1990 PLP 25 (MLD)

SALAHUDDIN MIRZA, J.--This appeal is directed against the order dated 25-5-1989 passed by learned .single Judge whereby plaint of the appellants/plaintiffs was rejected under Order 7Rule 11 CPC. The case of the appellants in their plaint was that they were (original) members of Rizwan Housing Society but in the latest list they were not shown as members and, a, a result, were not allowed to take part and contest the recent elections of the Society and they sought a declaration that they were entitled to take part and contest elections of the Society. Apart from filing written-statement, the Society (respondent No.4) filed two separate applications on different dates, both under Order 7 Rule 11 CPC. In the first (CMA No. 1850/89), it was prayed that the suit be dismissed and plaint rejected for the reasons given in the affidavit sworn b) Secretary of respondent No.4 in support of the application. In this affidavit, it was averred that the suit was barred under sections 54 and 70-A of the Co-operatic Societies Act, 1925. A similar prayer was made in the second application (C.iv1A. No. 2643/89). After analysing the dispute between the parties, learned Single Judge came to the conclusion that the dispute raised in the plaint fell undo section 54 of the Cooperative Societies Act, 1925, and, therefore, the jurisdiction of the Court was barred under section 70-A of the Cooperative Societies Act and he accordingly rejected the plaint under Order 7 Rule 11 C.P.C. Contention raised in this appeal is that the dispute pertained to the status of the appellants as members/membership-rights and, therefore, jurisdiction of the Court was not barred and that the word business' in Section 54 was misconstrued by the Court which included the dispute between the parties in the definition of business of Society' as used in section

54. Learned Counsel of the parties have been heard.

2. A perusal of the plaint shows that an unnecessary chronological narration of facts leading to the filing of the suit has been given. Similarly, the prayer sought is also a compound prayer. The gist of the averments made in the plaint is that the plaintiffs consider themselves to be members of Defendant No.4 Society and when they wanted to take part in its elections, they found that they were not listed as members and they want to be declared as members. The prayer clause in the plaint is misleading, confused and distorted because it asks for v declaration that the plaintiffs being the original members of defendant No. 4 are legally entitled to contest its elections. Now, as a matter of fact, any person who is an original member of defendant No.4, or even a subsequent member, is entitled to take part and contest its elections and this privilege is not confined to plaintiff alone. It is not the case of defendants, either, that the plaintiffs, even though they are members of defendant No.4, are still not entitled to take part and contest its elections. As revealed by the plaint, the stand of the defendants is that the plaintiffs are not members of defendant No.4. Under the circumstances, the talk of elections, whether in the body of the plaint or in the prayer clause, is superfluous. The only prayer which the plaintiffs could legitimately seek is a declaration that they are members of defendant No.4. Once this is settled, their right to take part in and contest elections of defendant No.4 stands guaranteed and cannot be questioned by anybody. As such, the whole dispute between the parties boils down to the determination of the status of the plaintiffs vis-a-vis defendant No.4, that is to say, to the determination of the question as to whether they are or are not members of defendant No.4 and the only question before us is as to whether this controversy about the plaintiffs being or not being members of defendant No.4 can be determined by a Civil Court or its jurisdiction is barred under any law and the plaint is, therefore, liable to rejection under Order 7 Rule 11, CPC.

3. Section 54 of the Cooperative Societies Act, 1925, provides that if any dispute touching the business of a (Cooperative) Society arises, it shall be referred to the Registrar for decision. The same section clarifies that a dispute shall include the question whether a person is or was a member of a society. As such, it would appear that such question is covered by section 54 and the jurisdiction of Civil Court is barred under Section 70-A of the Cooperative Societies Act, 1925. However the contention of the appellants/plaintiffs is that it is for the Civil Court to resolve this controversy and its jurisdiction is not barred. We were referred to para. 1 of the written-statement of defendant No.4, in which it was denied that the list of 400 members, on the basis of which the appellants claimed to be members, was prepared and authenticated by Registrar of Cooperative Societies and a reference was also made to para.4 of the affidavit of society of defendant No.4 in which it was stated that the plaintiffs being non -members had no cause of action and it was argued that in view of this denial, it was necessary to record evidence which necessitated the filing of civil suit. Learned counsel of the appellants/plaintiffs, however, ignored to note that neither the written statement nor the affidavit can be looked into while considering the question of rejection of plaint under Order 7 Rule 11 CPC.

