P L D 1961 Supreme Court 215 (PLP)

HAMOODUR RAHMAN, J.‑These appeals, by special leave, are directed against the judgment and order of the High Court of West Pakistan issuing a writ of certiorari for quashing certain arbitration proceedings ordered by the first appellant in Civil Appeal No. 91 of 1960 to be proceeded with under section 54 of the Sind Co‑operative Societies Act, 1925, by the nominee of the Registrar of Co‑operative Societies, the second appellant in the above‑mentioned appeal. Wali Muhammad Habib, the first named respondent in both these appeals (hereinafter referred to as the "respondent"), who was a member since 1952 of the Zamindari Co‑operative Bank Limited, Nawabshah (the appellant in Civil Appeal No. 92 of 19t0) a Co‑operative Society (hereinafter referred to as the "bank"), had obtained in the year 1955 a lease of a ginning factory at Nawabshah known as the Lalchand Nenumal Factory, and had entered into an agreement in writing with the bank in August 1955 for ginning and pressing its Phutty cotton on the terms and conditions men tioned in the said agreement. By this agreement the bank, inter alias undertook to pay a sum of rupees one lac to the respondent by way of security to be adjusted proportionally against the charges for the ginning and pressing of cotton and further agreed that all disputes arising between the parties thereunder shall be referred to the arbitration of one Mr. Ahmad Ali Dino Bhagat, whose decision shall be binding on both the parties. At or about this time the respondent and the bank, it is said, also entered into an oral agreement, according to the bank, for the sale of its member's ginned and baled cotton at the Karachi market. This was said to be merely an arrangement with the respondent in his capacity as a member and, as such; no formal agreement was drawn up. The respondent, however; maintains that by the latter agree ment he was entrusted both with the sale and the purchase of processed and ginned cotton at Karachi as a commission agent according to the usages of the cotton market at Karachi. The terms and conditions of this latter agreement were not recorded in writing, as they were, under the usages of the said market, to be subject to, and governed by, the rules and regulations of the Karachi Cotton Association Limited, of which also the said respondent was a member. It appears that in respect of the transactions carried out under the latter arrangement certain disputes arose between the bank and the respondent which the bank under the provisions of section 54 of the Sind Co‑operative Societies Act, referred to the Registrar of Co‑operative Societies for decision and the latter nominated one Mr. Faiz Muhammad A. Awan, District Co‑oprative Officer, Hyderabad, as his nominee in the matter. The said officer in the exercise of his powers under section 55 of the said Act purported, on the complaint of the bank, to attach before the award the goods lying in the factory of the respondent and to take steps to have them sold by auction. The respondent, however, preferred an appeal against the said order of the Registrar's nominee and obtained an ad interim order from the Assistant Registrar, Co‑operative Societies, Sukkur, suspending the auction of the attached goods. Thereafter, during the pendency of the said appeal a fresh agreement in writing was entered into between the bank and the respondent on the 28th of February 1957. By this agreement they mutually adjusted many of their respective claims, accepted a basis for the settlement of' some other outstanding matters and agreed to refer the remaining unsettled disputes and differences, categorised in Schedule `B' appended to the said agreement, to the sole arbitration of one Mr. Khalil Ahmad, President of Nawabshah Grain, Seeds and Cotton Merchants Association Limited, in place of Mr. Ahmad Ali Dino Bhagat and the said arbitration, it was expressly agreed, was to be governed by the provisions of the Arbitration Act, 1940. The bank also agreed to withdraw the proceedings initiated by it under the Sind Co‑operative Societies Act. The said arbitration could not, however, progress, as a dispute again arose as to the mode of payment of the sums thus found to be due and payable. The bank maintained that it had agreed to the latter arbitration only upon the understanding that payment of the dues agreed upon under the agreement of the 28th of February were to be made immediately but the respondent insisted that the award should be made and executed in the usual way. The bank, therefore, pressed for a decision in the appeal pending before the Deputy Registrar, Co‑operative Societies, Hyderabad Region, and the latter on the 22nd of April 1957, held that the dispute related to transactions which were entered into by the respondent as a commission agent in the course of his normal business, and directed that, since in any event the deter mination of the exact relationship between the bank and the respondent involved complicated questions of law and fact, the matter should be decided by a regular suit to be filed by the bank. He also ordered that if the bank should fail to institute the suit within six months, the proceedings initiated under the Sind Co‑operative Societies Act "should be considered as