P L D 1952 Lahore 478 (PLP)

CORNELIUS, J.‑This is an appeal under Clause 10 of the Letters Patent of this Court, from a judgment of a learned Single Judge in Chambers, dismissing an appeal brought by the appellant, Anjuman kafait Shuari Qarza Bahmi, Chak No. 198 G. B. Lyallpur (to be referred to hereafter as " the Anjuman)" against Captain Niaz Ahmad and four other sons of one Ali Gohar; once a member of the Anjuman, who died on the 12th of June, 1941, owing a debt to the society. Several years later, the Anjuman referred the debt to the Registrar as required by rule 18 of the rules made under section 43 of the Co‑operative Societies Act, 1912. They apparently cited the sons of the deceased member as legal representatives. The. Registrar appointed one Mirza Nawab Din as arbitrator who, on the 14th of April 1945, made an award against the legal representatives [in favour of the Anjuman for payment of Rs. 604/14/6 and Rs. 9/6/‑ as costs out of the estate of Ali Gohar. The rule referred to above provides for an appeal from an arbitrator's award to the Registrar but it seems that no such appeal was attempted by the present respondents, who instead filed a civil suit for a declaration that the award was illegal, ultra vires and inopera tive. The Anjuman resisted the suit. The principal grounds ad vanced in support of the relief claimed were that the arbitrator had no jurisdiction to make an award against Ali Gohar's estate after the expiry of a year from the date of his death, reliance being placed on section 24 of the Co‑operative Societies Act; that the debt from Ali Gohar had become time‑barred before his death; that two of Ali Gohar's sons were minors and were not properly represented before the arbitrator; and that one of the sons, namely, Captain Niaz Ahmad had been serving under war conditions while the proceedings before the arbitrator were in progress and under the Indian Soldiers' (Litigation) Act, 1925, as then in force, the proceed ings should have been stayed against him. The Anjuman resisted the suit on the principal ground that in terms of rule 18 aforesaid, the award could not be called in question in a Civil Court except on the ground that the arbitrator had received a corrupt gratification, as to which there was no allegation. The Court held that section 24 of the Act had no application to the case but that the debt in question was time‑barred, and the award was vitiated by an error of law on its face since it allowed the debt. Reliance for the latter view was placed on a judgment of the Rangoon High Court published as U. Kyaw T ha v. Co‑operative Town Bank, Henzada A I R 1940 Rang.

157. It was further held that the minor plaintiffs had been properly represented before the arbitrator but that there had been contravention of the Indian Soldiers' (Litigation) Act in respect of Captain Niaz Ahmad. The suit having been dismissed, an appeal was taken before the District Judge, who set aside the finding relating to the appli cation of the Indian Soldiers' (Litigation) Act, but upheld the main finding viz., that the debt of Ali Gohar was time barred even in his life‑time and that this vitiated the award. As to the competence of a Civil Court to make a declaration invalidating the award, the learned District Judge referred to an obiter observation appearing in a judgment of this Court reported as Anjuman Dehi v. Kehar Singh A I R 1936 Lah. 901 The Anjuman then preferred a second appeal in this Court. The learned Single judge upheld the decisions reached by the Courts below, on one principal ground, namely, that the rule under which exclusive jurisdiction to deal with disputes concerning the business of a Co‑operative Society has been conferred upon the Registrar does not contemplate disputes between such a society and a dead person. The learned Single Judge considered certain provisions of the Act relating 'to the transfer of a deceased member's shares, and the rights of the society in relation to shares etc. belonging to a member or past member, in respect of debts due to the society, and held that the Act did not enable a society to proceed against the heirs or legal representatives of a deceased member to the extent of his property in their hands without resort to a Civil Court. Emphasis was also laid upon the fact that, as found by the Courts below, the claim was clearly barred by time when referred to the arbitrator. The learned judge granted a certificate to prefer an appeal and we have heard counsel on behalf of the appellant in this appeal. The decision of the learned Single judge is based upon a point of law, going to the jurisdiction of the arbitrator, and consequently affecting the jurisdiction of the Civil Court, which point does not appear to have been advanced in the trial Court or the first appellate Court. As a matter affecting jurisdiction, and there being no dispute as to the facts relevant to the point, the plea could be taken at any stage. The precise point does not appear to have received consideration in any previous case appearing in the Law Reports from the Indian High Courts. We are satisfied, on careful con sideration, that the view taken by the learned Single judge is correct and must be upheld. The ordinary rule regarding the survival of a cause of action for debt after the death of the debtor, is that such a claim which might have