P L D 1957 (W (PLP)

RAHMAN, C. J.‑

The petitioner, Mian Mubarik Din, seeks an appropriate writ against the Registrar, Co‑operative Societies, West Pakistan, Lahore, and other respondents in the following circumstances. The petitioner and respon dents 4 and 5, Sayyed Ashoor Kazmi and Dr. S. M. Akhtar, are members of the Co‑operative Model Town Society Limited, Lahore. They along with three other members, Abdul Humid, Feroze Din and Dr. Abdur Razzaq, were candidates for election to the Managing Committee of the Society in respect of two seats assigned to special interests as provided by bye‑law 46 of the Society. The election was held on the 3rd of March 1957 and according to the, result announced by the Chairman, the petitioner and respondent 5 were declared to be duly elected as they had received the greatest and the second greatest number of votes. Respon dent 4, Sayyed Ashoor Kazmi, challenged tire validity of the election by means of an application presented to the Registrar, Co‑operative Societies, West Pakistan, under bye‑law 28 (v) read with other bye‑laws, but he impleaded the petitioner alone as a party. He pointed out that the votes had not been properly counted or scrutinized and if a proper recounting were made, he would be found entitled to be elected in preference to the petitioner. Respondent I, by order dated the 28th of March 1957, referred the dispute for arbitration to respondent 2 under bye‑law 18 of the Society. By that very order, respondent 1 directed that pending the decision of the dispute by the arbitrator, the petitioner should not function as a member of the Managing Committee. This order has been challenged as illegal, ultra vires of the Registrar and inoperative and it is prayed that the impugned order be quashed on a writ of certiorari and a writ of mandamus be issued directing respondents 1 to 3 to abstain from implementing or enforcing the said order either by proceeding with the reference to arbitration or by interfering in any manner in the exercise of the petitioner's rights as a member of the Managing Committee of the Society. Mr. Shaukat Ali Malik who appeared for the petitioner invited our attention to rule 18 framed under section 43 of Co‑operative Societies Act, 1912, which, so far as material, reads as follows :‑‑ 18 (a) "Any dispute concerning ‑ the business of a co operative society between members or past members of the society or persons claiming through them or between a member or past member or persons so claiming and the committee or any officer, shall be referred to the Registrar, Reference may be made by the committee or by the society by resolution in general meeting or by any party to the dispute or if the dispute concerns a sum due from a member of the committee to the society, by any member of the society. (b) The Registrar may either decide the dispute himself, or appoint an arbitrator, or refer the dispute to three arbitrators, of whom one shall be, nominated by each of the parties and the third shall be nominated by the Registrar and shall act as Chairman." It was contended by learned counsel that the kind of dispute that arose in the present case could not have been referred to arbitration under this rule as it did not touch the "business" of the co‑operative society. Reliance was in this connection placed on a Division Bench judgment of this Court reported as Nur Husain v. Muhammad Sultan (P L D 1956 Lah, 893). The learned Judges who decided that case held that the intention of rule 18 was clear that a dispute covered by that rule could be adjudicated upon solely in the manner provided therein, and jurisdiction of civil Courts over that matter was necessarily excluded. In that case, however, in the opinion of the learned judges, the question involved was one of status of a person as to whether he was or was not a member of the society, and although the learned judges were inclined to interpret the word "business" in a wide sense, they decided that the question was not covered by that term occurring in rule 18 and the jurisdiction of the civil Courts to determine the question was, therefore, not barred. The dispute in that case related to the election of a Managing Committee of the Hafizabad Co‑operative Transport Society. Inter alia, the election of the Managing Committee was impeached on the ground that the meeting was presided over by a person who was not entitled to do so and that five of the defendants were not members of the Society at all and were thus not entitled to vote. Objection was also taken to another defendant's capacity to vote on the ground of his minority. The view taken in this ruling was sought to be supported by the learned judges by reference to two cases published as Dacca Co‑operative Industrial Union Ltd. v. Dacca Co‑operative Sankhya Silpa Samity Ltd. (A I R 1938 Cal. 327) and Dr. Savitri Bai v. Gutti Thotappa (A I R 1951 Mad. 425). It appears to us that it was wrongly assumed that the Calcutta case cited above involved any question of the legal constitution of a co‑operative society. In that case the appellant was a union of which the eight respondent Societies were share‑holders. Certain goods were sold by the appellant union to the share‑holder societies, namely, the respondents, on credit. The respondents defaulted in paying their outstanding dues and a dispute arose between them and the appellant union. The respondents claimed that the union had failed to pay dividends on the shares held by them. All that was held in that case, therefore was that the expression "concerning" the business of a society occurring in section 43 (2) (1) of the Co‑operative Societies Act, 1912. and in rule 22 (1) framed thereunder, could not be limited to disputes concerning the internal management of and that the principal business of a society being to finance its members, a dispute concerning the financial obligations of its members to the society would be a dispute concerning the business of the society. No question of election or constitution of the society arose in that case. In the Madras case cited above, it was ruled by a Single Bench of the Madras High Court that a dispute relating to the dismissal of the President of the Society from the office of president ship could not' be said to be one touching the business of the society so as to fall outside the scope of jurisdiction of a civil Court's jurisdiction. The plaintiff‑respondent had sued for a declaration that the resolution of the Managing Body, by which he was removed from the president ship of the society and the first defendant was substituted as President instead, was illegal, unconstitu tional and ultra vires of the powers of the directors and for a permanent injunction restraining the first defendant from taking charge as President. It was pointed out by the learned Judge that though there was bye‑law 20 of the society in question, providing for the removal of