4. It was further argued by learned counsel for the appellants that once the status of the appellants as members is challenged, they could not invoke section 54 of the Co-operative Societies Act, 1925, and any such move would be an exercise in futility and that if there was any controversy between the parties, the plaint could not be rejected.

5. Learned counsel for the appellants also relied upon PLD 1956 Lahore 893 (Mian Noor Hussain v. Khawaja Mohammad Sultan), PLD 1958 Lah. 1026 (Lyallpur Transport Co-operative Society v. Zamindar Transport Co.), PLD 1958 Lah. 1031 (Lyallpur Co-operative Transport Society v. Choudhri Saeed Ahmad), 1986 MLD 735 (Mohammad Aslam Siddiqi v. Mst. Hasina Begum, a case decided as long ago as 1958), AIR 1943 Bombay 288 (K.S. Bennur v. S.G. Urban Cooperative Bank Limited) and some others in support of his case. In the first judgment (PLD 1956 Lah. 893) it was held that dispute as to membership was not covered by the word "business" and that when the dispute pertains to the status of a person-- as to whether he was or was not a member of society the question was not covered by the phrase "business of a cooperative society" occurring in Rule 18 and, therefore, jurisdiction of Civil Courts was not barred. A similar view was held in the second judgment referred to above (PLD 1958 Lahore 1026) but this view is dissented from in PLD 1957 Lahore 1013 (Mian Mubarak Din v. Registrar, Cooperative Societies). In the MLD judgment referred to above, the rights of outsiders were protected and it was observed that if the arbitrator decided as to who was a member of the Society, it would mean that he could extend his powers and jurisdiction to any person and that there could be no arbitration between a member and non-member. In AIR 1943 Bombay 288 it was held that Registrar had no power to deal with and settle disputes between a society and a non-member.

6. However, we do not find ourselves in agreement with the counsel of the appellants. The Registrar or his nominee or the arbitrator may not have any jurisdiction to extend his jurisdiction to an outsider but it is not the case of the appellants that they are outsiders and non-members. If this were their case, they are out of the Court because they cannot claim to have any right to take part in and contest elections of defendant No.4. They cannot be suffered to blow hot and cold in one breath. Their case is that they are not only members but "Original members" of defendant No.4. On the basis of this assumption they can approach the Registrar under section 54 which specifically provides that "a dispute (touching the business of Society) shall include whether a person is or was a member of a society" and; therefore, jurisdiction of Civil Courts will be barred under section 70-A of Co-operative Societies Act.

7. Learned counsel for the appellants, after stating that rules had been framed under section 43 of the Cooperative Societies Act, 1912 and Rule 18 of the said rules was analogous to section 54 of Co-operative Societies Act 1925, had relied upon some of the judgments based upon the interpretation of Rule

18. However, learned A.A.-G. very rightly pointed out that there was a subtle difference between the two and that whereas Rule 18 is in respect of disputes concerning" the business of a Cooperative Society, Section 54 is in respect of disputes "touching" the business of such society and that section 54 is, therefore, more comprehensive than Rule 18, that, even if, a dispute does not concern', but nevertheless `touches', the business of a Co-operative Society, it comes within the ambit of section 54.

8. We also feel inclined to agree with the views expressed in the judgment of Gopinath v. Ram Nath (AIR 1925 Allahabad 356) which was relied upon by learned counsel of Defendant No.4/Respondent No.4. It was in respect of the old Act and the relevant portion is quoted below: "Having regard to the very wide form in which section 43 and rules made under it are couched, it should be held that the word "business" was not intended to be confined to money business. Election of its officers is certainly a part of business of the society and the intention of the Act is that such disputes should be referred for the decision of the Registrar or his nominee and not to the Civil Court.

9. Since the appellants feel aggrieved from the refusal of respondent No.4 to permit them to take part in the elections of the society, the above judgment is fully applicable to the facts of this case and ousts the jurisdiction of civil Courts.

10. For the reasons given above, we agree with the learned Single Judge that from the averments made in the plaint; the plaintiffs, are members of defendant No-4 and the dispute pertains to the exclusion of their names from the new list of the members as a result whereof they were denied participation in the elections of defendant No.4 and, therefore, their case falls under Section 54 and the jurisdiction of civil Courts is ousted under section 70-A of the Act."

11. The impugned order dated 25-5-1989 is, therefore, maintained and the appeal is dismissed with costs. M.B.A./S-496/K Appeal dismissed.