quashed." The attachment before award was also vacated. As against this order the bank moved the Provincial Govern ment in revision under section 64‑A of the said Act, and the latter by its order of the 15th February 1958, set aside the order of the Deputy Registrar passed in appeal and directed the Registrar's nominee to proceed to decide the dispute at the earliest stage. The respondent by the writ petition filed in the High Court challenged the validity of the said order on the grounds inter alia, that the disputes forming the subject‑matter of the reference were outside the purview of the Sind Co‑operative Societies Act and the rules framed there under and that, in any event, the order of the Provincial Government passed in revision was bad, as it was made ex parte without giving the said respondent any opportunity of being heard. The High Court after considering the provisions of section 54 of the Sind Co‑operative Societies Act came to the conclusion that, since the transactions in dispute arose out of the legiti mate business of the appellant‑bank, there did exist a dispute touching the business of the society, but it was not a business which was entrusted to the said respondent in his capacity as a member of the society, hence, the dispute did not come within the purview of section 54 of the said Act and accordingly neither the Registrar nor his nominee nor the Provincial Government had any jurisdiction to decide the matter. In coming to this conclusion the High Court placed reliance on two decisions of the Indian High Courts in the cases of Shyam Co‑operative Housing Society Limited v. Ramibai Bhagwansing Advani (A I R 1952 Bom. 445), and Manjeri S. Karishna Ayyar v. Secretary Urban Bank Ltd. Calicut (AIR 1933 Mad. 682). It is urged on behalf of the appellants that the High Court had fallen into error in relying upon these decisions. For, so far as the decision of the Madras High Court was concerned, it was clearly not applicable, as the provisions of the Madras Co operative Societies Act were not in pari materia. The scope of section 54 of the Sind Co‑operative Societies Act was much wider. So far as the decision of the Bombay High Court was concerned, this decision had in a later case, namely, The Malyan Co‑operative Urban Bank Limited v. Kamalakar Naryan Zantye and others (A I R 1955 Bom. 101), been distinguished by the same High Court on the ground that in the first case the dispute related to an advance made by a member in this capacity as a trustee of a public charitable trust to the Co‑operative Society and was not as such a dispute between a society and its member qua a member. The second case was a case of an advance by the Co‑operative Society to a member and the Bombay High Court, it is pointed out, held in this case that "if there is a debt or a demand due by the member howsoever the debt or demand might arise, provided the debt or demand is due to the society and a claim is made by the society in respect of that debt, or demand" then a dispute with regard to such debt or demand comes within section 54 of the Bombay Co‑operative Societies Act, which is almost identical with the provisions of the Act before us. It appears that the Bombay Act was further amended in 1953 and the decision of the Bombay High Court in the case decided in 1955 was based upon the language of the Bombay Co‑operative Societies Act so amended. Similar provisions do not appear to have been incorporated in the Sind Act. Even otherwise we are un able to accept the contention that the provisions of the second paragraph of section 54 control the earlier provisions of the said section and that the enlarged definition of a "dispute" given in the second paragraph necessarily also enlarges the categories of persons between whom the dispute must arise before it can be subjected to the determination of the special forum therein provided. The provisions of the Co‑operative Societies Act seek to impose restrictions upon the rights vested, under the general law, to have recourse to ordinary Civil Courts for the adjudication of dispute and, as such, the provisions of such an Act should, according to the accepted principles of construction of statutes, be construed strictly, and unless the person or category of persons sought to be so restricted come within the specified words of a statute, either expressly or by necessary intendment, they should not be included within their scope. In construing a statute we should also avoid, if possible, creating any repugnancy between its provisions an give meaning and effect to every portion thereof. Section 54 of the Sind Co‑operative Societies Act, 1925, as modified up to October 1955, reads as follows: "

