1998 PLP 1850 (MLD)

5. The learned counsel for the petitioner has vehemently argued that the plaint was liable to be rejected as the mandatory provisions of Section 70 of the Co-operative Societies Act, 1925 were not duly complied with by the respondent/plaintiff and it was barred by limitation and therefore, the same was liable to be dismissed. He relied on M/s. National Fibres Ltd. v. Karachi Development Authority through Director-General Civic Centre, Karachi and another (1996 MLD 76) that the Court is possessed with inherent powers to reject the plaint at any stage under order VII rule 11 C.P.C. and also at interlocutory stage as envisaged in Asghar Ali v. P.K. Shahani and 2 others (1992 CLC 2282) and Abid Hassan Minto, Advocate v. Government of Pakistan (1987 CLC 1019). He also relied on Muhammad Ali Memorial Co-operative Housing Society Ltd., Karachi v. Syed Sibtey Hasan Kazmi (PLD 1975 Karachi 428) and that even the provisions of section 70 of the Co-operative Societies Act, 1925 are attracted to non-member.

6. I have heard the learned counsel for the Petitioner at length and have carefully perused all the judgments as well as the view expressed in Muhammad Ali Memorial Co-operative Housing Society Ltd. Karachi v. Syed Sibtey Hasan Kazmi (PLD 1975 Karachi 428) which was dissented in Muhammad Azim v. Pakistan Employees Co-operative Housing Society Ltd. Karachi and 4 others (PLD 1985 Karachi Page 481 and 527) and in Muhammad Siddique and others v. Shahah Din Etc. 1991 CLC note 247 at p.192.

7. There is no doubt that the Trial Court is possessed with inherent powers to peruse the plaint carrying the narration of facts as well as the allegations and can see even without an application that the averments in the plaint have disclosed a cause of action or they are not barred by any law. There are two stages for the same. One stage is when the plaint is filed in the Court and the Court suo motu finding that the suit being non-maintainable under Order VII rule 11 C.P.C. can reject the same in order to save the valuable time of the Court or when a written statement has been filed and issues are formulated, then the Court is bound to treat issues regarding the maintainability of the plaint as preliminary and after giving an opportunity of evidence to the parties may reject the plaint. This is the justiciable view by the Trial Court to reject the plaint.

8. In the instant case the suit filed by the plaintiff/respondent is a suit for specific performance to execute the sale-deed entered into between the respondent/plaintiff and the petitioner, Lahore Cantt, Co-operative Housing Society. Admittedly the plaintiff/respondent is not a member of the Co operative Housing Society. While reading section 54 with section 70 of the Co operative Societies Act, 1925 it is made clear that a person who cannot benefit under section 54 of the Co-operative Societies Act, 1925 for placing his dispute before the Registrar of the Society being non-member has the remedy to go and get his dispute decided by a Civil Court. The bare reading of section 54 shows that the provisions of section 54 is not intended to cover every dispute created by transaction that a society has. The dispute envisaged in section 54 must relate to some kind of transaction in which categories of persons mentioned in several clauses of section 54 have interested in that capacity. The provisions of section 54 are reproduced:- "

54. Arbitration: 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 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 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 in 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 actions laid down in paragraph 1 of this section. " This section has no application when the Defendants are not members of the society. So far as section 70 of the Co-operative Societies Act, 1925 is concerned it is reproduced below:- "

70. Notice necessary in suits: No suit shall be instituted against a society or any of its officers in respect of any act touching the business of the society until the expiration of two months next after notice in writing has been delivered to the Registrar, or left at his office, stating the cause of action, the name, description and place of residence of the plaintiff and the relief which he claims; and the plaint shall contain a statement that such notice has been so delivered or left."

9. The bare reading of this section shows that it comes into operation when a suit is instituted in respect of any act relating to the constitution, management or business of the society and the reason for requirement of service being mandatory is to give the Registrar an opportunity to examine and look into the claims against the societies and settle them without any litigation and from its face it shows that the provisions of section 70 are mandatory and failure to give notice as required by this section render the suit unsustainable.

