2019 PLP 919 (MLD)

RAJA SAEED AKRAM KHAN, J.

The captioned appeal by leave of the Court has been filed against the judgment and decree of the High Court dated 26.05.2017, whereby, the appeal filed by the appellants and proforma-respondent No.1, herein, has been dismissed.

2. The facts as emerged from this appeal are that respondent No.1, herein, filed a suit for recovery against defendant-appellants, herein, and others in the Court of Additional District Judge Dadyal, Camp Mirpur on 13.12.2002. It was averred in the plaint that Appellant No.1, herein, granted approval of Kashmir Co-operative Development Corporation, under section 9 of the Co-operative Societies Act, 1925. The society was given the name of Kashmir Co-operative Development Corporation (KCDC) with its headquarter Muzaffarabad. It was alleged that the Society framed its bye-laws which were stretchy and defective, however, Appellant No.1, herein, granted approval for registration of the Society on 21.05.1998. It was further averred that the Society was converted into a Banking Society and it started its banking business at Mirpur and the matter was brought into the notice of the Circle Registrar, Mirpur that the bye-laws are being violated but despite this fact, the Registrar, granted approval of two branches in the meeting of the Society dated 17.02.2000. It was alleged that due to its fake business, the Society stood liquidated vide order dated 03.04.2001 and an FIR in the offences under sections 419, 420, 467, 468, 471 and 109, A.P.C., was also registered on 20.09.2000. It was claimed that a committee was constituted for auction of the assets of KCDC, but no proceedings have been initiated so far. The trial Court after necessary proceedings decreed the suit. The appellants and proforma respondent, herein, i.e., Registrar Co-operative Department, feeling aggrieved from the judgment and decree passed by the trial Court filed an appeal before the High Court. The learned High Court dismissed the appeal vide impugned judgment and decree dated 26.05.2017, hence, this appeal by leave of the Court.

3. Mr. Abdul Rashid Abbasi, Advocate, the learned counsel for the appellants argued that the impugned judgment is against law and the facts of the case which is not sustainable in the eye of law. He contended that the concurrent findings recorded by the Courts below are based on misreading and non-recording of evidence brought on record. In support of his argument, the learned counsel referred to the statement of a witness produced by respondent No.1, namely, Altaf Hussain and audit report available on record as Exh.PA. The learned counsel forcefully contended that plaintiff-respondent No.1, himself being an office holder of KCDC was equally responsible for any activity of KCDC, therefore, the suit filed by him was not maintainable as he had not come to the Court with clean hands. He added that the allegation leveled against the appellants is totally incorrect as the registration certificate as well as bye-laws of the KCDC clearly speak that KCDC has been registered as a Co-operative Society and it is nowhere permitted or authorized to carry-out banking transactions or act as a banking company. He added that nothing is available on record to show that the appellants have granted the approval to the Society to carry out the business as Banking Company, therefore, the appellants cannot be held responsible for any unlawful activity of the members of KCDC or its employees. The learned counsel maintained that under the provisions of sections 51 and 70 of the Co-operative Societies Act, 1925, the civil suit was barred but the Courts below failed to appreciate this aspect of the case.

4. Conversely, Barrister Hamyun Nawaz Khan, Advocate, the learned counsel for respondents Nos.1 to 10, strongly controverted the arguments advanced by the learned counsel for the appellants. He submitted that the impugned judgment is perfect and legal. The concurrent findings of facts recorded by the Courts below are based on proper appreciation of evidence brought on record, therefore, interference by this Court is not warranted under law. He contended that no appeal was filed against respondents Nos.2 to 11 and proforma respondents Nos. 22 to 32, therefore, decree to their extent has attained finality and instant appeal against them is not maintainable. He added that it has fully been proved from the evidence brought on record that the appellants were fully aware of the illegal banking business by the KCDC, but despite that they further allowed for opening of 7 more branches vide letter dated 24.02.2000, moreover, they also protested against taking cognizance of the criminal activity by the District Magistrate vide their letter dated 23.10.2000. The learned counsel contended that the appellants have totally misconceived and misconstrued the contents of basic suit. Respondent No.1, herein, filed suit for recovery of money from the appellants and others which they have looted from the respondents. He added that the appellants fully participated in the illegal activities and caused huge loss to the respondents and this fact has fully been proved by the evidence brought on record, therefore, the trial Court rightly decreed the suit and the learned High Court has not committed any illegality while concurring with the findings recorded by the trial Court. The learned counsel submitted that the provisions of sections 51 and 70 of the Co-operative Societies Act, 1925 are not attracted in the instant case as respondent No.1, filed suit for recovery of amount looted by the appellants. The learned counsel prayed for dismissal of appeal.

