1998 PLP 50 (CLC)

3. Admittedly, National Industrial Cooperative Finance Corporation Ltd. was a society registered under the Cooperative Societies Act, 1925. It had entered into various agreements of partnership with the petitioner by virtue of which they had agreed to form partnership for carrying out joint ventures for development of land. This fact is evidenced by 11 partnership deeds, between the parties, the execution of which is admitted. The Society was declared as an undersirable Cooperative Society under the Punjab Undesirable Co‑operative Societies (Dissolution) Act, 1993 and the respondent was appointed as its liquidator.

4. The petitioner was maintaining two accounts with the Society i.e. Accounts Nos.228 and 1340. Dispute arose between the petitioner and the Society regarding their rights and liabilities inter se. As already observed, the matter had come to this Court in Writ Petition No. 13936 of 1993 which was allowed on 13‑2‑1995 and the case was remanded to the respondent for decision afresh. The matter was considered by the Punjab Cooperative Board for Liquidation in its meeting held on 1‑7‑1996 when it worked out the liability of the petitioner at Rs.26,45,20,

764. The Board also proceeded to cancel the partnership agreements between the petitioner and the defunct Society. This decision has been assailed in this petition.

5. In support of this petition, Mr. S.M. Zafar, Advocate has raised the following contentions:‑‑‑ (i) That the partnership between the petitioner and the Society and the jural relationship arising therefrom could not have been unilaterally nullified by the Board nor could the patnership agreements be cancelled. (ii) That, in any case, the power under section 7 is dependent upon satisfaction that the agreements were mala fide and not in the interest of the Board and as in the present case no such finding was recorded by the Board, the cancellation of the agreements was violative of section 7 itself. (iii) That the Board has not only misread the record but has also failed to determine the real question arising before it.

6. In reply Mr. Muhammad Ilyas Khan, learned counsel for the respondent has apart from supporting the order of the Board on merits objected to the maintainability of this petition by arguing that the petitioner had failed to avail of the alternative remedy available to him under section 11 of the Cooperative Societies Act, 1925 and, as such, this petition is not maintainable. The learned counsel also pointed out that the cancellation of the agreements for partnership was proposed by the petitioner himself before the Board and as such no legitimate exception can be taken to the order of the Board.

7. Taking up the question of maintainability first, it is by now well‑settled that availability of alternative remedy does not oust the jurisdiction of this Court to entertain a Constitutional petition but is one of the factors to be taken into consideration for regulation of discretion of this Court. If the remedy provided by the Statute is equally efficacious and comprehensive, generally speaking the Court may refuse interference but there are certain well‑recognised exceptions to this general rule, one of which is that if the impugned order suffers from illegality or error on the face of the record it may be struck down. One of the earliest case to which reference may be made is the case of Nagina Silk Mill v. Income Tax Officer, Lyallpur (PLD 1963 SC 322) where an appeal was pending before the competent forum but yet the High Court interfered in the exercise of Constitutional jurisdiction. This case is important for another reason also as even under the Income‑tax Act, 1922 after the decision of the statutory appeal the aggrieved party had a right to go to the High Court by filing an application under section 66 of the Act and then taking the matter to the Supreme Court. However, notwithstanding this position it was ruled that as the impugned order suffered from illegality on the face of record it was liable to be struck down. Same view was reiterated in The Murree Brewery Co. Ltd. v. Pakistan (PLD 1972 SC 279). It is also to be seen that section 13 of the Act does not confer any right of appeal or revision upon aggrieved person. On the other hand, it envisages the filing of a representation before the Cooperative Judge. No right of hearing is also provided in the enactment. In this view of the matter the remedy provided by section 13 cannot be said to be equally efficacious. In Mst. Hussain Bibi v. Haji Muhammad Din and others (1976 SCMR 395) it was held that revision was not a remedy which can be considered as barring the maintainability of a Constitutional petition. In Abdul Hamid Khan Jatoi v. District Magistrate, Larkana and others (PLD 1973 Kar. 344) it was laid down that a provision for revision does not bar the invocation of Constitutional jurisdiction. Same view was taken in M/s. Azad Papers Ltd. v. Province of Sindh (PLD 1974 Kar. 81).

9. The two other considerations which have weighed with us in this behalf are firstly that this Court has already twice interfered by entertaining Writ Petitions Nos. 13936 of 1993 and 12554 of 1993) and secondly that the provision of the Co‑operative Societies itself have been declared ultra vires of the Constitution by a Full Bench of this Court though the matter is now pending before the Supreme Court of Pakistan.

10. So far as the merits are concerned, the execution of partnership agreements between the petitioner and the Society stands admitted. It cannot, therefore, be doubted that the relationship between the petitioner and the Society was that of partners. Prima facie, there is force in the contention of Mr. S.M. Zafar that this jural relationship could not have been put to an end or nullified unilaterally by the respondent by cancelling the agreements which had at least been partly acted upon by purchasing the land. It is unfortunate that this aspect of the matter was not considered by the respondent. Be that as it may, even if section 7 of the Cooperative Societies Act, 1925 was applicable to agreements of partnership also yet the agreements could only be cancelled if it was found by the Board that the agreements were mala fide and were detrimental to the interest of the Society. Again no finding on this aspect has been recorded by the Board.

11. The learned counsel for the respondent, however, emphasised that the petitioner did not contribute anything towards the partnership and as such he could not claim to be a partner. He has pointed out that according to clause (6) of the Partnership Agreement, the parties were required to make investment in equal proportion and in case of deficiency by one of the partners his share was to be reduced to that extent. According to Mr. Muhammad Ilyas Khan, Advocate, as no investment whatsoever was made by the petitioner he did not have any share in the partnership business.

12. Mr. S.M. Zafar, learned counsel for the petitioner, on the other hand denied this assertion of the learned counsel for the respondent and has stated that the petitioner had by obtaining loans contributed his share in the capital of the partnership. It was explained by the learned 'counsel that the petitioner had raised loans in his personal account which were credited to the partnership.

13. From the respective stands of the parties it is evident that the real question which arises for consideration was as to whether the petitioner had contributed towards the capital of the partnership and if so, to what extent. The source from which those funds were obtained was not of much significance. In these circumstances, the respondent‑Board was obliged to determine whether the amounts which had been debited to the personal account of the petitioner were utilised for the purpose of partnership business. This controversy is one of fact and should have been resolved by the Board after due consideration of the entire material on the record. We, however, find that no positive findings has again been recorded in this respect.

14. So far as the contention of Mr. Muhammad Ilyas Khan, that the petitioner himself has suggested the cancellation of the agreements, is concerned, it has been rightly explained by Mr. S.M. Zafar that what was submitted by the petitioner before the Board was that either partnership be allowed to continue or be taken to its logical conclusion or that the partnership be dissolved by restoring the parties to their original position which according to the learned counsel would mean distribution of assets of the partnership rateably. In view of what has been stated above, this petition is allowed, the impugned order is declared to be without any lawful authority and of no legal effect with the result that the matter shall be deemed to be pending before the respondent which shall proceed to decide it afresh in accordance with law. No order as to costs. A.A/G‑54/L Case remanded.