been enforced by suing the deceased debtor in his lifetime, is in like manner enforceable to the extent of assets, against the personal representative of such debtor. The question for consideration is whether such a debt, owed to a Co‑operative Society by one of its members, constitutes a dispute such as must, under the rules framed by the Provincial Government under section 43 (2) (1) of the Co‑operative Societies Act, be referred to the Registrar for decision, or, if he so directs, to arbitration. The clause above referred to specifies the disputes which must be referred in the following words :‑ " any dispute touching the business of a society between members or past members of the society or persons claim ing through a member or past member or between a member or past member or persons so claiming and the committee or any officer". By definition contained in clause (c) of section 2, the expression "member" is specified as including "a person joining in the application for registration of a society and a person admitted to membership after registration . . . . " Rule 18 of the relevant rules also specifies the disputes which must be referred, as required by the section, in the same terms as are employed in the clause. It is clear that these words, which have the effect of creating a special jurisdic tion for the settlement of such disputes, and of excluding to that extent the jurisdiction of the Civil Courts, must be strictly construed, for ouster of the jurisdiction of the Civil Courts is not to be lightly presumed. This principle is not prejudiced, in the facts and circumstances of the present case, by any considerations of advancement of the remedy provided by the Legislature under the clause of section 43 referred to above. The object of this provision obviously is to provide a cheap and expeditious mode of settlement of disputes affecting the business of Co‑operative Societies, not only as between the society and its members, past members, or persons claiming through them, but even as between members past members or claiming through them. The language employed in describing the persons raising rival claims certainly goes to support strongly the conclusion reached by the learned Single judge that it was not intended to extend to dead persons. In an action for debt, due from the deceased person, it would seem that the legal representatives impleaded as defendants, being limited in their defence to such pleas as might have been raised by the deceased debtor, can be held to claim under the latter, but this does not avail to bring a society's claim for a debt due by a deceased member within the provisions contained in section 43 (2) (1), or the rules there under. We are in entire agreement with the learned Single judge when he holds that a co‑operative society which has a claim for debt against a deceased member, must proceed for its recovery in the Civil Courts. Of the authorities cited before us, we propose to mention only four which are in point in relation to the facts, although the particular question dealt with above was not raised in any one of them. In some of these cases the decision has been based on an assumption which is contrary to the conclusion which we have reached. Narinjan v. Co‑operative Society A I R 1933 Lah. 376 is a decision by a learned Single judge of this Court in a case where a Co‑operative Society had, after the death of one of its members, referred the question of a debt due to it from such member to an arbitrator, who gave an award declaring that the widow and sons of the deceased, as well as certain sureties, were liable to pay a certain sum to the Society. An appeal to the Registrar having failed, a suit for a declaration was insti tuted on behalf of the son, who was a minor, seeking avoidance of the award on certain grounds. The suit having failed in the trial Court as well as in the first appellate Court on the ground that in the absence of proof of receipt of a corrupt gratification by the arbitrator, the Civil Courts had no jurisdiction, the minor came up to the High Court in second appeal but suc ceeded in obtaining relief to the extent that it was declared that the.4ward did not operate against him personally but only as representing the estate of his deceased father, to the extent of assets. The question whether, after the death of the debtor member, the dispute relating to his debts was such as could be referred under the relevant rules to arbitrators was neither raised nor touched upon in the judgment. Bharmakka v. Mallappa A I R 1926 Bom. 352 is a Division Bench judgment relating to an award obtained by a Co operative Society, against the sons of one of their members, who had died indebted to the Society, as well as certain other persons. One of these other persons sued the latter for a declaration that the award was not binding upon her, she being the widow of a brother of the deceased debtor. This plea had also been taken before the arbitrators, but had been overruled. No appeal had been brought, as provided by the special law, before the Registrar, and in the Bombay Province there was a rule laying down that if no appeal was brought against an award given under the Act, such an award would not be liable as between the parties, to be called in question in any Civil Court. The learned judges of the Bombay High Court