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1998 CLC 1285

FISHERMEN'S COOPERATIVE SOCIETY LIMITED and 7 otherss vs THE REGISTRAR,

Citation1998 CLC 1285
CourtSindh High Court
Judge(s)Hamid Ali Mirza, Kamal Mansur Alam
ResultPetition accepted

1. ' HAMID ALI MIRZA, J.---This is a Constitutional Petition under Article 199 of the Constitution of Islamic Republic of Pakistan 1973 wherein petitioners have prayed for declaration that the Order No,RCS/II/1997, dated 14-6-1997 passed by respondent No,1 is without lawful authority, null and void, of no legal effect or consequence and all acts and actions taken in pursuance thereof including appointment of respondent No,4 are void and further respondents be restrained from interfering in the affairs and management of the Society with its bank accounts, moneys, properties, assets and revenues and otherwise.

2. ' Brief facts of the case as stated are that there exists a long outstanding dispute between the Petitioner No,1 (hereinafter called the Society) and the Government of Sindh and the Karachi Fish Harbour Authority in relation to the properties, business and income of Society and the said dispute compelled the Society to seek redress through a Constitutional Petition No,1183 of 1996 pending adjudication before this Court and in the said petition interim injunctive order restraining the respondents was passed on 5-9-1996 and during the pendency of above said petition, Chairman of the Society made determined 'efforts to resolve the said dispute which was raised by the respondents Nos.2 and 3 in respect of demand for a major share in the revenues of the Society but it was not agreed by the Society to hand over major part of its revenues for Karachi Fisheries Harbour Authority to meet its expenditure on salaries and up keep at the cost of the welfare and socioeconomic up lift of the poor and downtrodden fishermen and their families, however, notwithstanding the injunctive orders of this Court, respondent No,2 issued two Gazette Notifications on 11-11-1996 and 21-1-1997 whereby the Society was directed to enter into a lease agreement with Karachi Fisheries Harbour Authority in respect of one of its properties and was also ordered to pay 50% of the commission collected by it through the mole holders to Karachi Fisheries Harbour Authority and further number of Directors on the Board of Karachi Fisheries Harbour Authority representing the Society was reduced/limited to five, thereby reducing the majority of the Society on the Board. The petitioners did not comply with the abovesaid notification in view of injunctive orders which led to further meetings and negotiations between Chairman of the Society and the Managing Director of Karachi Fisheries Harbour Authority in April and May, 1997 but the Chairman of the Society refused to budge from the stand taken by the Society earlier and did not succumb to pressures and demands of the Karachi Fisheries Harbour Authority or Government of Sindh which annoyed and caused frustration to respondents who without awaiting adjudication of the above petition mala fide in order to deprive the Society of its properties respondent No,2 addressed a Letter No,KFHA/5072 of 1997, dated 10-5-1997 to respondent No,3(i) the Secretary, Live Stock and Fisheries Department suggesting to take disciplinary action against the Chairman of the Society under the Cooperative Societies Act for not implementing the orders of the Government of Sindh (the respondent No,3) vide abovesaid notifications or the Society be dissolved through the respondent No,3(ii) the Secretary, Food and Cooperation Department and an Administrator be appointed to implement the orders of the Government thereafter the Deputy Director (H.Q.) on behalf of Secretary Live Stock and Fisheries Department vide his Letter No,SO(Fish) 5(8)/89, dated 12-6-1997 wrote to the Secretary Food and Cooperation Department for dissolution of Board of Directors of the Society and appointment of an Administrator for which approval was obtained from competent Authority consequently the Registrar Cooperative Societies by his Order No,RCS/I1/1997, dated 14-6-1997 illegally, unlawfully and in contumacious contempt of the orders of this Court, superseded the existing Committee (Board of Directors) of the Society and appointed respondent No,4 Mr. Humayun Khan, sitting member of the Provincial Assembly, which order was purported to have been passed under rule 48 of Cooperative Societies Rules, 1927 without giving and serving show-cause notice ignoring the mandatory requirement of rules and principles of natural justice consequently the respondent No,4 supported by respondent No,3 forcibly entered the office of the Society and took over as Administrator on 14-6-1997.

3. ' We have heard learned counsel for the parties and perused the impugned orders and Annexures.

