This is a suit for declaration, possession, permanent injunction and damages filed by a registered cooperative society against three different registered cooperative housing societies. During the course of hearing of injunction application (C.M.A. No.936/94), Mr. Muhammad Sharif, Advocate for defendant No. l raised a prelimihary objection on the maintainability of this suit for want of notice under section 70 of the Sindh Cooperative Societies Act, 1925. Mr. Sharif has relied upon a recent case of this Court reported as Ziaur Rehman Alvi v. Messrs Allahabad Cooperative Housing Society Limited and 2 others PLD 1995 Kar. 399. In view of this circumstance, it was ordered on 10-9-1995 by this Court that all the parties should make their respective submissions on the next date of hearing on the preliminary issue as to how this suit is maintainable in view of the bar contained in section 70 of the Sindh Cooperative Societies Act, 1925 (hereinafter referred to as the Act, 1925)?
2. Brief facts of the plaint are that by virtue of a compromise entered into Constitutional Petition No.524 of 1994 by the plaintiff (petitioner in C.P.) on one hand and defendants Nos. 2, 3 and 4 (respondents 2, 3 and 4 respectively in C.P.) on the other side, the plaintiff became lawful owner of the portion of Quarry Site bearing Plot No.SNPA-6, Block 3, Karachi Cooperative Housing Societies Union admeasuring 8,000 square yards. In support of this contention, plaintiff has filed copy of sub- lease executed by defendant No.4 in favour of plaintiff on 7-1-1994, copy of which is filed by the plaintiff as Annexure P/4.
The defendant No. l is at present owner of a plot of land bearing No. 6/39 admeasuring 998 square yards in the Delhi Cooperative Housing Society Limited, Karachi: It is the case of the plaintiff that the defendant No.1's plot falls on the North side of the plaintiff's plot and that the defendant No. l has encroached upon an area of 10 feet X 100 feet of the plaintiff's land. Since the application of section 70 of the said Act is presently involved, as such it would be advantageous if paras. 11, 12 and 16(e) of the plaint are reproduced herewith: -- "11. That it is submitted that the plot of land for which the lease has been granted to the plaintiff is for amenity purposes. However, by encroaching on a portion of the plot of land of the plaintiff, the defendants Nos.1 and 4 ate going to convert the said encroached portion of the land for residential purposes. The defendants Nos. l and 4 are liable to .Be restrained from doing the same. The defendant No. l is also liable to pay damages as may be determined by the Honourable Court.
12. That the defendants Nos.2 and 3 have been joined as defendants since there has been a dispute in respect of plot of land with them and the plaintiff and they might be affected as to the boundaries of the plaintiff's plot of land.
16(e) and injunction restraining the defendant No.4 from converting the use of the encroached portion of the plot of land of the plaintiff;"
3. It is an admitted position that no notice as provided under section 70 of the, Act, 1925 was issued by the plaintiff to any of the defendants cooperative societies. No such fact has been disclosed in the memorandum of plaint. I have heard Mr. Abdul Latif A. Shakoor, Advocate for the plaintiff, and Mr. Muhammad Sharif, Mr. Abdul Sattar Memon, Mr. Khaliq Humayun and Mr. Arif Bilal Sherwani, Advocates for the defendants. At the very outset, Mr. Latif A. Shakoor has raised an objection on the framing of preliminary legal issues by this Court and has invited my attention to the contents of the written statements of the defendants where none of the defendants has raised question of want of notice. He has strenuously argued that in absence of any specific pleas or without an application under Order VII, Rule 11, C.P.C., a plaint is not liable to be rejected. Mr. Muhammad Sharif, Advocate for defendant No. l has argued that Civil Courts are competent to suo motu reject a plaint, if it appears to be barred by any provision of law. In this connection, he has relied upon the cases reported as Pakistan and another v. Devachand Muljimal and others PLD 1968 Kar. 107, Ali Muhammad and 6 others v. Secretary, Board of Revenue, Sindh, Hyderabad and 9 others PLD 1977 Kar. 747 and Lt.-Col. M. Ahsanul Haq v. Sh. Manzoorul Haq and 2 others PLD 1979 Note 120 at p.90. In the case of Ali Muhammad (supra), a learned Single Judge of this Court followed the case-law reported as Pakistan and another v. Devachand Muljimal and others (supra) and held that it is the inherent and mandatory duty of the Court to examine the plaint and to see whether it should be returned to the plaintiff as provided under Rule 10 or be rejected under Rule 11 of Order VII, C.P.C., which exercise is to be adopted even in absence of any application. There is another reported case in which identical procedure as of this present case was adopted by a learned Single Judge, Mr. Zafar Hussain Mirza, J. (as his lordship then was). In view of the case-law cited by Mr. Sharif, it is suffice to observe that a Civil Court is fully competent to consider legal objections on the maintainability of a suit raised by any party even without moving a proper application, provided an opportunity is extended to such party who may be effected in case of rejection of plaint. It will also be pertinent to observe that a Civil Court can suo motu reject a plaint under Order VII, Rule 11, C.P.C.
