P L D 1958 (W (PLP)

KAIKAUS, J.‑This is an appeal by the Lyallpur Co‑operative Society Limited, Lyallpur, against the decree of Chaudhri Muhammad Anwar, Senior Civil Judge, Lyallpur, dismissing the suit of the appellant on the ground that the Civil Court had no jurisdiction to try it.

2. The facts are that the defendant, Chaudhri Ahmad Saeed, who was admittedly a member of the plaintiff Society, was expelled from membership on the 10th of April 1947 on the ground that he had ceased to hold 25 shares of the value of Rs. 100 each as he had sold 12 shares out of the 25 shares held by him. On the 8th of May 1956, Ahmad Saeed defendant‑respondent applied to the Registrar, Co‑operative Societies, for a reference of the dispute between him and the Society as to whether he had or had not ceased to be a member to an arbitrator. The Registrar appointed Mr. Manzur Husain, Deputy Registrar, as an arbitrator and the arbitrator by his award held that Ahmad Saeed respondent continued to be a member of the Society. At this the Society filed the present suit for a declaration that the award dated the 23rd of January 1957 was without jurisdiction, null and void, and for an injunction restraining Ahmad Saeed respondent from interfering with the management of the plaintiff Society. The learned Senior Civil Judge framed the following two preliminary issues :‑ (1) Has the Civil Court jurisdiction to entertain and try this suit ? (2) Can this `Court go into the question of the arbitrator having mis-conducted himself during the course of the pro ceedings before him ? He found on both the issues against the appellant and dismissed the suit. 3 The relevant portion of rule 18 of the rules framed under the Co‑operative Societies Act is as follows :‑ "18, (a) Any dispute concerning the business of a Co operative Society between members or past members of the Society or persons claiming through them or between a member or past member or persons so claiming and the Committee or any officer shall be referred to the Registrar. Reference may be made by the committee or by any party to the dispute or if the dispute concerns a sum due from a member of the committee to the society by any member of the society. (j) An arbitrator's award, if no appeal has been made within a month, or a decision of the Registrar originally or in appeal, shall not, as between the parties to the dispute, be liable to be called in question in any Civil or Revenue Court, and shall be in all respects final and conclusive, except on proof of the receipt of a corrupt gratification by the arbitrator."

4. As I have already held in Nur Husain v. Muhammad Sultan (P L D 1956 Lah. 893), sitting with Shabir Ahmad, J., this rule bars the jurisdiction of the Civil Courts on matters which can be validly, referred to arbitration. On that point there is no contest between the parties. The question, therefore, for decision is whether the dispute involved in the present case is one on which the Registrar could have made a reference.

5. The rule requires two conditions for a reference. The first is that it should be a dispute between members or pasty members of the society or the society and a member or a past member, and the second is that the dispute should relate to the, business of the society. In the present case admittedly Ahmad Saeed respondent is a past member, and the only question would be whether the dispue relates to the business of the society: In Nur Husain v. Muhammad Sultan, I and Shabir Ahmad, J., had held that a dispute which related to the validity of the elections of the president and the managing committee of a Co‑operative Society was not covered by this rule because it related to the status of a person. In Mubarak Din v. Registrar, Co‑operative Societies (P L D 1957 Lah. 1013), S. A. Rahman, C. J. and Muhammad Yaqub Ali, J. were of the opinion that the proposition which we had laid down as to matters relating to status not being matters relating to business was too broad a statement. They were of the opinion that whether a question relates to business should be decided with reference to the particular point that may be in dispute in a particular case irrespective of whether it involved a question of status either as an office‑bearer or as a member.

