P L D 1960 (W (PLP)

(d) to determine by what persons and in what proportions the costs of the liquidation are to be borne ; and (e) to give such directions in regard to the collection and dis tribution of the assets of the society, as may appear to him to be necessary for winding up the affairs of the society. (3) Subject to any rules, a liquidator appointed under this section shall, in so far as such powers are necessary for carrying out the purposes of this section, have power to summon and enforce the attendance of witnesses and to compel the produc tion of documents by the same means and (so far as may be) in the same manner as is provided in the case of a Civil Court under the Code of Civil Procedure, 1908. (4) Where an appeal from any order made by a liquidator under this section is provided for by the rules, it shall lie to the Court of the District Judge. (5) Orders made under this section shall, on application, be enforced as follows :‑ (a) when made by a liquidator, by any Civil Court having local jurisdiction in the same manner as a decree of such Court ; (b) when made by the Court of the District Judge on appeal, in the same manner as a decree of such Court made in any suit pending therein. (6) Save in so far as is hereinbefore expressly provided, no Civil Court shall have any jurisdiction in respect of any matter connected with the dissolution of a registered society under this Act." Rule 26 of the Rules framed by the Punjab Government under section 43 (1) of the Co‑operative Societies Act runs "26. (a) On cancelling the registration of a society the Regis trar may publish, in such manner as he thinks proper, a notice requiring claims against the society to be submitted within one month to him or to such person as he may name as liquidator. All liabilities recorded in the books of any society shall be deemed ipso facto to have been duly notified. (b) When the registration of a society is cancelled under section 39 or 40, the liquidator shall take charge of the books of the society in order to wind up its affairs. (c) If necessary, the liquidator may institute suits for recovery of sums due to the society. (d) The liquidator shall proceed to determine the assets and liabilities of the society as they stood at the time of the cancel lation of its registration, and shall determine the contributions to be made by the members and past members, respectively, to the assets of the society. He shall also determine by what persons and in what proportions the costs of the liquidation are to be borne. (e) The liquidator may issue a summons to any person whose attendance is required either to give evidence or to produce docu ments. He may compel the attendance of any person to whom a summons is issued and for that purpose issue a warrant for his arrest through the Civil Court exercising jurisdiction in the area in which the society operates. (f) The liquidator shall send all such processes for service to the Civil Court having jurisdiction in the area in which service is to be effected. The Court shall proceed as if such processes had been issued by it and shall return them to the liquidator with a report of service. (g) He shall make an order noting the names of members and past members of the society and the amount to be realized from each as contribution under clause (b), subsection (2) of section 42, and as costs of liquidation under clause (d) of the same sub section. This order shall be submitted to the Registrar for his approval, and he may modify it or refer it back to the liquidator for further enquiry or other action. (h) A copy of the order as finally approved by the Registrar, accompanied if necessary by list of the property of each member or past member against whom the decree has to be enforced shall be filed in the Civil Court having local jurisdiction to be enforced as laid down in clause (a), subsection (5) of section 42. (i) If the Civil Court is unable to recover the sum assessed against any member or members the liquidator may frame a subsidiary order or orders against any other member or members or past member or members to the extent of the liability for debts of the society, until the whole amount due from the mem bers is recovered and these orders shall be executed in the same way. (j) The liquidator shall submit to the Registrar a quarterly report in such form as the Registrar may prescribe, showing the progress made in the liquidation of the societies placed under his charge. (k) All funds in charge of the liquidator shall be deposited in the Post Office Savings Bank or with such other bank or person as the Registrar may approve. (l) After recovery of the dues of the Society and realization of the contribution and the costs of liquidation from the mem bers and past members, the liquidator shall, after meeting the liabilities of the society wind up its affairs and submit a final report to the Registrar. (m) The Registrar shall fix the amount of the fee, if any, to be paid to the liquidator. (n) No appeal shall lie from any order of the liquidator under section 42." It is true that section 42 (6) of the Co‑operative Societies Act bars the jurisdiction of the Civil Courts in respect of any matter connected with dissolution of a registered society and it is correct too that under rule 26 the liquidator is entitled to deter mine the contribution to be made by members and past members, but, as held by their Lordships of the Privy Council in Secretary of State v. Mask & Company (AIR1940PC105) the jurisdiction of Civil Courts is never altogether barred, because even in cases, where there is a provision as to the exclusion of Civil Court's' jurisdiction, Courts are entitled to see whether the authority concerned acted in compliance with law. If the order of the liquidator is to be found to be without jurisdiction, relief against it can be claimed in Civil Courts. The liquidator is proceeding against the members by executing the orders of contribution which orders, if without jurisdiction, cannot be executed in Civil Courts and the Civil Courts will be entitled to go into the question whether they are with jurisdiction or not.