4. ' Contention of the learned counsel for petitioners is that the impugned order, dated 14-6-1997 purportedly passed by respondent No,1 superseding the Society's Committee (Board of Directors) of duly elected body without service of show-cause and due opportunity of hearing is violative of principles of natural justice and is mala fide as well and the respondent No,4 in pursuance of the impugned order illegally and forcibly entered the office of Society and took over as Administrator on 14-6-1997 at 11-48 a.m. As per Annexure 'G' in spite of injunctive order of status quo, dated 5-9- 1996 passed in Constitutional Petition No,1183 of 1996. Learned counsel has also referred to a notification, dated 11th November, 1996 of the respondent No,3 Annexure 'C/1' whereby Petitioner No,1 was asked to enter into a lease agreement with respondent No,2 in respect of fish marketing auction halls at Karachi Fisheries Harbour Authority initially for six months' period renewable for further period of six months and further Petitioner No,1 was to pay 3.25% (i,e, 50% of the commission collected by them through the mole holders) to respondent No,2 and referred to a letter, dated 10- 5-1997 (Annexure 'D') from respondent No,2 to respondent No,3(i) to take disciplinary action against the petitioner No,1 under the Cooperative Societies' Act, 1925 for not implementing the orders of the respondent No,3(i) to dissolve the petitioner's Society and (ii) to appoint administrator to implement the orders of the respondent No,3. Reference has been made to Annexure 'E', letter, dated 12-6-1997 addressed to respondent No,3(ii) by Deputy Director (H.Q.) wherein it has been stated that Planning and Development Department has got approval of competent authority for dissolution of Board of Directors of Petitioner's Society and for appointment of an Administrator to settle the pending dispute between Fisherman's Cooperative Societies and Karachi Fisheries Harbour Authority on permanent basis. Learned counsel has argued that in fact the order for the supersession of the Society's Committee (Board of Directors) was passed by the competent Authority as mentioned in Annexure 'E' and not by the- respondent No,1 but is stated to have passed by him as would appear from Annexure 'F-1' which was already passed on 12-6-1997 and not on 14-6-1997 and before passing of the impugned order, a show-cause notice under Rule 48(6) of the Cooperative Societies' Rules 1927, dated 12-6-1997 was said to have been issued to the Chairman of petitioner No,1 as an eye wash which show-cause notice was not received, even if it be assumed to have been received, the same would not amount to sufficient opportunity and further the action as per impugned order has been taken against the Board of Directors while the show-cause notice, dated 12-6-1997 was addressed to the Chairman, Petitioner No,

1. It has also been argued that the impugned order has been passed in the best interest of the Government but against the interest of the Society, therefore, also same was mala fide. It has also been argued that under Bye-laws 38 of Fishermen's Cooperative Society (Board of Directors) shall hold the office for three years and in the instant case elections were held on 11-11-1994 and period of three year expired on 10-11-1997 consequently, election could not be delayed for more than six months after expiry of term of three years. Reference has also been made to proviso of section 6 of Karachi Fisheries Harbour Authority Ordinance, 1984 whereunder the number of members including Chairman appointed by the Government shall always be less than the number of nominees of Society and under clause (iii) of section 6(1) nominees of Society would not be exceeding six in numbers while under section 18 of said Ordinance, the Society shall annually pay contribution to Authority such amount as may be mutually agreed between Society and Authority whereas Provincial Government as per notification stated above unilaterally increased the contribution to be paid by the Society to the respondent No,2 which would be against the abovesaid provisions of Rules. He has also referred to provisions of sections 43, 44 (c)(d)(g) of the Cooperative Societies Act, 1925 contending that there has been non-compliance of the said provisions of law as well.

5. ' Reliance has been placed upon (i) Subedar (Retd.) Malik Ghulam Hussain v. Jamil Ahmad Khan and 7 others (1993 MLD 521 (D.B.) wherein D.B. Of this Court held that action taken against the petitioner was violative of principle of natural justice embodied in the maxim "audi alteram partem" as the action was taken without issuance of show-cause notice; (ii) Pir Shah Mardan Shah and 3 others v. Chief Land Commissioner, Sindh and 2 others (PLD 1974 Karachi 375) wherein learned D.B.

