P L D 1959 (W (PLP)

WAHIDUDDIN, J.‑This petition for a writ of certiorari is directed against the order of the Chief Commissioner of Karachi passed in Appeal No. 21/57/REV, dated 4th November 1957 whereby the order of the Registrar of Co‑operative Societies regard ing plot No. 6/34‑H, dated 23rd September 1957 was set aside and the petitioner and respondent No. 1 are ordered to settle their dis putes about the said plot of land through arbitration proceedings in pursuance of the original order of the Registrar Co‑operative Societies under section 54 of the Bombay Co‑operative Socie ties Act. The Pakistan Employees Co‑operative Housing Society Ltd., respondent No. 2, was given a licence by the Government of Pakistan under an agreement dated 1st August 1951 for developing a piece of land measuring 957.3 acres bearing survey Nos. I to 6 in Survey Sheet No. 35/P‑1 situated at Karachi in order to construct residential buildings for its members. Under the terms of this agreement respondent No. 2 after developing the plots of land was permitted to allot them to its bona fide members in the manner approved by its managing committee and to authorise the allottees to enter upon the plot of land for the purposes of constructing buildings. The Government of Pakistan also agreed that after the completion of tile buildings on such plot of land the allottees shall be entitled to a lease for a period of 99 years. In pursuance of this scheme the petitioner was allotted on 28th October 1952 a plot of land bearing No. 6/34‑H‑1 measuring 2,000 square yards. The area of this plot of land was first increased on 14th December 1954 to 2,700 square yards and was further extended on 10th January 1957 to 3,105 square yards. Respondent No. 2 executed and registered a sub‑licence in favour of the petitioner in respect of the above‑mentioned area. On 22nd February 1957 respondent No. 2 executed a deed of rectification and got it registered whereby 550 square yards was further added to the above plot of land arid the area of the above plot of land was thus raised to 3,705 square yards. The petitioner made a total payment of Rs. 20,137 on different dates and it is admitted by the parties that he has paid full development charges according to the rules of the respondent No. 2 Society. On 9th April 1957 the Government of Pakistan in the name of the President executed and registered a 99 years' lease in favour of the petitioner. This document is signed on behalf of the Government of Pakistan by Mr. A. A. Chowdhury, Under Secretary to the Government of Pakistan and on behalf of respon dent No. 2 Society by Mr. S. M. Ishaque, Mr. Kamaluddin Ansari and Mr. M. A. Aziz Khan members of its managing committee. The document on behalf of the petitioner was signed by his attorney Mr. Abdul Qaiyum. On 6‑3‑1957 the Managing Committee of respondent No. Z Society allotted 1,705 square yards out of the above‑mentioned plot of land to Mr. Aziz Ahmed, Secretary, Ministry of Commerce, respondent No.

1. On 25th June 1957 the Secretary of respondent No. 2 Society addressed a letter to the petitioner informing him that he was allotted an area of 2,000 square yards only, that the staff of the Society without any authority increased its area and his claim to additional area is entirely unauthorized, that an addi tional area of 1,705 square yards out of the total area of 3,705 square yards is actually a wholesome plot of land and has been allotted to respondent No.

1. The petitioner repudiated the claim of the Society and claimed that the plot in question has been duly allotted to him, that he has taken over the possession of the land and has raised construction over it and that the Government of Pakistan has already acted on it and executed and registered a lease deed for 99 years in his favour. Copy of this letter was also forwarded to Mr. Aziz Ahmed respondent No.

