P L D 1963 Azad J & K 72 (PLP)

Cannot be executed against person other than one against whom it was passed. M. Y. Cheema and A. K. Ansari for Decree‑holder. Abdul Majid Malik for Judgment‑debtor No.

2. The decree‑holder had applied that Raja Muhammad Afzal Khan and Lt.‑Col. Ghulam Rasool judgment‑debtors be imprisoned in the Civil Jail. Mr. Abdul Majid Malik put in objections on behalf of Raja Muhammad Afzal Khan on the last hearing. He had made out two points :‑ (1) that the Civil Court has no jurisdiction to execute the award of the arbitrator, (2) if it be held that the Civil Court can proceed in the matter of the execution of the award, the decree‑holder can proceed against the property of the society but cannot proceed against the members of the society individually or against their property. The Registrar of the Co‑operative Societies on being moved, that there was a dispute between the Central Co‑operative Bank Mirpur Limited on the one hand and the Industrial Co‑operative Union, Mirpur on the other appointed the Inspector of Co operative Societies, Bhimber, as an arbitrator by his order dated 31‑3‑1955. The arbitrator gave his award on 27‑2‑

59. The Azad J & K Government vide the Adaptation of Laws Act, adapted the Pakistan Co‑operative Societies Act (Act II of 1912) on 12‑1‑1959. The decree‑holder's contention is that the pro ceedings before this Court would be governed by the Pakistan Co‑operative Societies Act since the execution application was put in this Court on 18‑3‑1960 after the adaptation of the said Act, on 12‑1‑1959. Mr. Malik's contention on the other hand is that the execution proceedings would be governed by the Azad J & K Co‑operative Societies Act according to which the award can be executed by the Registrar, Co‑operative Societies or some other person appointed by him. Section 3 of the Azad J & K Adaptation of Laws Act provides :‑ "that all cases pending in Courts on the coming into force of this Act shall be tried and decided according to the provisions of the old law". Mr. Malik's stand is that the case was pending before the arbitrator on 12‑1‑1959 ; and that the arbitrator was a Court, and therefore, the execution of the award according to the provisions of the old law (Azad J & K Co‑operative Societies Act) can be made by the Registrar of the Co‑operative Societies or some other person appointed by him and not by the Civil Court. `Court' has been defined in section 3 of the Evidence Act to include all Judges and Magistrates and all persons, except arbitrators, legally authorised to take evidence. So it is clear from this definition that an arbitrator is not a Court. The case pending before the arbitrator on 12‑1‑59 cannot be said to have been pending in a Court. I accordingly hold that the execution proceedings would be governed by the newly adapted law i.e., the Pakistan Co‑operative Societies (Act II of 1912), according to which the award is to be executed by a Civil Court. As regards the second point, it has to be borne in mind that the Industrial Co‑operative Union, Mirpur has been incorporated under section 18 of the Co‑operative Societies Act. The effect of incorporating a number of persons into a body corporate is to make that body corporate a separate legal entity which is a legal, person just as much as any other individual and if a man trusts such corporation he trusts that legal person and must look to its assets for payments and he can only call upon individual members to contribute in case the Act so provides. Mr. Malik in support of his contention has cited A I R 1931 Pat. 321, a Full Bench case which is on all fours with the present case. It was held in this ruling that where some members of a co‑operative society of unlimited liability under section 4(2) incorporated under section 18, Co‑operative Societies Act, borrow money from Central Co‑operative Bank also incorporated under the same Act, through their society and ultimately the society becomes indebted to the Central Bank for the amount and the Central Bank obtains an award from the registrar having the effect of the decree, execution cannot be levied against the members but must be sought against the society itself and its assets. He has also cited A I R 1934 Mad. 181 (2) wherein it has been held that a decree against a Co‑operative Society as a corporate body cannot be executed against share‑holder or member by arrest and attach ment of his movable or immovable property. The individual liability does not arise until the state of winding up is reached. I may make it clear here that the liability of the members of the Industrial Co‑operative Union, Mirpur, is unlimited under section 4(2). Apart from the statute neither there is any liability of any individual member of the society nor is there any method by which judgment could be satisfied by execution against him. There is no provision in the Co‑operative Societies Act enabling the decree‑holder to proceed against the individual members. There is only one section in this Act bearing on this point and it is section

44. Section 44 allows the Government in cases where there are sums due to it from registered society or from an officer or member or past member to recover such sum, firstly, from the property of the society, secondly, in the case of a society of which the liability of the member is limited from the members subject to the limit of their liability, and, thirdly, in the case of other society from the members. This is an exception in favour of, the Government. If indeed, it is an exception in favour of the Government then the rule to which it is an exception must be contrary to the exception, the rule being that a creditor cannot recover from a member of the Society. Mr. Cheema has referred to para. 15 of bye‑laws of the Mirpur Industrial Co‑operative Union, Mirpur which provides that for the discharge of the debt with the society has incurred for the purposes of the society, the liability of the members shall extend to 20 times the value of their shares. His contention is that the creditor can proceed against the members to the extent of 20 times their shares. Rules if they enlarge or modify the Act (which it cannot be held to have been done in this case) they would belt ultra vires. My opinion is that para. 15 of the bye‑laws would come into play only when the society is wound up. The bye‑laws regulate the business of the society and the liability of the members inter se or towards the Society. The decree‑holder cannot take advantage of para. 15 of the bye‑laws. Finally it is common sense and a rule of common laws that a' judgment against one person (and co‑operative society is a legally person) cannot be executed against another. A judgment or an award if it is to be executed under the Civil Procedure Code. Order XXI, rule 30 provides :‑ "Every decree may be executed by the detention in the civil prison of the judgment‑debtor or by the attachment and sale of his property." The judgment‑debtor in this case is the society and there is no method under the C. P. C. by which the judgment can be executed against any other person. As a result of the above discussion, I uphold Mr. Malik's objection that the decree‑holder cannot proceed against the person or property of the members but can proceed only against the assets of the society‑the judgment‑debtor. All warrants of attachment issued against the property of the members of the Industrial Co‑operative Union, Mirpur shall be withdrawn. K. B. A. Order accordingly.