6. Of this Court observed:--- "It is well-settled that the principles of natural justice are to be read as a part and parcel of every statute, and the order was held to be void in law by virtue of violation of principle of natural justice and void order is no order in law, its weight is zero in law, it does not exit, and it need not be set aside because law does not recognize its existence."

(iii) State v. Ziaur Rehman and others (PLD 1973 Supreme Court 49) wherein their Lordships of Supreme Court observed that an act done mala fide is an act without jurisdiction; and (iv) Muzaffar Ali Shah and others v. Registrar, Cooperative Societies, Karachi and another (PLD 1968 Karachi 422) wherein the learned D.B. Of this Court referred to rule 48 of Cooperative Societies Rules, 1927 whereunder show-cause notice was given before superseding the Managing Committee and it was held that the person affected should know nature of allegations and should have an adequate opportunity to meet the allegations.

7. ' Learned counsel for respondents has argued that sub-rule (6) of Rule 48 states that opportunity of show-cause could be given only when the Society is to be superseded and not committee of the Society (Board of Directors), therefore, show-cause notice before passing the order of supersession of the committee of Society is not envisaged under sub-rule (6) of Rule 48 of the Cooperative Societies' Rules 1927. He further contended that the Committee would not mean Society but it would be part of the Society as defined under section 3(b) and (c) of the Cooperative Societies'

8. Act, 1925. He argued that the action was taken because the matter was urgent in view of the corruption and financial crisis in the Society; therefore, show-cause notice was not necessary. He has argued that the Special General Meeting held on 26-7-1997 could not be said to have been held because the Chairman of the said Committee and Board of Directors of the said Committee ceased to become as such on the said date in view of impugned order, consequently the present petition could not have been filed by the petitioner No,1 in the capacity of as Chairman of the Fishermen's Cooperative Society. He has placed reliance upon Federation of Pakistan v. Haji Muhammad Saifullah Khan (PLD 1989 Supreme Court 166) wherein at page 194 their Lordships of Supreme Court have observed that "let justice be done though heavens should fall".

9. ' The main contention of the learned counsel for the petitioners is that impugned order, dated 14-6- 1997 purported to be passed by respondent No,1 superseding the Society's Committee (Board of Directors) was without giving/serving show-cause notice upon petitioners' Society was violative of natural justice, hence void and of no effect and force . Admittedly Annexure 'F-2' purported show- cause notice under Rule 48(6) is, dated 12th June 1997, Annexure ' F-1' the impugned order is, dated 14-6-1997. Annexure '0' is the taking over charge report of respondent No :T.,mayun Khan, dated 14- 6-1997 at 11-48 a.m. The petitioners have denied the receipt of show-cause notice, dated 12-6-1997 but Annexure ' F-1' impugned order, dated 14-6-1997 para. 2 stated that show-cause notice, dated 12-6-1997 was served through Mr. Nizamuddin Secretary Board of F.C.S. Through representative of the office in the morning of 12th June, 1997, for replying latest by 13th June, 1997 before close of office. Admittedly 13th June, 1997 was Friday and the closing hours as observed in the Secretariat and the Government Offices were 12-30 p.m. On the relevant date while taking over the office by respondent No,4 was made at 11-48 a.m. On 14-6-1997. As per show-cause notice, dated 12-6-1997 Petitioner No,1 was called upon to explain within two days as to why action against the Board of Directors (Committee) should not be taken under Rule 48 of Cooperative Societies Rules, 1927. Two days' period was to expire on 14-6-1997 and as stated above, charge of office by respondent No,4 was taken on 14-6-1997 at 11-48 a.m. It would hereinafter be seen that impugned order was passed even before the expiry of two days' period, without even waiting for the stated period for the reply of the petitioner's Society. It will be seen that the abovesaid letter, dated 12-6-1997 was written to the Secretary Food and Agriculture so also on the same date, show-cause notice was also issued under Rule 48(6) wherein implied reference to the letter of Secretary Live Stock and Fisheries Department has also been made which would show that the letter, dated 12-6-1997 was sent to Registrar Cooperative Society, Sindh, Hyderabad, who on receipt of the letter from the Deputy Director (H.Q.) Live Stock and Fisheries Department, issued show-cause notice on the same day i,e,, the 12th June, 1997 which on the face of it appeared to be very difficult to have been received though not impossible in these days, and also it would be difficult to serve the show-cause notice upon the petitioners on the same date in the morning as stated in the impugned order, dated 14- 6-1997. No acknowledgement about the receipt of the show-cause notice has been produced.