54. If any dispute touching the business of a society (other than a dispute regarding disciplinary action taken by the society or its committee against a paid servant of the society) arises‑ (a) between members or past members of the society or per sons claiming through a member of past member, or (b) between members or past members or persons so claiming and any past or present officer, agent or servant of the society, or (c) between the society or its committee, and any past or present member of the society, or (d) between the society or its committee, and any past or present officer, agent or servant of the society, or a surety of such officer, agent or servant, whether such surety is or is not a member of the society, or (e) between a financing bank authorised under subsection (I) of section 34 and a person who is not a member of a society, it shall be referred to the Registrar for decision by himself or his nominee, or if either of the parties so desires, to arbitration of three arbitrators who shall be the Registrar or his nominee and two persons of whom one shall be nominated by each of the parties concerned. A dispute shall include the question whether a person is or was a member of a society and also claims by a society for debts or demands due to it from a member, past member or non‑member or the heirs or assets of a past member or non‑member whether such debts or demands be admitted or not: Provided that if the question at issue between a society and a claimant, or between different claimants, is one involving com plicated questions of law and fact, the Registrar may, if he thinks fit, suspend proceedings in the matter until the question has been tried by a regular suit instituted by one of the parties or by the society. If no such suit is instituted within six months of the Registrar's order suspending proceedings the Registrar shall take action as laid down in paragraph 1 of this section." Reading these provisions in the light of the above principles the enlargement of the scope of the word `dispute' in the second paragraph by the introduction of the word "non‑member" therein in 1947 merely has, fn our opinion, the effect of enlarging the nature of the dispute whilst still retaining the condition that such dispute must nevertheless be between the society and the category of persons enumerated in the foregoing clauses (a) to (e) of the said section. If the intention of the Legislature was, as contended on behalf of the appellants that any and every kind of dispute between a co‑operative society and its members or past members of even non‑members should be referable for decision by the tribunal thereby set up, then the legislature, when making the amendment to the second paragraph in 1947, could easily have deleted the previous clauses and made that intention clear. We are, therefore, in agreement with the High Court that the enlargement of the definition of a "dispute" did not also operate to enlarge the category of persons between whom the dispute must-exist. In our view, the dispute must still relate to some kind of transaction in which the categories of persons mentioned in clauses (a) to (e) of the said section have interest in that capacity. The accident merely of a person also falling under any one of the said categories is not sufficient to bring a dispute between him and a co‑operative society within the ambit of the said section. To hold otherwise would amount to rendering clauses (a) to (e) of section 54 nugatory. It is, furthermore, inconceivable that the Legislator intended that any or every kind of dispute, if it merely touched the business of the society, should be dealt with in the manner pro vided in the said section, for, then anyone dealing with a Co‑opera tive Society will have to do so at the peril of being deprived of his ordinary remedies under the general law of the land. Such an intention we cannot possibly impute to the Legislature. It is next urged on behalf of the appellants that, since on his own showing the said respondent was acting as a commission agent of the bank, he fell within the category of the "agent" mentioned in clauses (b) and (d) of the said section. Here again, we are asked to come to this conclusion by giving to the word "agent" the meaning given to it in the Contract Act and to hold that any person employed to do any act for another comes within this category. We are again unable to accede to this request, for it is always unsafe to interpret words in one statute with reference t the sense in which the same words may have been used in other statutes, unless they be in pari materia. The main purpose of interpretation is to ascertain the mind of the Legislature from the words used by it, and in doing so it is a well accepted rule that we must read the words in the context in which they are used, for, the meaning of a word read out of its context may well be totally different and in different contexts or in different association of words may equally well have a sense which has the effect of limiting or restricting its ordinary or popular sense. The rule of noscitur a sociis is too well established to be doubted now Construction of words with reference to the company, in, which they are found, is not a method unknown to law. Thus words, which precede or succeed the word to be interpreted, may legitimately be looked at to ascertain its true meaning, for, we are likely to know it better from the associate terms in the company of which the word has been used. Reading the word "agent" occurring in clauses (b) and (d) of section 54 of the Sind Co‑operative Societies Act in the association of the words "past or present officer" and "servant" used therein we have no hesitation in coming to the conclusion that its meaning is restricted by the words immediately preceding and succeeding it. It is at also not without