1. This led respondent No. 1 to approach the Registrar, Co operative Societies, respondent No. 4, under section 54 of the Bombay Co‑operative Societies Act, since both the parties were members of the P. E. C. H. Society, for referring the dispute in respect of the allotment of the plot in question to arbitration. Respondent No. 4 admitted the dispute for arbitration and nomi nated Mr. S. H. Qureshi as Registrar's nominee for deciding the dispute between the parties by an order dated 19th August 1957. He also issued a stay order prohibiting construction, execution of lease and to do‑any other act likely to injure the plot in dispute. The Registrar's nominee issued notice to the parties on 28th August 1957 for the hearing of the matter on 16th September 1957. On 7th September 1957 Mr. Mohsin Siddiqui Advocate for the peti tioner addressed a letter to respondent No. I and respondents No. 4 and No. 5 stating inter alia that the Society had no authority to make any allotment of any land which it did not hold and of which a valid lease has already been registered on behalf of the President of Pakistan, that no dispute between the parties within the meaning of section 54 of the Bombay Co‑operative Societies Act subsisted and the Registrar had no jurisdiction, to refer the matter to arbitration and to appoint a nominee to proceed with the matter. Respondent No. 4 thereupon called the papers from his nominee and after hearing the parties found that the dispute is between four parties, namely, Pakistan Employees Co‑operative Housing Society Ltd, Mr. S. H. Qureshi, President of Pakistan and Mr. Aziz Ahmed and as the President of Pakistan is one of the interested parties to the dispute section 54 of the Bombay Co operative Societies Act cannot be extended to include him as a party to the arbitration proceedings and therefore the dispute in question could not be referred to arbitration under section 54 of the Bombay Co‑operative Societies Act. He held that he had no jurisdiction in the matter and by an order dated 23rd September 1957 revoked his order referring the matter to the arbitration' of Mr. S. H. Qureshi respondent No.

5. It was in these circumstances that the matter was taken up in appeal by respondent No. 1 before the Chief Commissioner of Karachi and the learned Chief Commissioner after hearing the parties came to the following conclusion. The relevant portion of his order is reproduced below:‑ "I am afraid that I do not agree with the contentions of the learned Registrar. The point on which the dispute has arisen is restricted to three parties namely, the appellant, the respondent and the Pakistan Employees Co‑operative Housing Society‑all coming within the jurisdiction of S.

54. The dispute refers to the matter of allotment and not to the matter of lease. It is not necessary that the President should be made a party to the dispute. The action of the President in giving out the lease is conditioned by the question of allotment. Again the order by the Ministry of Works dated 6th July 1957, does not ipso facto cancel all the allotments made after the 30th March 1957 though it does expressly save "allotments made before that date." Further more, the appellant as a member of the Co‑operative Society could question the basis of allotment to another member even though the cancellation of the other member's allotment may not benefit him directly. In view of what has been stated above, I hold that the order passed by the learned Registrar on 23‑9‑1957 is untenable and I, therefore, direct that the arbitration proceed ings as originally started should be settled on merits." The petitioner challenged this order under Article 170 of the 1956 Constitution and prayed for a Writ of certiorari to quash the above‑mentioned order. He also prayed for a proper writ and directions and orders to nullify the effect of .the resolution of respondent No. 2 Society dated 25th June 1957 allotting a portion of the plot in dispute to respondent No.

1. At this stage it may be mentioned that there is no document on the record to show that respondent No. 2 or its Managing Committee ever considered the question whether the area of the plot of land allotted to the petitioner was increased without their permission or that the plot of land allotted to respondent No. 1 was carved out of the plot in possession of the petitioner. The resolution Exh. A 17 only shows that a plot bearing No. 6/34‑H‑2, measuring 1705, square yards was allotted to respondent No.

