon whom all the powers of the Registrar have been conferred under the Cooperative Societies Act, 1925, the notification banked upon by the learned counsel does not confer all thepowers of the Registrar upon the Deputy Registrars including respondent 1. It need hardly be mentioned that the Provincial Government, under section 4 of the Cooperative Societies Act, may appoint a person or persons to assist the Registrar of Cooperative Societies and can by general or special order confer on such person or persons all or any of the powers of the Registrar under the Act. The notification confers upon the Deputy Registrars of the Cooperative Societies the powers of the Registrar minus his revisional powers under section 64-A of the Act. Since the Deputy Registrar, Cooperative Societies, respondent 1, had not been invested with all the powers of a Registrar of the Cooperative Societies he could not be deemed to be `Registrar' as the term is used m para. 6 of M.L.O. No.241.
13. The learned counsel for the respondents pointed out that respondent 1 had been duly authorised by the Registrar for the purpose of acting under para. 6of M.L.O. No.241 for carrying out the attachment and sale of the property of the borrower. In this connection he drew our attention to the communication bearing the Registrar/B to all the Deputy and Assistant Registrars of Co- operative Societies and Central Cooperative Banks. It reads as under:- No.RCS/B&C/515-600 OFFICE OF THE REGISTRAR, CO-OPERATIVE SOCITIES, PUNJAB.
Lahore, dated the 15th February, 1972.
To
(1) All Deputy Registrars, Cooperative Societies, in the Punjab.
(2) All Assistant Registrars, Cooperative Societies, in the Punjab.
(3) All Central Cooperative Banks, in the Punjab.
SUBJECT: MARTIAL LAW ORDER No.241 Reference this office Circular No.RCS/B&C/- 416-500 dated 10th February, 1972, on the subject noted above.
2. Your attention is drawn to the provisions of M.L.O. No.241. You are directed to proceed as under:-
(1) Initially cases of borrowers who owe amounts of Rs.2 lac or above should be registered with the Police forthwith and prosecuted under para. 4 of M.L.O. If in the meantime any borrower repays the loan, prosecution may be withdrawn.
(2) In cases other than those mentioned in (1) above, recovery proceedings should be taken up immediately by the Deputy Registrar himself or by any person authorised by him as provided in para. 6. This will however, not debar the Deputy Registrar to prosecute any recalcitrant borrower under para.4, if in his opinion it is expedient to do so.
(3) In cases where any borrower is convicted and sentenced to a fine under this Order before its re-constitution, and has not paid the fine or if paid, has deposited it in the Government treasury, the District Magistrate should be moved to recover the amount under para. 5 of this Order.
(4) Since in para. 8 of this Order all civil suits, writ petitions and stay orders pending before any Court including the High Court and Supreme Court have been abated, recovery proceedings in such cases should be taken up immediately as provided in para.6 of this Order.
You are advised please to submit to this office progress report fortnightly without fail.
Its perusal indicates that the Registrar had authorised the Deputy Registrar to effect attachment and sale of the property under para. 6(1) of M.L.O. 241. The auction was conducted by the Assistant Registrar, Cooperative Societies, Multan, respondent 2, as he had been directed to do so by the Deputy Registrar, C Cooperative Societies, Multan, respondent 1. The auction was confirmed by respondent 1 on the 25th March, 1972. Copies of the notings of the office file and of the correspondence touching the sale of the property in dispute and confirmation thereof by respondent 1 have been placed by the respondents on the record. In the circumstances the authority of respondent to recover the loan by attachment and sale of the property in dispute, if it belonged to a `borrower' would have been in order. But unfortunately the owners of the property, as found above, were not `borrowers' and, therefore, respondent 1 had no legal authority whatever to attach and sell the property in dispute because para. 6 of the Order permits attachment and sale of the property of a `borrower' and not of any other person.
14. In view of the above the appeal is accepted with costs throughout, the impugned order of dismissal of the writ petition is set aside and the attachment and sale of the property in dispute are declared to have been effected without lawful authority and are of no legal effect.