After extending opportunity of hearing to the plaintiff (For any further reference, see the cases of Trustees of the Port of Karachi v. Gujranwala Steel Industries and another 1990 CLC 197 and Pakistan State Oil Company Ltd. v. The Karachi Electric Supply Corporation Ltd. And 24 others PLD 1991 Kar.
365. In the case of Trustees of the Port of Karachi, a learned Single Judge of this Court, Mr. Wajihuddin Ahmed, J. Allowed the defendants to raise objection as to the maintainability of suit despite the fact that an application under Order VII, Rule 11, C.P.C. Was struck off by the order of the Registrar (O.S.). The relevant observation of my learned brother is reproduced as hereunder: -- ...Even otherwise, question of rejection of the plaint under Order VII, Rule 11, C.P.C. Has an element of priority, has to be disposed of at the earliest and can always be considered even Suo Motu, without a formal application, and, thus while in Suit No.127/86 such an application lies struck off, on account of non-payment of costs, the matter under Order 7, Rule 11, C.P.C. Can still be examined and, if a case for rejection of the plaint is made out under that provision, adequate orders can be passed.
No limitations as to stage or time are relevant in that context ...."
4. It is now well-settled that a suit in respect of any act touching the business of the cooperative society is not maintainable against a registered cooperative society, in case provisions of section 70 of the Act, 1925 are not complied with by the plaintiff. This view is being consistently followed by this Court as well as other superior Courts of this country. In the case of Muhammad Ali Memorial Cooperative Housing Society Ltd., Karachi v. Syed Sibtey Hasan Kazmi PLD 1975 Kar. 428, former Chief Justice of this Court Mr. Tufail Ali A. Rehman, C.J. (as he then was) dismissed the appeal and restored the order of the trial Court rejecting the plaint on the grounds that the suit was barred for want of notice under section 70 of the Act, 1925. This view was followed by this Court in the cases of Muzaffar Hussain and another v. Yusuf and 4 others PLD 1976 Kar. 1107; Farida v. Prince Apartments Cooperative Housing Society and 2 others 1984 CLC 2914 and recently in the cases of Ziaur Rehman Alvi (supra) and in the earlier case of Faqir Muhammad Dadu Mahomed v. Mercantile Cooperative Bank Limited AIR 1940 Sindh 143. In a recent unreported case, another learned Single Judge of this Court, Mr. Rana Bhagwan Das, J. In the case of Darul Aman Cooperative Housing Society Limited v.
The Secretary, Government of Pakistan, Ministry of Works and Rehabilitation Division and others (Suit No.3/77) dismissed the suit on the grounds, inter alias that the provisions of section 70 are mandatory and failure to comply with the requirements of this section would render the suit not maintainable. The view as held in the case of Muhammad Ali Memorial Cooperative Housing Society and in the case of Sajjad Hussain Khan and others v. Muhammad Hanif Siddiqui and others 1989 MLD 4250 was followed.
5. In the case of Fakir Mahomed Dadu Mahomed v. Mercantile Cooperative Bank Limited, Karachi AIR 1940 Sindh 143 a learned Single Judge of erstwhile Chief Court of Sindh dismissed the plaintiff's suit with cost on the ground that the process of granting loans to its members is the business of the society and the act which the society is alleged to be` about to do is an act "touching the business of the society". In such circumstances, it was held that it was essential for the plaintiff before filing his suit that he should have given the defendant-Bank the notice as specified in section 70 of the Act, 1925. In the case-- of Syed Akhtar Ali v. Hoor Bai and others 1987 M LD 2999, it was held by Mr. Tanzil-ur-Rehman, J. (as he then was) after following the view laid down in the cases of Muhammad Ali Memorial Cooperative Housing Society, Muzaffar Hussain and Farida that the said suit filed against the defendant No.7, namely, Pakistan Post Offices Employees' Cooperative Housing Society Limited, was not maintainable unless a prior notice of intimation of the institution of the suit was given to the Registrar, Cooperative Societies as required under section 70 of the Act, 1925.
6. It is vehemently contended by Mr. Latif A. Shakoor that the defendant No. l is not a member of the plaintiff society who has encroached upon the plaintiff's lands as such no notice as provided under section 70 of the Act, 1925 is required. He has relied upon Annexure P/3 to the plaint which is a final order in Constitutional Petition No.524 of 1991. By stating so, in my opinion, he means that the subject-matter of this suit does not fall within the term "any act touching the business of the society". According to Mr. Sharif, the factual background of the plaintiff's case as alleged in. He complaint, is not relevant for the determination of this preliminary legal issue, since the defendant No. l was not a party in the Constitutional petition and secondly the land acquired by the plaintiff through compromise in the Constitutional petition, is not the conclusive proof that the additional piece of suit land allotted to the defendant No. 1 by the Delhi Mercantile I-lousing Society which is not a party in the present suit forms part of the plaintiff's property. Be that as it may; I am of the tentative view that for the facts alleged in parts. 11 and 12 of the plaint as well as prayer made by the plaintiff vide para. 16(e) bring the suit of the plaintiff within the term "any act" as well as within the term "touching the business of the society". In this connection, I would like to refer to the case of M.S. Madhava Rao and others v. D.V.K. Surya Rao and others AIR 1954. Mad.