10. However, even if it be assumed that it was delivered on the same day but it could not be served or delivered in the morning of same day i,e,, 12-6-1997 because show-cause notice was issued after the receipt of letter, dated 12-6-1997 of the Deputy Director (H.Q.) Live Stock and Fisheries Department, therefore, two days' period as per show-cause notice would not have been over/expired by 11-48 a.m. On 14-6-1997, so as to pass the impugned order on 14-6-1997 before 11- 48 a.m. When the respondent No,4 took over the office of Petitioner No,1, therefore, it could not be said to be a sufficient opportunity of notice to the petitioners, so also could not be said that the petitioners would have been served with notice or it was delivered to the Petitioner No,1 in the morning of 12-6-1997.

11. Rule 48 of Cooperative Societies' Rules, 1927 requires that a show-cause notice be issued to the Society so that the affected person should know the nature of allegations against him and should have adequate opportunity to meet the allegations. Notice of show-cause under Rule 48(6) of Cooperative Societies Rules, 1927 would be mandatory even for supersession of the Managing Committee (Board of Directors) as it would also be dealing with the working and conduct of the affairs of the Society hence it could not be pleaded that because the Society was not superseded but Committee was superseded hence show-cause notice was not necessary considering also that there could not be said to be any urgency in the matter when the dispute between the parties was going on since November, 1996 because of the notification, dated 11th November, 1996 issued by Government of Sindh, Fisheries and Live Stock Department. In the case of Muzaffar Ali Shah and others v. Registrar Cooperative Societies, Karachi (PLD 1968 Karachi 422) Managing Committee was superseded and in the said case Rule 48 of the Cooperative Societies Rules, 1927 requiring show-cause notice was also held to be necessary though in the cited case notice period of 15 days was given to the Managing Committee. In the instant case two days' period notice was stated in the show-cause notice but before the expiry of 48 hours, the impugned order was passed by the respondent No,1 which could not be said to be a notice and adequate opportunity of hearing having been afforded to the petitioners. Reference may also be made to Pakistan Express Cooperative Bank Limited v. Registrar Cooperative Societies, Lahore Region, Lahore (NLR 1986 SCJ 63) wherein Board of Directors of the Bank were superseded and show-cause notice for 20 days' period was given which was held to be sufficient notice and in the cited case, period of 20 days was held to be ample opportunity for the Committee to explain the matter which they failed. (ii)

12. Province of Sindh v. Public at Large PLD 1988 SC 138. The facts of cited case are, this Court in the petition filed by respondent suggested amendment in section 6(2) of Sindh Cooperative Housing Society Ordinance for affording an opportunity of hearing which was not there is the original Ordinance, as absence of giving opportunity was against the Quranic Commands as supplemented and interpreted by Sunnah of Holy Prophet (p.b.u.h.). The Province of Sindh went in appeal before Shari& Appellate Court and challenged the said decision and their Lordships of Shariat Appellate Court observed at page 95:--- "We appreciated the background in which the impugned provision has been enacted but would observe that this Court has now made it quite clear that any provision of law whereunder some one can be harmed or condemned without affording such person an opportunity of defence against the said action, is against the Quranic Commands as supplemented and interpreted by the Sunnah of the Holy Prophet (p.b.u.h.). This Court has held that when a public authority exercises a power to resolve a controversy involving rights and liabilities of some one, such a decision must not be given without affording the person affected an opportunity of hearing (Pakistan v. Public at Large PLD 1987 SC 304 at 330/331). Hence, we cannot agree with the learned counsel for the appellant that the absence of a provision requiring issuance of a notice before taking action, in the impugned subsection (2) of section 6, is not repugnant to the Injunctions of Islam."

13. ' Ultimately in the suggested proposal of the Hon'ble Supreme Court, a clause for affording opportunity of hearing was provided before superseding the Committee but in case of urgency the same was suggested to be dispensed.