upheld the decision of the Courts below that the rule operated to bar the suit, expressing themselves as follows :‑ "Once it is conceded that where a dispute lies between a Co‑operative Society and a member who is dead proceeding can be continued or entertained between the society and the legal representatives of the deceased debtor, the arbitrator would be competent to decide who were the legal representatives of the deceased debtor and would have jurisdiction to decide that question, even though they might come to a wrong conclusion." They went on to observe that the proper course for the plaintiff was to appeal to the Registrar where "the matter would have been set right". They were apparently satisfied that an injustice had been done to the plaintiff, and expressed the hope that the Registrar or the Local Government would redress her grievance. However that may be, it is clear from the quotation reproduced above that the Division Bench did not consider the precise question which has been raised in the present case. There can be no doubt, as has already been observed, that a Co‑operative Society has an action for debt due to it from a deceased member, which may be prosecuted against the latter's legal representatives. Speaking with res pect, it appears to us that no concession was necessary for reaching such a conclusion. The question, however, whether such an action must be pursued before the Registrar or an arbitrator under the provisions of this special Act, or could only be prosecuted in a Civil Court, was not raised before the Division Bench and consequently the decision furnishes no guide for resolution of the question before us. The other two cases are from the Patna High Court. In Mahabir v. Basudeo A I R 1925 Pat. 575 an award had been obtained by a Co‑operative Society against the sons of a mem ber who had died indebted to the Society. The sons sued only to avoid the personal decree which had been made against them, and having failed in the first appellate Court came up to the High Court in second appeal. Before the High Court, the point was taken that the sons, not being members of the Society, were strangers, and consequently no award could be made to operate against them personally. This contention was upheld by the learned judges, who directed that the award, although in form an award against the plaintiffs perso nally, should have effect only as against the estate of their father in their hands. The judgment which is a brief one, contains no examination of the question whether a debt of a deceased member is referable to arbitration under the relevant law and rules, but it contains an observation on the point to the following effect:‑ "There is no doubt that the Co‑operative Society has complete power to refer any matter in dispute between them and the estate of a deceased member to the arbitration of the Registrar." This conclusion, speaking with respect, is both in form and in substance an assumption. Clause (l) of subsection (2) of sec tion 43 of the Act is cited in the judgment, but the learned judges do not appear to have considered whether "the estate of a deceased member" can be held to fall within any of the categories of " persons " comprised in the expression "members or past members of the Society or persons claiming through a member or past member". With due respect to their view, we think that these words cannot have any reference except to living persons. The second case from Patna is Sheosaran Singh v. Gaya Amla Co‑operative Society A I R 1939 Pat. 500 a Division Bench judgment in a case where four years after the death of a member, who had died indebted to the Society, a reference to arbitration was made and an award obtained against the son of the deceased debtor. From the statement of facts it appears that between the date of the debtor's death and the reference to arbitration, the son had made a payment towards principal and interest and had also become entitled to a dividend. The judgment shows that in argument learned counsel on behalf of the son contended that the Registrar had no jurisdiction over the son because it was the father and not the son who was a member of the society. It appears that eventually this point was not urged but instead, it was thought sufficient to obtain a declaration that the son's own interest in certain property of the family which had been sold in execution of the award could not be sold. The reference in the judgment to this part of the argument is contained in the following words :‑ "The next point that has been urged is that even assuming that the award could be passed, it was only in a representative capacity as an heir of Muralidhar and therefore the interest of Sheosaran could not be sold . . . . . . From the award it is clear that the award is not against Sheosaran personally, but as against him as representing the estate of his father, and the debt in respect of which the award has granted was a debt of the father." Here again, it would seem that the point of jurisdiction of an arbitrator in a case for the recovery of debt due from a de ceased member of a Society was not specifically considered but it was assumed that such jurisdiction existed. For the reasons already given, we uphold the decision of the learned Single judge and hereby dismiss this appeal with costs. A. H. Appeal dismissed.