2009 PLP 143 (CLC)

MUNIB AHMED KHAN, J.

By this order, we intend to dispose of all these three petitions, referred to above, in which similar questions of facts and law are involved. Contention of the petitioner is that section 43 of the Cooperative Societies Act, 1925 (hereinafter referred to as the "said Act") have sub-clauses (1) to (4) and enquiry as envisaged by section 43(1) of the said Act is to be conducted when the conditions mentioned in sub-clause (2) are to be complied with. Mr. I.H. Zaidi, learned counsel appearing for the petitioner submits that there was no compliance of subsection (2), therefore, notices for enquiry issued by the Registrar have no validity and same may be declared as such. In aid of his contention, he has relied upon the case-law reported as Karachi Administration Employees Cooperative Housing Ltd. v. Government of Sindh and another 2004 YLR 1070. He further added that there must be some show-cause notice or at least allegations to be intimated to the Society so the Society may be in a position to rebut it. On the other hand, Mr. Abdul Fateh Malik, learned Additional Advocate-General, Sindh submits that subsections (1) and (2) of section 43 are independent. He submits that sub-clause (1) contains the provision of law in respect of suo motu power which may be held by the Registrar on his own motion. He has requested for dismissal of petitions. In support of his contention, he has relied upon the case-laws reported as (i) Pir Illahi Bukhsh Cooperative Housing Society Ltd., Karachi v. Registrar Cooperative Societies, Karachi and others 1968 SCMR 423, (ii) Muzaffar Ali Shah and others v. Registrar, Cooperative Societies, Karachi and another PLD 1968 Kar. 422 and (iii) Muhammad Naseem Khan and another v. Government of N.-W.F.P. through Secretary, Department of Cooperative Peshawar and 24 others 1990 CLC 1693. Mr. I.H. Zaidi, learned counsel has countered by stating that the aforementioned authorities referred by learned A.A.-G. have been differentiated by the case of Karachi Administration Employees Cooperative Housing Ltd. (supra). We have heard the arguments advanced by learned counsel for the parties, perused the material available on record and thoroughly examined the case-laws cited at Bar. In order to appreciate the contentions of both the learned counsel, it would be advantageous to reproduce section 43 of the said Act, which reads as follows:

"

43. Inquiry by Registrar.

(1) The Registrar may of his own motion by himself or by a person duly authorized by him in writing in this behalf hold an inquiry into the constitution, working and financial condition of a society. (2) The Registrar shall hold such an inquiry as is contemplated in subsection (1) of this section

(a) on the requisition of society, duly authorized by rules made in this behalf to make such requisition, in respect of one of its members, such member being itself a society; (b) on the application of a majority of the Committee of the society; (c) on the application of 1/3rd of the members of the society. (3) All officers and members of the society whose affairs are investigated shall furnish such information in their possession in regard to the affairs of the society as the Registrar or the person authorized by the Registrar may require. (4) The result of any inquiry under this section shall be communicated to the society whose affairs have been investigated." We have noted that section 43 of the said Act can be divided in two types of inquiries; one is to be held by the Registrars of their own motion for which no criteria or condition has been provided while in respect of the inquiry not on suo motu basis but otherwise for which some criteria has been provided in sub-clauses (a), (b) and (c) of subsection (2). It appears that in all these three petitions, notices have been issue specifically under section 43(1) of the said Act. According to us that subsection gives the power to the Registrar to hold an inquiry at his own motion for which no procedure has been provided nor the same suo motu inquiry require fulfilment of the conditions mentioned in subsection (2). In such a situation, the same are not attracted. Our view is being supported by Pir Ilahi Bukhsh Cooperative Housing Society's case (supra) and the relevant portion of this case is reproduced as under:-- "It seems clear enough that none of the conditions specified in subsection (2) of section 43 was in existence when the order in question was made so that the Registrar did not act under any obligation such as that created by this subsection. His action, therefore, clearly lay under subsection (1), i.e., he acted in exercise of the discretion conferred by that subsection, and it does not translate his action to the second subsection that he was moved so to act by reason of complaints reaching him of mal administration of the Society's affairs." Another authority in support of the above findings in Muzaffar Ali Shah and others v. Registrar, Cooperative Societies, Karachi and another PLD 1968 Kar. 422, the Court observed as follows:

"S.43

Cooperative Societies Rules, 1927, R.48

Preliminary investigation under S.43 is in respect of affairs of a Society as distinguished from Managing Committee

Registrar may just issued show-cause notice on basis of information with him without holding preliminary enquiry

Requirements of natural justice are met by R.48, which enjoins issuing of show-cause notice

No compulsion on Registrar to collect information in a particular way, before issuing show-cause notice." In such a situation, we find that the power vested in and exercised by the Registrar under section 43(1) is independent of subsequent subsection (2), hence it is not necessary that the Registrar, even after receipt of information in respect of allegations against a society, should wait for receipt of said information in a particular way. In the circumstances, we hold that the notice under section 43(1) of Cooperative Societies Act has been issued validly with further observation that the rule of natural justice demands that a person, proceeded against should be provided material at the time when he has been heard so he may be in a position to rebut the allegations. It is not necessary for the Registrar to issue a proper show-cause notice or give details of allegations but after receipt of the complaint or information, he may give gist of the allegations to the Society at the time of hearing and thereafter may decide the issue involved. The authority referred to by Mr. I.H. Zaidi, learned counsel for the petitioner does not specifically deal with the issue involved in these petitions. With the above observations, these petitions stand disposed of together with the pending applications. M.H./S-91/K Order accordingl