significance that it is used both in clauses (b) and in the same sequence. Thus the word "agent" referred to in the said clauses is, in our opinion, limited to an agent working under the direct control or supervision of the society and does not extend to a business or commercial agent or factor, in which latter category the respondent No. 1 would more appropriately fall. To give the word "agent" any wider meaning would have the effect of placing upon it an unreasonable construction, for it could not have been within the contemplation of the Legislature that even such commercial agents should be included within this category. To so hold would perhaps lead to the inconvenient result that a co‑operative society might find itself unable to enter into ordinary business or commercial transactions with persons normally engaged therein. Learned counsel appearing for the respondent has also drawn our attention to the provisions of section 22 (4) of the said Act, wherein the word "agent" has been used in similar association with the words "officer" and "servant". The said subsection is in these terms "The Registrar and every other person appointed to audit the accounts of a society shall have power, when necessary (i) to summon at the time of his audit any officer, agent, servant or member of the society who he has reason to believe can give valuable information in regard to any transaction of the society or the management of its affairs, or (ii) to require the production of any book or document relat ing to the affairs of any cash or securities belonging to the society by the officer, agent, servant or member in possession of such book; document, cash or securities." It is inconceivable that by these provisions the Legislature intended to arm the Registrar with power to summon any person who came within the generic description of an agent as given in the Contract Act and even call upon him to produce his books. We are in agreement with the learned counsel that this also indicates that the "agent" referred to in these sections of the Sind Co operative Societies Act is a person over whom, by his position, the society can exercise direct control or supervision and that it has been used in the same sense in section.

54. The word agent is furthermore not a word of art or a technical word. It is susceptible of various meanings, for there may be agents of many kinds. Thus, having regard to this susceptibility of the word, it would be legitimate to give it a reasonable con struction in the light of the purposes sought to be achieved by the framers of the Sind Co‑operative Societies Act and the context in which the word has been used. For the reasons given above we are of the view that the High Court of West Pakistan rightly held that the dispute in the present case did not come within the purview of section 54 of .the said Act, and, therefore, neither the Registrar nor his nominee nor the. Provincial Government had any jurisdiction in the matter. It might also be mentioned here that the contention of the respondent that the transactions, out of which the present dispute arose, did not touch the business of the bank at all is not accept able to us. The objects of the bank, as set out in its Bye-law No. 4, are sufficiently wide to include therein transactions of sale of its member's cotton on commission agency basis. These appeals are accordingly dismissed, but costs will be awarded only in Civil Appeal No. 92 of 1960 to the respondent No.

1. B. Z. KAIKAUS, J.‑I am in agreement with my brother Hamoodur Rahman and only wish to add a few words with respect to the meaning or the word "agent". The word "agent" is used here not in its ordinary but in a limited sense. The juxta position of this word with 'officer' and `servant' shows that he is of a class of persons to which officer and servant belong. It appears to me that intention was to apply the arbitration provision to all persons who were managing the affairs of, or carrying on the business of, the co‑operative society. The word `agent' was introduced because there may be a person who is carrying on the business of the society or managing its affairs although he is neither an officer nor a servant, for instance, a person who runs a depot on a commission basis exclusively for the sale of goods produced by a society. A person like the res pondent who as commission agent sells some goods belonging to society is not carrying on the business of the society but his own business, and therefore would not be within the meaning of the word "agent". The interpretation we are placing on this word supported by a reference to section 22 of the Sind Co‑operative Societies Act. 'Subsection (4) of this section empowers the Registrar to summon at the time of his audit "any officer, agent, servant or member of the society who he has reason to believe can give valuable information in regard to any transaction of the society or the management of its affairs." It appears quite obvious that the word "agent" in this context does not refer to every person who acts for another in any matter which is the definition of "agent" in the Contract Act. It can only refer to a person who is a part of the machinery by which the affairs of the society are managed. A. H. Appeals dismissed.