10. Now the question whether these provisions apply to a member or a non member of the society. This section read with section 54 of the Co-operative Societies Act, 1925 makes it clear that it does not relate to a non-member. These provisions are exactly the same as envisaged in section 80 of the C.P.C. Registrar means a person appointed to perform the duties of the Registrar of the Co-operative Society under the Act and besides other powers under sections 4, 10, 14, 16, 22, 34, 42 43, 44, 44-B, 45, 47, 49, 50-A and 51 he can grant leave for civil suit or he can proceed other legal proceedings under section 151 C.P.C. and he can decide the matters referred to his arbitration under section 54 of the Co-operative Societies Act 1925. He can exercise the powers of a Civil Court under section 59(3) of the said Act. He has also other powers which are not relevant to be mentioned here. The words which are important .in section 70 of the Co-operative Societies Act are in respect of " any act touching the business of the society". Under section 5 of the Co-operative Societies Act, 1925 a society which has its object the promotion of the economic interests of its members in accordance with the co-operative principles or a society established and object of facilitating the operation of such a society, may be registered under this Act with or without limited liability. While contemplating the interpretation of section it is always seen that the general words should receive a general construction and it should be interpreted in a way that the construction does not leave to injustice. The bare perusal of sections 70, 5 and 54 of the Co-operative Societies Act, 1925 shows that it relates to the disputes of its members and it does not apply to a non-member in respect of all suits instituted against the society of any Act touching the business of the society.

11. In Muhammad Ali Memorial Co-operative Housing Society Ltd. Karachi v. Syed Sibtey Hasan Kazmi (PLD 1975 Karachi 428) the phrase "touching the business of the society" cannot be given so restricted a meaning as to exclude such sale. It should include all those acts which are necessary in the course of building of such houses and are consequent upon such building. This judgment relates to a dispute between the appellant as a Co-operative Society and the respondent was only a manager. The learned Civil Judge heard the suit and held that the suit was not maintainable for want of notice under section 70 of the Co-operative Societies Act and dismissed the suit and in appeal the learned District Judge, Karachi allowed the appeal and remanded the case for further hearing. This appeal was filed by the defendant against the appellant. The main question was that whether under section 70 of the Co-operative Societies Act for non-service of notice the suit was maintainable or not.

12. In the instant suit the reading of the replication filed by the plaintiff/respondent discloses that later on a notice was also served upon the petitioner, although, it was contended by the plaintiff/respondent that notice was not necessary as he was not a member of the society. In Karashiddayya Shiddayya Bennur v. Shree Gajanan Urban Co-operative Bank Limited and another (AIR 1943 Bombay 288) it was held that an award against the person who is not a member of the society is a nullity.

13. In Muhammad Ali Memorial Co-operative Housing Society Ltd., Karachi v. Syed Sibtey Hasan Kazmi (PLD 1975 Karachi 428) the learned Judge gave a finding that "I find myself in respectful agreement with the decision in all the three cases but I am unable to see how that affects the question. The award may, in proper proceedings, have to be found void and not enforceable but it does not follow that a suit for a declaration that the award is void, is therefore, maintainable without notice. The requirement of the section that a notice shall be given before a suit can be entertained is not possibly affected by the consideration that the plaintiff has in truth a good and even an answerable case. Even on the assumption that the award was void I am clearly of the opinion that the requirement of notice under section 70 still remains". This view was dissented in Muhammad Siddique Etc. v. Shahab Din Etc. (1991 CLC Note 247 at p.192), where it was held that notice of suit against Co-operative Society by non-members who cannot move under section 54 would not be necessary. The view taken in Muhammad Azim v. Pakistan Employees Co-operative Housing Society Ltd. Karachi and 4 others (PLD 1985 Karachi 481) is relied, where it was held that under sections 54 and 70 of the Co-operative Societies (Act VII 1925), two provisions are complimentary. Section 54 is not intended to cover every dispute created by transactions that a society has. The dispute envisaged in section 54 must relate to some kind of transaction in which categories of persons mentioned in several clauses of section 54 have interest in that capacity. It was further held that transaction of a contractual nature entered into by Society with an outsider. The outsider is beyond scope of Society. The jurisdiction of Civil Court is barred only in such cases which have to be decided by statutory functionaries under Act by virtue of provisions of Act or Rules or Bye-Laws framed thereunder. Section 70-A does not bar jurisdiction of Civil Court if dispute could not be referred under section 54 to arbitration.. The suit by an outsider against society therefore, was not barred.

14. Now the question how and when the plaint can be rejected. The plaint can be rejected on the premises that it does not disclose a cause of action and also it is barred by law. Since the notice required under section 70 of the Co operative Societies Act, 1925 does not apply to a non-member and the suit filed by the non-member of the society is a suit for specific performance of execution of the sale-deed in respect of the disputed property therefore, the view taken by the learned trial Court that the plaint does disclose a cause of action and also is not barred by any law is unexceptionable and cannot be interfered in the instant revision petition. The same is dismissed in limine. H.B.T./L-27/L Revision dismissed.