1969 PLP 679 (SCMR)

Date of hearing : 9th June 1969. MUHAMMAD YAQUB ALI, J.‑The appellant is an ex‑member of the State Co‑operative Development Corporation, Lahore, hereinafter referred to as the Corporation, which was under the order of the Deputy Registrar dated the 27th September 1955,dissolved and the respondent No. 1 appointed as its Liquidator. An appeal preferred by the appellant and other members of the Corporation from the order of dissolution was dismissed by the Provincial Government on the 27th February 1957, both on merits and as barred by time. On the 19th October 1963, the Liquidator having carefully assessed the assets and liabilities of the Corporation issued notices to all the members of the Corporation including the appellant herein to contribute towards the loss suffered by the Corporation equal to five times their respective share capital as provided in the bye‑laws. Consequent upon it the appellant on the 7th November 1963, instituted a civil suit in the Court of a local Civil Judge for a declaration on his behalf and on behalf of the other members of the Corporation that the order passed by the Deputy Registrar cancelling the registration of the Corporation was illegal void, without jurisdic tion, null and void and has no legal effect and that the appeal filed by them before the Government should be deemed to be still pending disposal, etc. and for a permanent injunction restraining the respondent No. 1 from enforcing contributions towards the loss suffered by the Corporation. An application under Order XXXLX, r. 1, C. P. C., was filed along with the plaint for an interim injunction which was rejected by the trial Judge, and an appeal preferred by the appellant in the High Court was dismissed by a learned Judge in limine on the finding that the balance of convenience did not lie in favour of the appellant nor was it shown that any irreparable loss will accrue to him if the temporary injunction asked for in the suit is not granted. Leave to appeal was granted on the 11th June 1964, to consider the pleas that "(1) the liquidator has not first made a true assessment of the assets and liabilities of the Bank, to ascertain haw much of contribution is required ; (2) the liquidator, in fixing the contribution has exceeded the legal limits of the liability of these shareholders to contribute ; and (3) the liquidator has taken account of time‑barred debts, which he may meet, if there be a surplus for distribution, but which he cannot in law, charge upon the shareholders." Perusal of the record shows that on 18‑7‑1963 the Liquidator prepared a detailed statement taking into account all assets and liabilities of the Corporation which resulted in a net loss of Rs. 3,52,797‑7‑

6. An order under section 42 read with Rule 26 of the Co‑operative Societies Act was, therefore, passed for contribution of Rs. 2,50,360 by the members at five times of their individual share capital in the Corporation. The account was checked by the Inspector of Co‑operative Societies on the 28th August 1963, and forwarded to the Registrar for approval of the order of contribution on 28th August 1953. The statement and the order of contribution were at first examined by the Assistant Registrar and then approved by the Registrar on the 26th September 1963. Thereupon the liquidator issued individual notices to the members of the Corporation to make contributions as entered in the Schedule to the Statement of Account prepared by him on 18th July 1963. The pleas : (i) that the Liquidator had not first made a true assessment of the assets and liabilities of the Corporation to ascertain 'how much of contribution is required; and (if) that the Liquidator in fixing the contribution has exceeded the legal limits of the liability of the share‑holders to contribute are thus factually incorrect. There is also nothing on the record to substantiate the third plea that the Liquidator had taken account of time barred debts. The learned counsel for the appellant had to admit that the period prescribed in the Limitation Act for a suit to challenge the legality of the order of the Deputy Registrar dated 27th September 1955, was under Article 170 six years. The period expired on the 27th September 1961, and even if limitation is reckoned from 27‑2‑1957 when the appeal preferred by the members of the Corporation was dismissed by the Provincial Government, the prescribed period of limitation ended on the 17th February 1963. The suit filed on the 17th November 1963, is thus ex facie barred by time. As the appointment of the Liquidator and the order of contribution made by him are only consequential in nature, the maintainability of the suit in regard to those orders is also in serious doubt. There is another insuperable hurdle in the way of the appel lant. The' suit is prima facie not competent in view of the bar contained in rule framed under section 43 of the Co‑operative Societies Act, 1912‑See the recent decision in the Gujranwala Central Co‑operative Bank Limited, Hafizabad v. Muhammad Feroze and others (P L D'1969 S C 252). The Liquidator in making the order of contribution acted under rule 26 and any dispute arising from that order is covered by rule 18 which inter alia provides that :‑ "Any , dispute concerning the business of a co‑operative society ,between members or post members of the society or any officer shall be referred to the Registrar. The Registrar. may either decide the dispute himself or appoint an arbitrator." The decision in Haji Muhammad Ibrahim and others v. Fateh Muhammad, Liquidator relied upon by the appellant is rather goes against his case as it is clearly stated therein that a suit will lie if the plaintiff makes an allegation that the liquidator has not reached the conclusion as to the assets and liabilities at all or on ground of mala fides. As seen in the present case the Liquidator has prepared a statement of account and determined the assets and liabilities of the Corporation. Nor is there any allegation of mala fides or gross negligence in the case. If the suit is on its face not maintainable, it follows that the appellant is not. entitled to a temporary injunction restraining the respondent No. 1 from enforcing the order of contribution during the pendency of the suit. The appeal is thus wholly devoid of force and is dismissed with costs. The ad interim injunction granted by this Court during the pendency of this appeal is vacated hereby. Appeal dismissed.