5. Syed Hazoor Imam Kazmi, Mr. Tahir Aziz Khan, Advocates and Raja Akhlaq Hussain Kiani, Additional Advocate-General while appearing on behalf of some of the proforma respondents adopted the arguments advanced by the learned counsel for the appellants and prayed for acceptance of appeal.

6. We have heard the arguments and gone through the record made available along with the impugned judgment. The learned counsel for the respondents during the course of arguments stressed that leave was granted only on the ground that legal question of interpretation of the provisions of Co-operative Societies Act, 1925, regarding bar of civil suit, is involved in the matter, whereas, the respondent No.1, filed recovery suit and the provisions of Co-operative Societies Act, 1925 are not attracted. The argument of the learned counsel for the respondents has no substance as leave was not granted only on one ground rather this Court held that among others the legal question of interpretation of the provisions of Co-operative Societies Act, 1925 regarding bar of civil suit, appears to be of first impression requiring detailed deliberation. In the light of the arguments advanced at bar, before attending the other points involved in the matter, we deem it proper to consider at first the point; whether the recovery suit filed by respondent No.1, was maintainable or not. It is an admitted fad that the plaintiff-respondent No.1, herein, who filed suit against the appellants and others had also been performing function as Assistant Chief Executive in KCDC and he was fully aware of the fact that the Co-operative Society despite bar imposed under law, is also working as a Banking Company and he supported the illegal business. In this regard, the appointment order of the plaintiff-respondent No.1, herein, available on record as Exh.LL/3 and the ground taken in the plaint are very much clear. It will be advantageous to reproduce here the relevant ground of the plaint which reads as under:-- A brochure produced by the plaintiff; available on record as Exh.PLL/1, further strengthens this position that full details of the illegal banking business of the KCDC, were in the knowledge of the plaintiff. A witness of the plaintiff, namely, Altaf Hussain, while recording his statement has admitted that the plaintiff-respondent No.1, has also been involved in the illegal business. For better appreciation the relevant portion of his statement is reproduced here which reads as under:- The other witnesses produced by the plaintiff-respondent No.1, herein, namely, Abdul Saboor and Arshad Mehmood also stated that the plaintiff was working as an officer of the Bank. The plaintiff-respondent No.1, herein, in support of the suit heavily relied upon an audit report, available on record as Exh.PA, the perusal of which shows that the auditors pointed out a number of illegalities and irregularities in the business of KCDC and held responsible all the officials of KCDC in a number of paragraphs of the audit report, moreover, the name of the plaintiff-respondent No.1, herein, is also specifically mentioned in paragraph XIX of the audit report.

7. After examining the record it appears that the plaintiff filed suit after the commencement of liquidation proceedings of KCDC, therefore, in view of the evidence brought on record and the circumstances of the case we agree with the stance taken by the learned counsel for the appellants that the plaintiff did not come in the Court with clean hands. It is pertinent to mention here that we do not put the whole responsibility of the illegal business on the shoulders of the plaintiff-respondent No.1, or clean chit is not being given to the appellants, however, as except, plaintiff-respondent No.1, none of the affectees of the illegal banking business approached the Court and the suit filed by plaintiff-respondent No.1 was not maintainable as being participant in the illegal business, he is estopped by his own conduct to approach the Court. The plaintiff at one hand was fully involved in the illegal business, as has been discussed hereinabove, but on the other hand he filed suit against the appellants and others on the ground that they caused huge loss to him and others through the illegal banking business. It may also be observed here that under law no one can be allowed to approbate and reprobate in the same breath. In this regard, reference may be made to a case reported as Mst. Sabira Begum v. Hakim Muhammad Akhtar and another [1993 MLD 955], wherein it has been held that:- "Irrespective of the nature of the transaction, Jamaluddin cannot be allowed to appropriate the benefits under it while decrying the advantages accruing to others. This would be the equivalent of premium on wrong doing. Besides, no one can be countenanced to approbate and reprobate in the same breath." As the suit filed by the plaintiff was not maintainable on the afore-mentioned ground, therefore, to avoid the futile exercise we do not intend to discuss the other points raised by the counsel for the parties. In the light of the above discussion this appeal is accepted and while setting aside the judgments/decrees passed by the Courts below the suit filed by the plaintiff-respondent No.1, herein, is dismissed being not maintainable. No order as to costs. ZC/15/SC(AJ&K) Appeal allowed.