3. The order of contribution passed by a liquidator can be attacked in a Civil Court on the ground that before he passes such an order he should determine what are the assets and liabilities of the dissolved society in accordance with rule 26 (d). This provision does not expressly say that an order for contri bution can be passed only after determination of assets and liabilities, but this, in my opinion is implied. "Contribution" means that a member has to contribute his (share) of that sum which is the difference between the assets and liabilities of the dissolved society. Of course, ordinarily a liquidator will never pass an order of contribution without first reaching a conclusion as to what is the amount of assets and what is the amount of liabilities and it is only in respect of the amount by which the liabilities exceed the assets that he will pass an order of contribution, but it is open to a party to allege that as a matter of fact he has not reached a conclusion as to the assets and liabilities at all. As a hypothetical case, one can assume that the liquidator passed an order directing every member of the society to con tribute six times the value of his share, that being the maximum contribution which can be ordered. If the party makes such an allegation, then although ultimately nothing may come out of it, the matter has to be tried in a Civil Court and the suit can not be dismissed on the ground that Civil Courts have no jurisdiction at all, for if the facts alleged are true, the Court will have jurisdiction.

4. The second attack on the order of liquidator can be one of collusion or mala fides or something which is so akin to mala fides so as to produce the same legal effect. The liquidator may collude with the debtors and may not realise the amount that they owe to the society. All that is mala fide is in excess of jurisdiction and if collusion or other mala fides could be proved against the liquidator, there is no doubt that the Civil Courts will be entitled to grant relief. The same may even be said of a case where he is so grossly negligent as to attract the application of the principle of mala fides, for if he cannot harm a party by his mala fides he should not be allowed to harm a party by gross negligence. But it is not necessary for me to decide this question.

5. Apart from what has been said above, the act of a liquidator is not liable to be challenged in a Civil Court. A complaint has been made in this case that there are certain debtors against whom he does not proceed. The reply of the liquidator is that the debt does not exist, or is not one in respect of which he should approach a Court of a law. Now, when the matter comes to the Civil Court, the question to be decided by the Civil Court is not whether the debt as a matter of fact exists. The liquidator, after going into the facts of a particular case, may come to the conclusion that there was not sufficient evidence for filing a suit against the alleged debtor. A member of the society may take up the position that a particular person did owe a debt. The alleged debtor may be denying it. The liquidator has to make up his mind as to whether he should or should not file a suit. If he makes up his mind bona fide, there can be no recourse to a Civil Court. It is for the liquidator to decide what action he will take and whether he will or will not proceed against a particular person.

6. In view of what I have said above, the finding of the lower Courts as to the suit being altogether barred by section 42 and the rules framed under section 43 (i) of the Co‑operative Societies Act is not supportable. This issue as to jurisdiction was tried as a preliminary issue and not on evidence. The parties were allowed to produce evidence, but the frame of the issue is not such as to permit its being decided on the facts and not as purely legal issue. In fact, I went through the evidence to find if evidence has been led as to the liquidator having bona fide determined the assets and liabilities and the contribution to be made. Had there been any evidence on the record to this effect, I might have held that on facts there was no case for the jurisdiction of the Civil Court, but I find that the only evidence led was as to the effect of the appointment of the liqui dator. That is of no help in deciding the question of jurisdiction.

7. What I have said above disposes of issues Nos. 1, 3 and

5. So far as issue No. 2 is concerned, the Court at Rawalpindi has jurisdiction because property of the plaintiffs situated at Rawalpindi was being attached and proceeded against. Issue No. 4 has been conceded by the learned counsel who appears on behalf of the liquidator. His position is that the word `officer' in rule 18 of the rules framed by the Government under the Co‑operative Societies Act will apply to an officer of an existing society and has no application to a society which has already been dissolved. It is obvious that the liquidator is not prepared for arbitration. So far as issues Nos. 6 and 7 are concerned, there has been a notice under section 80 in this case and these issues were framed only because this suit was being tried along with two others in which notice had not been given. Those two suits were also dismissed and appeals had been filed, but those appeals had been withdrawn as there was no notice under section 80, Civil Procedure Code.

8. This appeal is accepted. The decree of the learned Senior Civil Judge dismissing the suit is set aside and the case is remanded to the trial Court for decision in accordance with law. K. B. A . Appeal accepted.