103. In this case a Full Bench of Madras High Court interpreted the words 'touching the business of a registered society" and held that these words must be given their full import. It was further held that the disputes were not to be restricted to matters arising from and out of business of the society but were also extended to matters which are in some way concerned or related to the business of the society.
7. The word "business" as used in section 2(d) of the Offences in Respect of Banks (Special Courts)
Ordinance, 1984 also came up for interpretation in the case of A. Habib Ahmed v. M.K.G. Scott Christian and 5 others PLD 1992 SC 353. Through this Ordinance IX of 1984, it is provided that the Federal Government shall 'constitute Special Courts for the trials of scheduled offences as specified in First Schedule to the said Ordinance and which are alleged to have been committed "in respect or in connection with the business of a bank". Besides the words "business of a bank", two other words "in respect of" and "in connection with" were also considered and it was held as follows: -- "The definition of scheduled offence as contained in section 2(d) of the. Ordinance does include a rider to be to the offences which are mentioned in the schedule and which undoubtedly are alleged in this case. The rider is that those offences should have been alleged to have been committed ' in respect of or in connection with the business of bank'. It needs to be emphasized that the expression 'business of a bank' used in the definition would have to be giver; extended meaning on account of the use of two such further open ended expressions which connote very wide meaning for words 'business' and the "Bank". These are ' in respect of or ' in connection with'.
The scrutiny of the meanings of these words and expressions in the classical sources together with the modern usages and scope of Banking business, leave absolutely no doubt that there will be left out of their ambit only extremely rare cases . . . . . . "
8. There appears no reason why section 70 'of the Cooperative Societies Act, 1925 should not be extended in wider sense as it includes words "any act" with reference to the business of a society.
As held by the Hon'ble Supreme Court in the above-quoted case, I am of the view that the scope of a business of a registered cooperative society will include all conceivable situations linked with such business and only extremely rare cases are to be excluded out of the ambit of the words "any act touching the business of the society".
9. Mr. Latif A. Shakoor, learned counsel for the plaintiff has relied upon the cases reported as Azizud Din Ahmed v. Aziz Ahmad and others PLD 1959 Kar. 497, Muhammad Azim v. Pakistan Employees'
Cooperative Housing Society Ltd., Karachi and others PLD 1985 Kar. 481 and Muhammad Siddique and others v. Shahab Din and others 1991 CLC Note 247 at p.192. The law laid down in these reported cases is of no help to Mr. Latif as the proposition of law under consideration is quite different to other laws as settled in the reported cases. Facts of these reported cases are also different from the facts of the instant case. In the case of Azizuddin Ahmed, a writ petition was filed against the order of the Chief Commissioner of Karachi who set aside the order of the Registrar directing the parties to settle their dispute according to the provisions of section 54 of the Act, 1925. In this reported case, neither the application of section 70 of the Act nor its interpretation was considered.
Similarly in the case of Muhammad Azim, one of the question before this Court was whether the dispute in that suit is not referable to the Registrar under section 54 of the Act. It was held that section 70-A of the Act bars the jurisdiction of a Civil Court only in such cases which have to be decided by the statutory functionaries under the Act. In the last case cited by Mr. Latif, it is simply headnotes and in absence of factual background of the case, the same cannot be relied upon.
10. The next contention of Mr. Latif A. Shakoor is that the object and purpose of section 70 is not to create bar on the filing of suit but the purpose behind compliance of section 70 is that the controversy should be resolved before the forum of Registrar and the party should not resort to the Civil Courts. According to the learned counsel for the plaintiff, it was with this view that section 70 requires issuance of notice to the Registrar. I am afraid such proposition of law cannot be sustained and if allowed to be sustained, it will frustrate the entire purpose of enacting section 70.
In my opinion, section 70 covers those cases which cannot be decided through arbitration proceedings as provided under section 54 of the Act, 1925 or under section 54-A. If section 70 and section 70-A are read in reference to each other it will clarify the situation as section 70-A not only bars the jurisdiction of the Court but of other authority as well, to the extent where any dispute can be resolved before the Provincial Government as provided under section 64-A of the Act or by the Registrar or his nominee, any arbitrator or liquidator as provided under sections 54 and 54-A or under Chapters 7 and 8 of the Act. Section 70 entitles any person including a society to maintain a cause in a Civil Court only after service of notice. Therefore, to say that section 70 is meant for initiating arbitration is not only absurd but amounts to creating a condition precedent to section 54 of the Act 1925 which will destroy the entire spirit .Of the aid section.
11. The upshot of the above discussion is that the subject-matter of this suit, as disclosed in the plaint, amounts to an act touching the business of the defendant No.4 which is a cooperative society as well as business of the Delhi Mercantile Cooperative Society which is not before this Court and that in absence of notice as provided under section 70 of the Sindh Cooperative Societies Act, 1925, this suit is not maintainable and, therefore, the plaint is hereby rejected.
However, this order will not preclude the plaintiff from filing a fresh suit'as envisaged in Order VII, Rule 13 of the C.P.C., providbd it i. Out of the same cause of action and within time.