1. By this application the defendant No.8, seeks rejection of plaint on the ground that the plaintiff has filed suit in 'respect of an issue which touches the business of the plaintiff, a Co-operative Society and thus, the jurisdiction of this Court is barred under the mandatory provisions of sections 54 and 70-A of the Cooperative Societies Act, 1925.
2. ' Briefly stated the relevant facts as contained in the plaint are that, plaintiff is a Cooperative Housing Society formed with the object of providing housing facilities to the members of the Parsi.
3. Community. The society is meant for the persons belonging to the Parsi community only. However, after 50 years of its existence, the infrastructure of the society is being eroded by some errant members of the Parsi community and they have started selling plots to the persons other than Parsi community for making large profits. It is alleged that according to by laws, no member of the society can sell the property to any person, other than a Pirsi community. It is further alleged that the lessee of plot in the society is not legally entitled to transfer the property in name of buyer and selling shall not affect the right and title in the property. It is further alleged that the structure on the plot belongs to member while the land is vested in the society and therefore, the land can not be sold. It is further averred that the defendants Nos.] and 2 committed fraud on the plaintiff's society and sold a plot to the defendant No.8, Mr. Muhammad Tahir Qureshi, who has illegally and fraudulently purchased the immovable property knowing that the plaintiff's society is meant for Paris only. On the basis of above averments following relief has been sought in the plaint:-- _a) _ Declaration that the plaintiff being lessees by virtue of a deed of lease granted by the Secretary of State in Council are entitled to ensure that the members comply with the Bye-laws of the society, the terms and conditions of the sub-lease as well as the undertaking and agreement dated 1925.
(b) Declaration that the defendants Nos.1 and 2 have illegally sold the property bearing Survey No.19, Plot No.JM 23, Katrak Parsi Colony, Karachi to defendant No.8 in violation of the Bye-laws and have therefore, forfeited their rights to retain the property and membership in the society.
(c) Cancellation and surrender of the registered sale-deed and the registered irrevocable general power of attorney in respect of the immovable property bearing Survey No.19, Plot No.JM 23, Katrak Parsi Colony, Karachi.
(d) Permanent injunction restraining the Attorneys of defendants Nos.1 and 2, who have been fraudulently authorized to sell the entire property, from executing a deed of sale.
(e) Declaration that the property has been illegally sold and the sale-deed is therefore, void.
4. Hence, the plaintiff is entitled to recovery of damages/compensation to the domination of Rs.65 lacs which amount the defendants Nos.1 to 7 have enriched themselves at the expense and detriment of the plaintiff society.
(f) Permanent injunction restraining the defendant No.8, who is a trespasser, from occupying the property and sealing of the said property. Further permanent injunction restringing defendant No.8 from creating third party interest and/or demolishing the property and/or raising illegal and unauthorized construction.
(g) Mandatory injunction directing the defendant No.8 to hand over the vacant possession of the property to the plaintiff. The defendant No.8 on account of his trespass has created irreparable damage to the Society. "
5. ' Heard Mr. Faisal Arab learned counsel for the applicant/defendant No.8 and Mr. Agha Faisal learned counsel for the plaintiff. Mr. Faisal, has submitted that allotment of plot is a matter which touches the business of society and consequently the suit is barred under section 54(a) of the Cooperative Societies Act, 1925 read with section 70-A, thereof. In support of his contention, he has placed reliance on the following reported and un-reported judgments:--
(1) Shahid Agencies v. Collector of Customs 1989 CLC 1938.
(2) Sajjad Hussain Khan v. Muhammad Hanif Siddiqui 1990 MLD 25.
(3) Haji Shafi Muhammad Jamote v. Finshermen Cooperative Society Limited 1999 MLD 1668.
(4) Suit No.476 of 2000, R.F. Virjee v. Virasp P. Mehta and others (SB).
(5) H.C.A. No.1 of 2001, R.F. Virjee v. Virasp P. Mehta and others (DB).
(6) Civil Petition No.269-K of 2002, Rustom Firoze Virjee v. Viras P. Mehta and 5 others (SC).
6. ' On the other hand Mr. Agha Faisal, learned counsel for the plaintiff has opposed the rejection of plaint and has submitted that facts of the cases on which Mr. Faisal Arab, Advocate has placed reliance are distinguishable from the facts of the present case and consequently, the ratio of the judgments are not attracted. He has maintained that in all the cases on which Mr. Faisal Arab has placed reliance, the dispute was between members or past members and the society. So far, the present case is concerned, the main contesting party defendant No.8 (the applicant) is not a member of society and has not even applied for membership of the society. He has further submitted that complicated questions of law and a question whether the members of the society to whom lease was granted acquired any title in the plot or not and whether the right and title in the plot can be transferred or not are involved, which can not be decided by the Registrar Cooperative Society or its nominee and the issues involved can be adjudicated upon by the Court only, therefore, the question of ouster of jurisdiction is not applicable. In support of his contention he has placed reliance on the following judgments this Court:--
(1) Amir Ali Hussain Shalwani v. Ismaili Masalwala 2001 YLR 2537 (SB).
(2) Muhammad Waheedullah Ansari v. Zubeda Sharif PLD 2002 Karachi 414 (D.B).
7. ' He has submitted that in the case of Amir Ali Hussain, it has been held that the provisions contained in section 54 of the Co-operative Societies Act, 1925, shall be attracted if dispute touches the business of society and arises between the persons classified in Clauses (a) to (e). However, if one of the parties is neither a member nor a past member of the society, the provisions of section 54 are not attracted. It is further held that under proviso to section 54 if the question at issue between the society and the claimant or between the different claimants is one involving complicated question of law and facts, it is to be decided by the Civil Court and not by the Registrar Cooperative Society.
8. ' In the case of Muhammad Waheedullah Ansari, a Division Bench of this Court held that every dispute between the persons mentioned in section 54 of the Cooperative Societies Act, 1925 could not qualify to be a dispute touching the business of society, merely because the subject/ business of the suit property was managed and controlled by the society. It has further been held that matters arising out of contractual obligation between the members, past members or persons claiming through such members having no nexus with the business of society cannot be referred to the arbitration under section 54 of the Act, and therefore, the provisions contained in section 70- A were not attracted.
9. ' I have carefully considered the facts obtaining on record, the contentions raised by the learned Advocates for the parties and the judgments relied upon.
10. It is admitted fact that the main contesting party i.e. Muhammad Tahir Qureshi, the defendant No.8, who has submitted application for rejection of plaint is not a member of plaintiff's society. Thus, the matter is not between the members, past members or between the member and past members and the society. Further it cannot be denied that several complicated questions of law are involved which can be properly decided by the Court only and not by the Registrar Cooperative Societies. I am persuaded to agree with the submission of W Agha Faisal, learned counsel for the plaintiff that the ratio of judgments 'on which Mr. Faisal Arab, has placed reliance are not attracted for the reason that in all those cases the matter was between members of the society. However, the ratio of the two judgments on which Mr. Agha Faisal, has placed reliance are fully attracted to the present case and consequently, it is held that it is not a fit case for rejection of plaint or for reference to the Registrar Cooperative Societies for arbitration. The application under Order VII, rule 11, C.P.C., stands dismissed accordingly.