1. But the parties have admitted before us that this is not a new plot and is a portion of the plot in possession of the petitioner and the real dispute between the parties is whether the petitioner is entitled to retain this portion of the land with him. It will also be observed that the petitioner has attacked the above mentioned resolution on the ground that respondent No. 1 has obtained the allotment in his favour by unfair means and is trying to dispossess the petitioner by underhand tactics. These questions, however, cannot be decided in this petition. The scope of writ jurisdiction is very limited and if this had been the only controversy, before us, we would have refused to interfere in the matter. The short question therefore for decision in this case is whether section 54 of the Bombay Co‑operative Societies Act is applicable to the facts of the present case and whether the dispute between the parties is such as could be referred to arbitration. Mr. Zahural Haq the learned counsel for the petitioner has taken us through the entire record. The documents produced on the record show that originally the plot of land which was allotted to the petitioner consisted only of 2,000 square yards. Its area was gradually increased to 3,705 square yards, which is supported by several documents executed by respondent No. 2 in favour of the petitioner. The most important document executed in fovour of the petitioner is the lease deed for 99 years executed in the name of the President of Pakistan on behalf of the Government of Pakistan on 9th April 1957. Besides the petitioner and Government of Pakistan respondent No. 2 the Society is also a party to it. This document is signed on behalf of the Society by 3 members of the Managing Committee, including the Honorary Secretary, Mr. S. M. Ishaq. According to its terms the area of plot of land bearing No. 34‑H‑1 consists of 3,705 square yards and the petitioner is entitled to hold this land on payment of an annual rent of Rs. 231‑9‑0 to the Govern ment of Pakistan for a period of 99 years. Clause 5 of this lease shows that this plot of land cannot be sub‑divided or amalgamated with any other plot except with the previous consent in writing of the lessor, and subject to such terms as the lessor may from time to time impose. Clause 9 of this agree ment shows that the lease can only be forfeited if the lessee commits breach of any of its conditions or the declaration annexed to it turns out to be false. There is no other reservation in this respect in the lease deed. Mr. Zahural Haq the learned counsel for the petitioner has contended before us that the only document operative and binding between the petitioner, respondent No. 2 Society and the Government of Pakistan is the above mentioned lease deed, and that; the respondent No. 2 Society has no longer any power to sub divide the plot in dispute for allotment to a third party and cannot interfere with the petitioner's possession. The learned counsel contended that the lease can only be cancelled by the Government of Pakistan under clause (9) of the lease deed. According to him the question whether the allotment in favour of the petitioner was in respect of 2,000 square yards or for 3,705 square yards no longar subsists. The original allotment merged in the lease deed and respondent No. 2 Society is estopped in law to challenge its contents and is bound by its terms. If the Government of Pakistan or respondent No. 2 Society wants to get rid of it on grounds of fraud, they must proceed in a form where all the contracting parties will be represented and cannot resort to proceedings under section 54 of the Bombay Co‑operative Societies Act to which the Government of Pakistan will not be a party. Respondent No. I on the other hand has contended that the only dispute between the parties is about the allotment of the plot in dispute in favour of the petitioner and since the petitioner and respondent No. I are members of respon dent No. 2 Society this dispute can be referred under section 54 of the Bombay Co‑operative Societies Act. It is also contended on behalf of respondent No. 1 that the Registrar, having once exercised his power to refer the dispute between the parties to arbitration, has no jurisdiction to revoke it and that the order of the Chief Commissioner is perfectly valid and operative between the parties. After hearing the learned counsel for the parties we are of the opinion that this application must be allowed. Under the ordinary law no arbitration is effective unless and until all the parties interested in the dispute join the arbitration proceedings. Both under the English law and Indo‑Pakistan law if the arbitrator in deciding the dispute referred to him touches the interest of strangers, such action is considered to be in excess of his authority and the award is treated as void. Mookerji, J. in this connection in Soudamini v. Gopal Chandra Ghose (21 C L J 273) at page 278 observed as under:- "There is a further difficulty in the way of the enforcement of this award. It cannot be disputed that as a submission only refers to the arbitrator questions between the parties, the moment he touches the interest of strangers, he exceeds his authority and his award is void Turnder v. Swainson ( (1836) 1 M & W 572 : 46 R R 402); Alder v. Savill ( (1814) 5 Taunton 454 ; 15 R R 551) ; Lawis v. Rossiter (1875) 44 L J Exch. 136). The principle is well illustrated by the case of Ingram v. Milner ((1807) 8 East. 445). There, the arbitrator ordered some bankers, parties to the reference, to pay to the other party, the defendant, out of funds in their hands belonging to a firm of which the defendant was a member, a certains sum stated to be the amount of a debt due to the defendant from his partners, who were, however, not parties to the submission. It was ruled that the direction was void. In the case before us, the plaintiff and defendant are two of the legatees under the will, and the daughters of the testator, who are not parties to the submission, have a substantial