14. In the instant case, neither the show-cause notice nor the impugned order state about any urgency nor any total damage to the funds or to properties of the Society was stated, so also nothing has been said that it would be impossible to take effective action for the protection of interest of the Society. In the circumstances, it could not be said that there was urgency, therefore, show-cause notice was not necessary or that the notice of 48 hours could be said to be sufficient.

15. ' The alleged show-cause notice, dated 12-6-1997 which as per respondents' submissions was served though it was not necessary and thereby there has been no violation of natural justice in terms of maxim "audi alteram partem". Reference may be made to (i) Abdus Saboor Khan v.

16. Karachi University and another (PLD 1966 SC 536) wherein at page 539 it has been observed:--- "The principle governing such cases was laid down by this Court in the case of the University of Dacca. Zakir Ahmad (PLD 1965 SC 90). It was observed therein that 'whenever any person, or body of persons, is empowered to take decisions, after ex post facto investigation into facts which will result in consequences effecting the person, property or other right of another person, then, in the absence of any express words in the enactment giving such power, excluding the application of the principles of natural justice, the Courts of law are inclined generally to imply that the power so given is coupled with a duty to act in accordance with such principles of natural justice as may be applicable in the facts and circumstances of a given case'. This is the principle embodied in the maxim audi alteram partem and has been applied by this Court in other cases where orders passed by administrative tribunal or authorities, affecting the rights of citizens, in point of property, or other rights, had been passed, without giving an opportunity for defence to the person concerned. 'No one can be condemned unheard', is one of the settled principles of law, and such a principle will be read into the relevant law, unless its application is excluded by express words. A duty is cast on every administrative Tribunal to act fairly and justly and with due regard to the principles of natural justice, unless specifically exempted from such a limitation. Mere omission from the relevant law, of a provision for notice, would not affect this position. Reference in this connection may be made to the cases reported as Chief Commissioner, Karachi v. Mrs. Dina Sohrab Katrak (PLD 1959 SC (Pak.) 45), Messrs Faridsons Ltd. v. The Government of Pakistan and another (PLD 1961 SC 537) and Abdur Rehman v. Collector and Deputy Commissioner, Bahawalnagar (PLD 1964 SC 461)."

(ii) University of Dacca and another v. Zakir Ahmad (PLD 1965 SC 90) wherein their Lordships of Supreme Court observed at pages 103 and 104:--- "....That in all proceedings by whomsoever held, whether judicial or administrative, the principles of natural justice have to be observed if the proceedings might result in consequences effecting 'the person or property or other right of the parties concerned.' This rule applies even though there may be no positive words in the statute or legal document whereby the power is vested to take such proceedings, for, in such cases this requirement is to be implied into as the minimum requirement of fairness.' ..Where any person or body of persons is empowered to take decisions after ex post facto investigation into facts which would result in consequences affecting the person, property or other right of another person, then in the absence of any express words in the enactment giving such power excluding the application of the principles of natural justice, the Courts of law are inclined generally to imply that the power so given is coupled with the duty to act in accordance with such principles of natural justice as may be applicable in the facts and circumstances of a given case. 'the requirements of natural justice must depend on the circumstances of the case, the nature of the enquiry, the rules under which the Tribunal is acting, the subject-matter that is being dealt with, and so forth'. Nevertheless, the general consensus of judicial opinion seems to be that, in order to ensure the 'elementary and essential principles of fairness' as a matter of necessary implication, the person sought to be affected must at least be made aware of the nature of the allegations against him, he should be given a fair opportunity to make any relevant statement putting forward his own case and 'to correct or controvert any relevant statement brought forward to his prejudice.'

17. Of course, the person, body or authority concerned must act in good faith, but it would appear that it is not bound to treat the matter as if it was a trial of to administer oath or examine witnesses in the presence of the person accused or give him facility for cross-examining the witnesses against him or even to serve a formal charge-sheet upon him. Such a person or authority can obtain information in any way it things fit, provided it gives a fair opportunity to the person sought to be affected to correct or contradict any relevant statement prejudicial to him. In other words, 'in order to act justly and to reach just ends by just means' the Courts insist that the person or authority should have adopted the above ' elementary and essential principles' unless the same had been expressly excluded by the enactment empowering him to so act.