6. Let me state that with the proposition that we should look to the dispute involved in a particular case in order to determine whether it relates to business, I am in agreement. I had in Nur Husain v. Muhammad Sultan regarded questions of status excluded from the jurisdiction of the arbitrator on the ground, as I explained therein, of the clash that there would be between the judgment of the Civil Court and of the arbitrator in case we held that questions of status could be gone into by the arbitrator. It is always open to any person to go to the Civil Court and claim that he is a non‑member on the ground that there is some liability which is being attributed to him on the allegation that he is a member. Also, a person may sue for a declaration that he is a member when he is in some way being obstructed in the exercise of his rights as a member because his position as a member is not accepted by the other members. Now, if in, this civil suit a declaration of membership or non- membership was given and afterwards in a dispute as to the election of a president or vice‑president the question of member ship or non‑membership of the person who held a declaration in his favour from the Civil Court arose because it affected the result of the election, there may be a clash of findings between the arbitrator and the Civil Court. The arbitrator may when holding whether a particular election was valid decide that the person who voted was in fact not a member and may declare the election to be invalid on that ground though the same person had got a declaration from the Civil Court as to his membership. In the case with which I was dealing (Nur Husain v. Muhammad Sultan), whether an office bearer was validly elected depended upon whether certain persons were in fact members or not and I argued that if they had already got declarations in their favour as to being members, it would not be proper that that declaration should be set at naught by the arbitrator while deciding the dispute as to the election. The question as to whether they were members or not did not by itself depend upon any functioning of the society and was not a question which would relate to the business of the society. For instance, if the question be whether a person was of eighteen years of age or not (majority being a condition for membership), that certainly will not be a question relating to the business of the society.

7. I may also point out another difficulty which would arise if questions of status were left for decision to the arbitrator. Properly speaking, every person in respect of whose status as a member a point is involved in a dispute should be a party to that dispute. If the validity of any election involves the question of whether `A' is or is not a member, it seems to me to be reasonable and proper that he should be a party to the reference; and yet the moment he is made a party to the reference, the validity of the reference becomes a matter which can be challenged in a Civil Court, for it is only a dispute the parties to which are members or past members that can be referred to an arbitrator and the Civil Court would be entitled to determine whether that person was a member or not. So it comes to this that if you do make the person whose status as a member is in dispute a party to the arbitration, the arbitration is liable to be challenged on the ground of the status of that person and the Civil Court shall go into the status of that person. If you do not make that person a party to the reference, then because the dispute really relates to the business of the society and the question of status is only in dispute for that purpose, a reference would be valid.

8. Such were the reasons that impelled me to take the view I took in Nur Husain v. Muhammad Sultan. The learned Judges in Mubarak Din v. Registrar, Co‑operative Societies did not, unfortunately, refer to what was the real reason of my decision, i.e., the clash between the Civil Court's decision and that of the arbitrator. However, although I have stated all the reasons for which I had decided in favour of the questions of status being excluded from the jurisdiction of the arbitrator, I would not refer this case to a Full Bench. Frankly, I have never felt strongly on this matter myself for it is just a question of taking a view of what is included in the word "business". My real reason was only as I have stated above and if another Division Bench of this Court does not regard this clash of jurisdiction as being in any way undesirable. I think I should waive my objection and agree with them. I would, however, make it absolutely clear that whenever the question of the jurisdiction of the Registrar to make a reference depends upon whether a person is or is not a member, the question can always be decided by a Civil Court.

9. As I have been discussing Mubarak Din v. Registrar, Co operative Societies, I would point out that the reference in Nur Husain v. Muhammad Sultan A I R 1938 Cal. 327 was just a slip. It was really A I R 1938 Cal.

394. On account of this slip the learned Judges had to say that that case really was not in point.

10. In the present case, the question as to whether Ahmad Saeed respondent is or is not a member truly arises out of the functioning of the society and, therefore, relates to the business of the society. At first sight, it would appear that the only question is whether he in fact sold the shares and, therefore, ceased to be a member. Ceasing to be a member would always be automatic and no question of business would be involved. On going a little further, however, we find that the matter is not so simple. A transfer of shares can take place only by a resolution of the managing committee and the same has then to be approved in the general meeting so that the question to be decided would be whether there was a valid resolution by the managing committee and whether a valid approval of the general meeting was obtained. These are matters relating to the business of the society, for they relate to the discharge of its functions.

11. As a result, I would dismiss this appeal with costs. MASUD AHMAD, J.‑I agree. A. H. Appeal dismissed.