' This is an application under Order VII, Rule 11, C.P.C. Filed by defendant No,1. In this application the defendant No,1 has prayed that the suit should be dismissed as it is barred under sections .54 and 70 of the Co-operative Societies Act, hereinafter referred to as the Act.
2. Briefly the facts of the case are that the plaintiff had a partnership business with the husband of the defendant Muhammad Sharif. This partnership deed was dated 1st March, 1949. Besides the above the nephew of Muhammad Sharif i,e, Muhammad Ansari were also made partners. The partnership business was carried out in the name and style of Banaras Silk House, hereinafter referred to as the firm. It is contended that during the course of the partnership business various properties were purchased by the partners from time to time. One of the properties purchased during the course of the partnership was a property in suit situated at 944 P113 Colony, Karachi.
According to the plaintiff he had also purchased an adjacent Property hearing No,943, PIB Colony, Karachi in his own name. However, the cost was paid from the funds of the firm.
3. In the year 1962 Muhammad Sharif and Muhammad Ansari retired from the firm vide deed of retirement dated 20-11-1962. The final assets and liabilities of the firm were partitioned. Both parties agreed that a valuation shall be done and amount would be settled between them. It was then agreed to partition the business in Dacca (former East Pakistan and now Bangladesh). This was delayed due to various reasons which at present moment one need not go into as these are factual controversies for which evidence would have to be recorded. It was agreed by both the parties that actual transfer shall be completed after going through the process of law. It is further contended by the plaintiff that after obtaining the title documents all the dues of the property were paid by him. Since the two properties i,e, Houses Nos.943 and 944, PIB Colony, Karachi were adjacent to each other, till the year 1991 he received only one tax bill.
4. In the year 1973 the plaintiff Muhammad Sharif along with his son and nephew who are also partners in the various enterprises agreed to refer all the basic disputes to arbitration. They entered into a written agreement dated 4-6-1970 whereby five arbitrators were appointed to decide all the disputes. Copy of the agreement has been filed with the plaint. The arbitrators gave their decision on 1-8-1970, which was signed by four arbitrators.
However, according to the plaintiff 5th arbitrator Mr. Abdul Quddos who was father-in-law of Muhammad Sharif's nephew Muhammad Ansari did not sign the decision. The said award of the arbitrators is also filed with the plaint. According to the decision of four arbitrators (majority decision) Muhammad Sharif had to transfer within one month the House No,944 to the plaintiff. The arbitrators in turn awarded the property in Dacca Bangladesh to Muhammad Sharif. However, till the death of Muhammad Sharif in the . Year 1980 the said Quarter No,944 was not transferred in the name of the plaintiff.
5. According to the plaintiff Pir Ellahi Rux, Cooperative Housing Society (defendant No,2) had asked Muhammad Sharif to pay the construction charges and other dues. The plaintiff in turn had asked Muhammad Sharif many times for transfer Of the property so that the ' matter may be regularised.
The plaintiff paid all the charges to defendant No,2, who issued a certificate dated 20-111986 that all the dues of the said Quarters Nos.944 and 943 were fully paid by the allottee Waheedullah Ansari (plaintiff). According to the plaintiff he had obtained the said Quarter No,944 in an incomplete condition and the balance construction was done by him and the whole house was constructed by him at his own costs.
5. That in the year 1991 official from Property Tax Department (Excise and Taxation) visited the said Quarters Nos.943 and 944 and asked the plaintiff's grand daughter for production of documents.
The plaintiff being suspicious made enquiries and found out that an attempt was going to be made to dispossess him from Quarter No,944 and it will be handed over to one Muhammad Ansari.
In order to dispossess the plaintiff from Quarter No,944, the measure that was to be taken was to bifurcate the two properties. This was in spite of plaintiff's objections that he was in possession of both the Quarters and was the lawful owner. However, from the year 1992 plaintiff s started receiving two challans, one for Quarter No,943 and other for Quarter No,944. Thereafter, a new challan was issued wherein Quarter No,944 was not mentioned and it is then for the first time that he was informed that the property tax in respect of Quarter No,944 would be collected from Zubaida Sharif i,e, the defendant No,1 who is daughter of Muhammad Sharif. It is further contended by the plaintiff that by concealment of material facts, misrepresentation, collusion and fraud defendant No,1 through her father-in-law Muhammad Ansari got ownership of Quarter No,944 mutated in her name in the record of Property Tax Register, in Excise and Taxation Wing. Thereafter, the plaintiff received a property challan of Quarter No,944 for the year 1993-94 in the name of Zubaida Sharif. However, he paid the amount as according to him he was the lawful owner. The plaintiff thereafter enquired from defendant No,2 and was surprised to learn that in spite of the certificate having been issued by defendant No,2, they had issued a sub-lease dated 12-5-1991 in respect of Quarter No,944 to defendant No,l. According to him this action of defendant No,2 of granting a sub-lease without giving the plaintiff an opportunity of being heard was illegal as the plaintiff has been in continuous uninterrupted and peaceful possession of the said quarter since 1962. The plaintiff has further pointed out that the deceased Muhammad Sharif had handed over the said property to the plaintiff and continued to live for more than 18 years and till his death he did not get any sub-lease made in anybody's name as it amounted to fraud. According to the plaintiff the sub-lease dated 12-5-1991 that was registered before the Sub-Registrar showed Zubaida Sharif as living in Quarter No,944, PIB Colony, Karachi. It is further contended that necessary payments have been made and possession has been delivered to her. According to the plaintiff these glaring wrong statements in the Sub-lease is enough to show that the entire process of obtaining sub-lease was illegal. The plaintiff has, therefore, further contended that while making out a sub-lease no notice by the defendant No,2 has been given about the cancellation of the allotment. He has further pointed out that he had asked the defendant No,2 to cancel the impugned sublease dated 12-5-1991 which is illegal and void ab initio but the said Society had refused to cancel the same. He has further prayed that he should be declared as rightful owner and also for the cancellation of the sub-lease dated 12-5-1991 in the name of defendant No,1 in respect of Quarter No,944, NB Colony, Karachi. This suit was filed in the year 1994. The present application has been filed by the defendant No, 1 in the year 1997.
