1989 PLP 4250 (MLD)

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54. Arbitration 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) . . . . . . . . . . (b) . . . . . . . . . . (c) between the society or its committee, and any past or present member of the society, or (d) . . . . . . . . . . (c) . . . . . . . . . . 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 complicated question 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. "Section 70-A(1) Notwithstanding anything provided in any other law an for the time being in force, but save as expressly provided in this Act-- (a) No Court or other authority whatsoever shall have jurisdiction to entertain, or to adjudicate upon, any matter which the Provincial Government, the Registrar or his nominee, any arbitrator or liquidator. a Society, a financing bank, a Cooperative bank or any other person as empowered by or under this Act, or the rules or bye-laws framed thereunder, to dispose of or to determine; (b) the validity of anything done or an order passed by the Provincial Government, a society, a financing bank, a Cooperative Bank, the registrar or any other person referred to in clause (a) under this Act or the rules and bye-laws framed thereunder, shall not be called in question in any manner whatever before or by any Court or other authority whatsoever; and (c) no Court or other authority whatsoever shall be competent to grant any injunction or pass any other order in relation to any proceedings under this Act or any rules or bye-laws framed thereunder before the Provincial Government, a society, a financing bank, a Co-operative bank the Registrar or any other person referred to in clause (a , (2) The provisions of subsection (1) shall be applicable o proceedings, appeals and revisions pending adjudication or disposal before or in any Court or other, authority whatsoever on the date that the Co operative Societies (Amendment) Ordinance, 1966, comes into force, and any order passed in such proceedings, whether before or after the coming into force of the said Ordinance, m regard to matters referred to in subsection (1), shall stand vacated and be without any force." It was, therefore, pointed out by the learned counsel for the defendant No.4, M/s. Khalilur Rehman and Habibullah Jatoi, that as per averments made in the plaint; (i) the plaintiffs are original members of defendant No.4; (ii) there is a dispute touching the business of defendant No.4; (iii) the dispute pertains to participation in elections of defendant No.4 and (iv) the dispute is between the society (defendant No.4) and present/past members of the society. Hence the presence of these elements at once brings the case with the purview of section 54 of the Act and ousts the jurisdiction of the Court under section 70-A of the Act. According to the learned counsel for the defendants the plaintiffs as per their own averments are said to be members of the Society (Defendant No.4), there is a dispute between them and the society, and the only question which requires adjudication is whether elections of-the society touches the business of the society (defendant No.4) or not. In support of their contention they referred to me three decisions of our High Courts, namely, Sind Baluchistan Provincial Co-operative Bank Limited, Karachi v. Dilawar Khan and another reported in PLD 1970 Kar. 200, Mubarik Din v. Registrar Co-operative Societies, West Pakistan reported in PLD 1957 (WP) Lah. 1013, and Lyallpur Co-operative Transport Society Limited v. Zamindar Transport Co. Limited reported in PLD 1958 (WP) Lah. 1026. In the first named case it was held:-- "A dispute about elections touches the business of a co-operative society which means in other words that section 54 of the Co-operative Societies Act is applicable to such disputes. This being, so, the Registrar has the jurisdiction to deal with those matters and jurisdiction of Civil Courts is barred." Earlier Lahore High Court while interpreting rule 18(a) of the Co operative Societies Rules in Mubarik Din v. Registrar Co-operative Societies West Pakistan reported in PLD 1957 (W.P.) Lah. 1013 held as follows: "Elections form part of the business of the Society. We, therefore, consider that the dispute in the present case fell within the purview of rule 18 and the Registrar has jurisdiction to refer it to arbitration." Lastly, learned counsel for the defendants referred to me the case of Lyallpur Co-operative Transport Society Ltd. v. Zamindara Transport Co. Limited reported in PLD 1958 (WP) Lah. 1026, wherein it was held as follows:-- " the effect of this rule considered alongwith the scope of the Co-operative Societies Act, is to exclude the jurisdiction of the Civil Court in a matter which under this rule is to be referred to arbitration. If, therefore, the matter is one on which a reference could be made under this rule, the jurisdiction of the Civil Courts to determine that matter will be barred. However, there are two conditions for reference to arbitration under this rule. The first is that the dispute should be about the business of the Society. These two are essential conditions of a reference and the absence of either of them would vitiate the reference." Learned counsel for the plaintiffs urged before me that from the perusal of the contents of the plaint it will be clear that the acts and omissions on the part of the defendants were arbitrary, unlawful and without jurisdiction and hence in spite of the bar to file the suit, the Court has inherent jurisdiction to entertain the suit. My attention was invited to various paragraphs of the plaint wherein it was alleged that the defendants had been acting with ulterior and designed motives aiming at ousting the plaintiffs from taking part in the elections of defendant No-4. The plaintiffs were unable to satisfy me as to what prevented them from invoking arbitration proceedings as envisaged under section 54 of the Co-operative Societies Act, 1925. Learned counsel for plaintiffs took pains to refer to number of Court decisions in support of their case but were unable to satisfy me that the above three reported cases were not applicable to the facts of the case. Admittedly, from the averments made in the plaint, the plaintiffs are members of defendant No.4, the dispute pertains to exclusion of their name from the new list of members as a result whereof they were denied participation at the elections of the defendant No.4. Hence their case clearly falls under section 54 of the Co-operative Societies Act, 1925 and ousts the jurisdiction of Courts b virtue of section 70-A thereof. As a result I reject the plaint under the provision of Order 7, rule 11, CPC. AA./S-412/K Plaint rejected.