a member of the Board of Directors, there was no corresponding provision for the removal of a president from his office by a resolution of the Managing Committee. The argument could not, therefore, be advanced that because there was a definite rule on the subject, the question should be regarded as included within the term "business of the society". On the contrary, it was found that in the absence of any power given by the bye‑laws for the removal of a president during his term of office, by means of a majority resolution of the Board of management, the resolution in question was of no effect and further that even if bye‑law 20 could be so construed as to include a reference to the election of the Board of management, the power of removal vested in the general body and not the directorate and, consequently, the action of the Board of management was in contravention of the bye‑laws. The circumstances of that case, therefore, were distinguishable and in our opinion, not much assistance could be derived from that authority for the view taken by the Division Bench of this Court in the case referred to above. There are two specific authorities which have taken the contrary view. A Division Bench of the Allahabad High Court in Gopi Nath v. Ram Nath (A I R 1925 All. 356), observed that having regard to the very wide form in which section 43 and the rules made thereunder were couched, it should be held that the word "business" was not intended to be confined to money business and that the election of the officers of a Co‑operative Society was certainly a part of the "business" of the Society and the intention of the Act was that this and any dispute of a similar character should be referred for the decision of the Registrar or the arbitrator appointed by him in accordance with the statutory rules and not to the Civil Court. Again, in District Co‑operative Society Ltd. Manai v. Khem Chand (A I R 1954 Him. P 63), the Judicial Commissioner of the Himachal Pardesh adopted the Allahabed view and held that where certain members of a co‑operative society sue for a declaration that the proceedings of the annual general meeting and their removal from membership, were illegal and mala fide and that they still continued as members of the society, the dispute was covered by rule 18 (a) and the suit is not maintainable in the Civil Court. With all deference for the opinion expressed in Nur Husain v. Muhammad Sultan, we are not inclined to accede to the broad proposition that all questions of status as members or office‑holders of a Co‑operative Society would be taken out of the purview of rule 18 on the ground that they related to questions of status. The correct approach in our humble judgment would be to consider whether the dispute raised in any particular case concerned the "business" of the co‑operative society or not. If it did, the rule would cover it and impliedly the jurisdiction of the Civil Courts to adjudicate upon the question would be barred. In the present case, the dispute was one relating to the election of two members representing special interests to the Managing Committee of the Society and we have no doubt in our minds that this was a question touching the "business" of the Co operative Society. The word "business" must receive a liberal interpretation and is not confined to money transactions. Ample authority exists in support of that view. Reference may, inter alia, be made to The Zamindara Bank v. Suba (A I R 1924 Lah. 418), and Dasaratha Row v. Subba Rao Pantulu (A I R 1923 Mad. 481). Any narrow interpretation of this term would defeat the very object of the Act and the rules made thereunder. The legislature appears to have been anxious to save Co‑operative Societies and their members from the bazards of prolonged litigation in civil Courts and to relegate their disputes to domestic forums provided for in the rules. Rules 15 to 18 of the Election Rules of the Society lay down a definite procedure for the election of representatives from different blocks of the Society. This lends support to the argument that 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 had jurisdiction to refer it to arbitration. We have been unable to discover under what provision of law the Registrar debarred the petitioner from attending meetings of the Managing Committee pending the resolution of the dispute that had been raised by one of the respondents. Bye‑law 28 (v) of the Co‑operative Model Town Society' Limited, did give power to the Registrar, for stated reasons, to suspend the execution of any resolution or order of the! Managing Committee or the General Meeting of the Society, but this is not the effect of the order passed by the Registrar. He has not suspended any resolution of the Society. He has merely debarred the present petitioner from functioning as an elected member of the Managing Committee by an ex parte order passed without hearing him and without going into the merits of the case. The order in question offends the principles of natural justice and it cannot, in any case, be sustained. It would have been desirable for the Registrar to F have called the petitioner before him when the respondent raised the dispute by his petition, as in that case the petitioner might have been able to convince the Registrar that instead of referring the dispute to arbitration, he should decide it himself, and further, he would have brought it to his notice that no complete decision of the dispute could take place in the absence of other candidates who had stood at the election. It is obvious that any adjudication between the relative con tentions of respondent 4 and the petitioner, could not settle the question as to who should be regarded as duly elected members of the Managing Committee in respect of the two relevant seats. It was necessary to implead the other successful candidate and also the other unsuccessful candidates so that the whole dispute could be firmly and completely resolved. The matter being one which concerned merely the scrutiny and counting of votes, perhaps it would be preferable for the Registrar to decide the dispute himself, but of course he has a discretion in the matter and can, in the alternative, refer the dispute to arbitration under the rule cited. The Registrar had to act in a quasi judicial manner in this case. We, therefore, set aside the order passed by him as erroneous in law and direct that he should now call all the relevant parties before him and then decide whether he would adjudicate on the dispute himself or refer it to arbitration. Mean while the petitioner shall not be debarred from functioning as a member of the Managing Committee and we prohibit the respondents from interfering with his right in that connection till such time as he is removed from his office by due process of law. In the circumstances of the case, we make no order as to costs. A. H. Order accordingly