interest in the estate. They are entitled to succeed in specified contingencies, and one of them was entitled to be married at the expense of the estate. They are in no way bound by this award. In these circum stances, it is impossible for the Court to enforce this award to the detriment of persons who are not parties thereto. This principle was also recognised in Ramchand v. Govind Ram (13 S L R 75). Another principle well settled under the ordinary law is that where in the suit a part of the controversy as raised by the plaintiff is not covered by the agreement to refer to arbitration and there is no averment in the application for stay of suit under section 34, Arbitration Act on behalf of the defendant that plaintiff's case is vexatious and frivolous, the Court will refuse to stay the suit and will not allow the plaintiff and some of the defendants to get their disputes settled by arbitration and leaving the case of the rest of the defendants to be decided by Court when the portion of the claim that cannot be dealt in arbi tration is not by any means small and insignificant See Turnock v. Sartoris ((1890) 43 Ch. D 150) and Sheodatt v. Prakash Distributors (A I R 1954 Nag. 289). Cotton, L. J. in (1890) 43 Ch. D 150 in this connection observed at page 156 as under :‑ "Then it was contended that at all events the question arising under the lease was the principal matter in dispute, and that it ought to be referred, leaving the action to proceed only as to matters not arising under the lease. I think that such a course would not be right. It cannot be right to cut up this litigation into two actions, one to be tried before the arbitrator, and the other to be tried elsewhere. Even if the arbitration clause should be construed so as to include all matters in respect of which damages are claimed by the plaintiff, yet I should not think it right to refer the case to arbitration, because there are questions arising as to the construction of the agree ment and its effect on the provisions of the previous lease, and these questions would not come within the powers of the arbitrators. I think it would not be reasonable to refer the case to an arbitrator who could only deal with the questions arising under the lease, and would not be competent to deal with other questions which might arise under a reference referring to him all matters which are in difference between the parties. Whether or not it will be reasonable, when the plaintiff knows what the defence put in by the Defendants is, to refer the whole matter, is another question." But in the present case the decision of the question depends on the construction of section 54 of the Bombay Co‑operative Societies Act and it is to be seen whether these ordinary well settled principles have been departed under it. It reads as under:- "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 persons claiming through a member or 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 (1) 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 arbitra tion 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 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 I of this section." The language of this section shows that under it only those disputes can be referred to arbitration by the Registrar of Co operative Societies which are between the members of the Society and touch the business of the society. It also provides, that in certain cases disputes between the members of the society and third parties can also be referred to arbitration. An indica tion to this effect is in section 54, sub‑clauses (d) and (e) of the Bombay Co‑operative Societies Act. Although dispute is not defined but this section lays down that it includes the question whether a person is or was a member of the 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, It is quite obvious that a except in few apecific cases, those disputes alone can be referred to arbitration which are between the members of the society and which touch the business of the society. There is little doubt that the dispute between the parties touches the business of the society but it is hotly contested by the learned counsel for the petitioner that it is not exclusively confined to the members of the society and after the execution of the lease deed, Government of Pakistan is a necessary party for the effective decision of the dispute. It appears to us that there is insurmountable difficulty in the way of respondent No. 1 to cross this hurdle. There is much force in the argument of the learned counsel for the petitioner that the original allotment in favour of the petitioner or further documents extending the area of the plot in dispute do not stand alone. All these documents have merged in the lease deed. These documents no longer determine the rights of the petitioner in respect of the plot in dispute. In our opinion the allot ment has now merged in the lease deed executed on behalf of the Government of Pakistan. The legal position that emerges from this document is that the landlord has recognised the petitioner as the superior holder of the plot in dispute and the position of respondent No. 2 Society is no longer even of a licencee. Now the only right possessed by them is to recover further develop ment charges. In these circumstances there is no doubt in our minds that the lease deed is the only document which is operative between the parties and no other documents can be taken into consideration to extend its contents or to interpret its terms. We are supported in this view by a decision of the English Courts reported as Millbourn v. Lyons ((1914) 2 Ch. 231). The learned Master of the Rolls observed at page 240: "It is a mistake because, speaking generally, it is perfectly clear that when you have a conveyance which expresses the final concluded deliberate terms of the contract between the parties you cannot affect or alter that by reference to the antecedent contract". In another case Laggot v. Barret ((1880) 15 Ch. D. 306), Brett L. J. at page 311 also