1988 P Cr (PLP)

(2) This section shall apply notwithstanding that the act is one for which the offender may be criminally responsible.

6. From reading of subsection (2) of section 50‑A it will be clear that criminal prosecution is not barred, but is rather impliedly allowed and it is further provided that even when a person is criminally liable, Registrar has still power to assesst damage and order the restoration of the money or the property under subsection (1). It may also be pointed that this section is placed in Chapter VIII which deals in liquidation and alteration. In the instant case there are no liquidation proceedings against the Society.

7. Mr. Tilmiz Burney learned counsel for the respondents (Except respondents Nos. 6 and 9) has submitted that no prosecution could be instituted unless after holding the enquiry as provided under section 43 of the Act, the Registrar so orders. To appreciate the arguments of Mr. Tilmiz Burney it may be helpful to reproduce section 43 of the Act which is as follows:‑

"

43. Inquiry by Registrar.‑‑(1) The Registrar may of his own motion by himself or by a person duly authorised by him in writing in this behalf hold an inquiry into the constitution, working and financial condition of a society. (2) The Registrar shall hold such an inquiry as is contemplated in subsection (1) of this section‑‑ (a) on the requisition of society, duly authorised by rules made in this behalf to make such requisition, in respect of one of its members, such member being itself a society. (b) on the application of a majority of the Committee of the Society, (c) on the application of 1/3rd of the members of the society. (3) All officers and members of the society whose affairs are investigated shall furnish such information in their possession in regard to the affairs of the society as the Registrar or the person authorised by the Registrar may require. (4) The result of any inquiry under this section shall be communicated to the Society whose affairs have been investigated."

8. On the plain reading of section 43 of the Act it will be seen that in this section also there is no bar to the institution of the proceedings nor does it require the Registrar to institute criminal proceedings on the basis of such an inquiry.

9. Mr. Tilmiz Burner has also relied upon subsection (3) of section 63 of the Act and in support he has relied upon an unreported decision of this Court in Criminal Miscellaneous Application No. 1371 of 1985, In that case the applicant was challaned by the police before the City Magistrate, Karachi for the offences punishable under section 406/512/34, P.P.C. The learned Single Judge of this Court quashed the proceedings relying upon section 68(3) of the Co‑operative Societies Act and on the aforesaid case of Khanzada Hidayat Ali Khan, which I have already discussed.

10. Section 63 is placed in Chapter IX which deals with offences. Section 60 describes the offences under this Act. It mentions four offences which are described in subsections (a), (b), (c) and (d). It may be mentioned that criminal breach of trust by a public servant is not mentioned under section 60 of the Act and is not punishable under the Co‑operative Societies Act, 1925. Section 61 prescribes penalties for the offences described under section 60 of the Act. Section 63 of the Act deals with cognizance of cases. Under subsection (1) no Court inferior to that of a Magistrate of the first class shall try any offence under this Act. Under subsection (2) the offences under this Act shall be deemed to be non‑cognizable. Subsection (3) is material which is reproduced as under:‑

"(3) No prosecution under this Act shall be lodged without the previous sanction of the Registrar, which shall not be given except (after serving a notice on the party concerned and giving him a reasonable opportunity of being heard)." It may be noted that in all three subsections of section 63 words 'offence under this Act' are used. Same words are used in section 60 which describes offences under this Act.

11. In my humble opinion the restriction and restraints contained in section 63 of the Act would be applicable only to the prosecution of the offenders for the offences punishable under this Act viz. Co‑operative Societies Act and would not extend to the offences punishable under the Penal Code or under any other law.

12. Mr. Tilmiz Burney conceded that after the inquiry as contemplated under section 43 with the permission of the Registrar, the complainant could have filed the complainant with the Special Judge, who could then try the applicant for the said offences, as under section 55‑B of the Act the officers of the Societies are Public Servants within the meaning of section 61, P.P.C.

13. Mr. Syed Himayat Ali Prizada learned counsel appearing for the State submitted that. in the case of money awards by the Registrar or his nominee, on the certificate issued by the Registrar, the execution application is filed before the Civil Court. He, therefore, contends that on the same analogy the criminal prosecution could only be filed on the Certificate issued by the Registrar after holding inquiry under section 43 of the Act. He, however, was not able to point out any specific provision under the Act or Rules framed thereunder under which the Registrar could issue a certificate authorising prosecution. Section 59 of the Act deals with the procedure as to how the money, under order passed under section 50, 54 or 54‑A by the Registrar or his Nominee could be recovered. Under clause (a) to subsection (1) of section 59 of the Act this money could be recovered on the certificate issued by the Registrar or Liquidator, which would be deemed to be a decree of Civil Court and shall be executed in the same manner as a decree of such Court. Thus, the procedure for the recovery of the money awarded by the Registrar or his nominee is specifically provided under the Act. But as already pointed, there is no such procedure or bar provided before the institution of a criminal proceeding against an officer or member of the Society, except as contained in section 63 of the Act which only relates for prosecution of offences under the Act.

14. Mr. Tilmiz Burney learned counsel for the respondent further submitted that the respondents as officers of the Society acted in good faith and, therefore, section 43 and section 63(3) of the Act extended protection to him from unnecessary harassment and prosecution.

15. I have already discussed and held that no such protection is extended under these two sections of the Act. However, as a public servant, protection against the prosecution is extended under section 6(5) of the Pakistan Criminal Law Amendment Act, 1959 which requires that previous sanction of the appropriate Government shall be required for the prosecution of a public servant for an offence under this Act. However, in the instant case it is alleged that the respondents are ex‑members of the Society. In other words at the time of the institution of the complaint they were not public servants. As such in their case, as held in the case of Atta‑ur‑Rehman v. The State PLD 1967 SC 23 and Mohammad Abbas v. The State 1974 S C M R 445, it was not necessary for the Special Judge to refer the matter to the Government or any authority for sanction of the prosecution. The impugned order has not been passed on merits. Therefore, this Court cannot hold as to whether at the time of the institution of the complaint the respondents were public servants or not. If they were public servant then as required under proviso to subsection (5) of section 6 of the Pakistan Criminal Law (Amendment) Act, 1958, on receipt of complaint, the Special Judge shall immediately address the appropriate Government or authority for the sanction for the prosecution.

16. The position that emerges from the above discussion is that the respondents are alleged to have committed criminal breach of trust in respect of the funds of the society to the tune of more than Rs.29 lacs and enquiry on the complaint was held by the nominee of the Registrar, but no complaint has been lodged by the Registrar. I have already discussed the relevant provisions of the Co‑operative Societies Act. With due respect to the views expressed in the aforesaid cases of Khanzada Hidayat Ali and Criminal Miscellaneous Application No. 1371 of 1985, in my humble opinion there is no provision in the Co‑operative Societies Act which bars the institution of prosecution for criminal breach of trust or for any other offence not punishable under the Co‑operative Societies Act and no previous sanction of the Registrar is required for institution of the such prosecution. The view of the learned Special Judge that the complaint was not competent is not sustainable. However, he has not passed any orders on merits. The revision application is allowed. The impugned order is set aside and the case is remanded to the learned Special Judge to decide the question of issue of process on merits, keeping in view the observations made by this Court with regard to the procedure to be adopted, in case the respondents were public servants at the time of the institution of the complaint. M.Y.H./M‑359/K Case remanded.