(iii) Subedar (Retd.) Malik Ghulam Hussain v. Jamil Ahmad Khan and others (1993) MLD 521) where D.B. Of this Court observed that properties of petitioner attached without show-cause notice before issuance of such order when the petitioner was neither served nor heard before the order of attachment of his properties, therefore, the action was violative of principles of natural justice as embodied in the maxim "audi alteram partem".

18. In the circumstances as no due opportunity of hearing was afforded to the petitioners, the same being in violative of the natural justice, the impugned order in absence of show-cause notice is held to be void and of no legal effect hence is declared accordingly.

19. ' It will be seen that show-cause notice, dated 12-6-1997 was addressed to the Chairman Fisheries Cooperative Society whereas the impugned order was passed superseding the Committee (Board of Directors) of Fisheries Cooperative Society. It will be seen that the Deputy Director (H.Q.) Live Stock and Fisheries Department wrote a letter on 12-6-1997 to Secretary Food and Agriculture wherein para. 5 stated that Planning and Development Department has got approval of the competent Authority for dissolution of Board of Directors (Fishermen's Cooperative Society) and appointment of an Administrator which would mean that in fact decision was already taken and was not taken by the Registrar respondent No,1 but by some other authority called the competent authority considering that it would be the Registrar under the Rules to take action for supersession of the Committee (Board of Directors) and not by any other so-called competent authority as stated in Annexure 'E', dated 12th June, 1997.

20. ' Next contention of the learned counsel for the petitioners is that the action of respondent No,4 is mala fide as well has merit and force. It will be seen from the documents produced that the respondents Nos.2 and 3 wanted the petitioner No,1 to execute an agreement in favour of respondent No,2 as per notification, dated 11th day of November, 1996 whereby the petitioners'

21. Society was to pay 50% of commission collected by the Society through mole holders and the said action as per notification was also taken unilaterally in violation of the rule 18 of Karachi Fisheries Harbour Authority Ordinance II of 1984 whereas the contribution of the Society was to be agreed upon mutually between Society and Authority and further that as per proviso to Rule 6 of the said Ordinance number of members including Chairman appointed by Government shall always be less than the nominees of the Society whereas the Government in contravention of said rule increased members of the Government more than the members of nor-inees of the Society.

22. Besides, the manner and circumstances under which the impugned order of supersession of the Managing Committee was passed on the face of record appeared to be mala fide one, consequently, the impugned order on this count is void and of no legal effect. Accordingly, the impugned notification regarding supersession of the Society's Committee is declared to be void and of no legal effect on the said count as well.

23. ' Learned counsel for respondents has referred to Federation of Pakistan and others v. Haji Muhammad Saifullah Khan and others (PLD 1989 SC 166) at page 194 but on going through this cited judgment, the facts of the case are quite different and distinguishable to the facts of instant case because in the said case the maxim "Fiat Justitia, ruat coelum"--Let justice be done, though heavens should fall" was considered but in the instant case no greater harm could be caused to the respondents than what has been caused to the petitioners' Society which was an elected body and the respondents have without affording sufficient opportunity of hearing to the petitioners and caring for the natural justice with mala fide intentions passed the impugned orders to the disadvantage of the petitioners' Society hence the cited case would have no application as it would not lend to justice being done.

24. Before parting with the judgment, the question remains to be decided that as to what should be done when the tenure of three years of the petitioners' Society has expired on 10-1-1997 as the elections were held on 11-11-1994, considering that there have been allegations against the petitioners of corruption and misma nagement, poor and unhygienic condition within the Karachi Harbour Area, therefore, instead of restoring the petitioners to the office, we would like to order that Mr. Bashir Ahmed Memon the former Official Assignee would take over complete control of the petitioners' Society and hold elections for the Society within the period of three weeks from today in accordance with rules and bye-laws and Constitution of Society in force. Mr. Bashir Ahmed Memon will be at liberty to consult and discuss the matters and problems of the Society with any one he would deem necessary and proper in order to run the management of the Society and to hold elections. He will manage and lookafter the work of the Society till the elections are held and the control of the committee passes on to the new elected body of the Society. Mr. Bashir Ahmed Memon's tentative fee is fixed at Rs,25,000 to be paid from the Society's account.

25. ' The petition is allowed in terms of above order, consequently, the listed applications are also disposed of as above.

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