observed:- "I entirely agree with my Lord that where there is a prelim inary contract in words which is afterwards reduced into writing, or where there is a preliminary contract in writing which is afterwards reduced into a deed, the rights of the parties are governed in the first case entirely by the writing, and in the second case entirely by the deed ; and if there be any difference between the words and the written document in the first case, or between the written agreement and the deed in the other case, the rights of the parties are entirely governed by the superior document and by the governing part of that document." Mr. Brohi the learned counsel for respondent No. 1 however contended that there are certain recitals in the lease deed which are not correct and as these recitals refer to the dealings between the petitioner and respondent No. 2, they can be the subject‑matter of a separate reference. This contention is based on a mistaken view of the law. At best the case of the respondent No. 1 and No. 2 is that the lease deed was obtained by fraud and misrepresentation. Now, on whom was the fraud played ? Obviously on respondent No. 2 Society and Government of Pakistan. Mr. Brohi was unable to satisfy us that the question of fraud can be effectively decided in the absence of the Government of Pakistan. It is obvious to us that before any relief is claimed against the petitioner, the document shall have to be set aside and that cannot be done in a proceeding to which the Government of Pakistan is not a party. Now what is the relief claimed against the petitioner in the arbitration proceedings ? The answer is obvious that he had obtained the plot in dispute by fraud. Can such a dispute be treated as one between the petitioner, respondent No. I and respondent No. 2 alone ? There is no doubt that the answer to this question will be in the negative. The fraud, if at all proved, will be not only on respondent No. 2 Society but also on the Government of Pakistan and the dispute cannot be treated to be between the above‑mentioned parties alone. Under S. 54 of the Bombay Co‑operative Societies Act, two essential conditions must be fulfilled before its provisions can be invoked. The first is; that it should relate to a dispute which touches the business of the society and the second that such a dispute must be between: the Society or its members or between the members or past, members or those who claim through them. There is another class of cases which can also be referred and they are those which are mentioned in clauses (d) and (e), namely between the society and the surety of a member, whether he be a, member or not or between a financing bank and a person who is not a member of this society. The present dispute is not covered, by any of these conditions. After careful consideration of the matter we are satisfied that no power is given to the Registrar to settle dispute between members of a society and persons not members of it. The dispute in the present case is really between the petitioner, respondents Nos. 1 and 2 and the Government of Pakistan and in our opinion could not be referred to arbitration under section 54 of Bombay Co‑operative Societies Act. There is no doubt in our mind that the Registrar had no jurisdiction at all in the matter. On this view of the matter the conclusion of the learned Chief Commissioner that the dispute between the parties relates to the allotment of the plot of land and its area is not correct. The allotment order having merged in the lease deed, the right of the petitioner can only be decided on its basis. As long as the lease deed stands the question of allotment has no importance at all and cannot be separated to give jurisdiction to the Registrar to refer the matter to arbitration. It was contended by Mr. Brohi that the matter having once been referred to arbitration by the Registrar Co‑operative Societies he was no longer entitled to withdraw it and the order of the learned Registrar is without jurisdiction. We find no force in this contention. The Registrar referred the matter to arbitration under the Co‑operative Societies Act by an ex‑parte order. The peti tioner was entitled to approach the arbitrator and apprise him of the real facts. In such circumstances the Registrar was fully competent to hear the parties and decide whether the ex parte order was correct or not. This jurisdiction is already vested in him under S. 54 of the Bombay Co‑operative Societies Act. In our opinion the learned Registrar was perfectly entitled to act in this manner and we do not consider that he has in any way departed from the well established principle of revoking an order which is passed in the absence of a party. On the whole we are of the opinion that any arbitration pro ceeding between the petitioner and respondent No. 1 will be sheer waste of time. It will not conclusively determine the rights of the parties in respect of the plot in dispute. The Government of Pakistan will not be bound by such a decision. The lease deed in favour of the petitioner will not in any way be affected by any decision of the arbitrator. In such circumstances the award will be waste paper and in our opinion it cannot be attributed to the legislature that under S. 54, Bombay Co‑operative Societies Act, abortive arbitration proceedings are contemplated. The upshot of the above discussion is that the dispute between the parties is not confined to the question of allotment and really affects the lease deed. The Government of Pakistan is a necessary party to the dispute and as such the dispute is not covered by S. 54 of Bombay Co‑operative Societies Act. In our opinion the view taken by the learned Chief Commissioner, Karachi is not in keeping with the provisions of Bombay Co operative Societies Act and there is an error of law apparent on the face of record. We will therefore quash the order of the Chief Commissioner dated 4‑1 I‑57 and issue a writ of certiorari. For the reasons given above the petition is allowed with costs. A. H. Petition allowed.