6. The learned counsel for defendant No,1 whilst leading his arguments has pointed out that it begin with only the averments made in the plaint are to be taken into consideration whilst deciding the application under Order VII, Rule 11, C.P.C. He has relied upon PLD 1978 Karachi 267, PLD 1982 Lahore 189 (189-A).
' According to the learned counsel, section 54 of the Cooperative Societies Act deals with dispute and since this is a dispute touching the business of the Society and as stated in section 54 along with subsections (a)(b)(c)(d) and (e) of the Act, therefore, plaintiff should have invoked arbitration as provided under section 54 of the Act instead of coming to this Court. Thereafter, he has relied upon section 70 of the Act which provides that no suit shall be instituted against the Society or any of its officer in respect of any act which touches the affairs of the business of the Society until the expiry of two months after notice in writing is delivered to the Registrar. According to the counsel, there is a plethora of citations available whereby non-issuance of notice as provided under the Act was fatal and the suit was dismissed. He has relied upon AIR 1937 Bombay 231, PLD 1970 Karachi 200, 1984 CLC 2914, PLD 1995 Karachi 399. From the judgments cited above it is clear that the provisions of section 70 is mandatory and if notice is not given then the Court is prevented from entertaining the suit. In all the cited cases the suits were dismissed. The arguments led by Mr. Azizul Hassan, learned counsel for defendant No,1 were adopted by Mr. Muhammad All Jan, learned counsel for defendant No,2.
7. According to the learned counsel for the plaintiff who has dealt at length about the maintainability of his suit, the suit would be hit by section 70 if it was shown that he was a member of the Society and it touches/affects the business of the Society. In support of his above contention he has relied upon PLD 1959 Karachi 497, 1991 CLC 247 and 1987 MLD 2999.
' It is apparent from the citations given above that it is a mandatory provisions under the Cooperative Societies Act whereby under section 54 the parties are to go through arbitration if it touches the business of the Society. The plaintiff has drawn my attention to the facts of the case which deal primarily with the dispute between the plaintiff and defendant No,1 rather than the plaintiff and defendant No,2. From the facts mentioned it would be apparent that the main objection has been taken by the defendant No,1 who is not a cooperative society. From the perusal of the plaint and the written statement, it is clear that disputed questions relating to factual controversy which would require evidence in order to clearly determine who is the owner of the plot in dispute and whether the subsequent action of the defendants were legal or not; and that whether the- prayer of the plaintiff can be answered in the affirmative. The prayer in the suit is against the defendant No,1, in fact no prayer has been made or sought against defendant No,2. It is further observed that defendant. No,2 has been made as pro forma defendant. The citations relied on by the defendant clearly show that there is a prayer against the Cooperative Society and that a dispute did exist which touched the business of the Society. From .The perusal of the plaint even though the defendant No,2 has been shown as a pro forma defendant, it is clear that the defendant No,2 is a necessary party in the proceedings. The body of the plaint as well as paragraph showing the cause of action does show that the plaintiff shall ultimately have to take re-course for getting his grievances redressed by the defendant No,2. The sublease that has been granted by the defendant No,2 shall have to be cancelled in case if the plaintiff was to succeed in the suit. The cancellation shall have to be done by the defendant No,2. The plaintiff has also prayed that he should be declared as the rightful owner of the said Quarter No,944. He has sought direction that the grant of lease and all other actions taken by the defendant No,2 should be.
Cancelled. Even though no specific prayer has been made against the defendant No,2. I am convinced that the defendant No,2 is a necessary party and it does affect the business of the Society.
' Under the circumstances due to non-issuance of notice under section 70 of the Act, this suit fails and is accordingly rejected with no order as to costs.