P L D 1967 Lahore 991 (PLP)

MUHAMMAD AFZAL CHEEMA, J.‑This judgment shall dispose of three Writ Petitions Nos. 2133 of 1965, 385 and 546 of 1966, filed under Article 98 of the Constitution, all calling in question the legality of the same order of the Registrar, Co‑operative Societies, Lahore Region, dated 20th of October 1965, whereby he superseded the Board of Directors of the Pakistan Express Co‑operative Bank, Ltd., Lahore. Writ Petition No. 2133 of 1965, was filed on behalf of the Pakistan Express Co‑operative Bank, Ltd., through its Secretary, Mian Aziz‑ud‑Din. He is also a co‑petitioner with his wife in Writ Petition No. 385 of 1966, which was filed subsequently through Mr. Rafiq Ahmad Bungash, Advocate, without disclosing that the first mentioned writ petition had already been filed in this Court and was awaiting admission. Writ Petition No. 546 of 1966 was filed on behalf of 45 petitioners claiming to be the share‑holders of the Sartaj Co‑operative Urban Bank, Ltd., whose name was subsequently changed to the Pakistan Express Co‑operative Bank Limited, i.e., the petitioner in Writ Petition No. 2133 of 1965.

2. Although some inconsistent and contradictory averments were made in the three petitions, the common background relevant for the purposes of the cases is that the Sartaj Co‑operative Bank Ltd. was registered under the Co‑operative Societies Act of 1912 in the year 1956, whose main customers were two sister concerns, namely, Sartaj Industries Ltd., and Sartaj Engineering Co. Ltd., Lahore. To start with the Bank was financed by the Provincial Co‑operative Bank Ltd. In November 1964, after mutual consultations between the creditor‑bank and the Sartaj Co‑operative Urban Bank, it was decided that the former should depute Mr. A. R. Malik, an officer on its staff to work as General Manager of the latter. In April, 1965, the name of the Sartaj Co‑operative Bank Ltd., was changed to the Pakistan Express Co‑operative Bank Ltd. Several complaints of mismanagement and irregularities were received by the Registrar, Co‑operative Societies, against the Express Co‑operative Bank Ltd., from time to time, and ultimately on 24‑6‑65, the Registrar, issued a notice to the Bank through its General Manager under rule 48 of the Co‑operative Societies Rules of 1927, to show- cause why the Managing Committee should not be susperseded. This notice which is Annexure 'E' in Writ Petition No. 2133 of 1965, contains the details of the alleged irregularities and it was demanded in the conclusion paragraph that the reply should reach the Registrar within fifteen days. Yet another notice Annexure `G' was issued by the Registrar on 21st August 1965, pointing out some more irregularities as revealed by the State Bank's Inspection and Auditors' report. The reply was required to be submitted before 10th of September 1965, failing which it was to be presumed that the Bank had no explanation to offer. After some negotiations and particularly having considered the reply furnished by the Bank on 9th September 1965, to the above‑mentioned show‑cause notices the Registrar, ultimately passed the impugned order, Annexure `H', whereby in exercise of the powers vesting in him under rule 48 of the Sind Co‑operative Societies Rules, 1927, he superseded the Board of Directors for a period of two years, vide notification No. 7375/81/R.L/B, Lahore, dated the 20th of October 1965; and appointed Muhammad Yusuf respondent No. 2 (in Writ Petition No. 385 of 1966), a retired Assistant Registrar, Co‑operative Societies, as its Administrator to exercise all the powers of the Board of Directors.

3. All the three petitions were admitted by us on 28th of April 1966. At the time of admission, however, three conten tions were raised by the learned counsel for the petitioner, namely (1) That rule 48 of the Co‑operative Societies Rules pressed into service in superseding the Board of Directors was ultra vires of the Co‑operative Societies Act; (2) that in spite of the super-session of the Board of Directors, the Managing Committee still remained in existence being competent to conduct the business of the Bank; and (3) lastly, that the Administrator appointed by the Registrar on 20th of October 1965, had no power to change the name of the Bank, also mentioned as Society.

4. The last two contentions were overruled by us, while the petitions were admitted to examine the first contention relating to the vires of rule 48.

5. The main contention raised by Mr. Rafiq Ahmad Khan Bungash, who appeared on behalf of the petitioners in the three cases, was that there was no provision in the Co‑operative Societies Act of 1925, for the super-session of a Society or a Bank established under the Act, and as such," the impugned order of suspension was ultra vires of the Act itself. He took us through the various provisions of the Act, particularly those relating to the powers of the Registrar in respect of registration of Societies, audit of their accounts, inspection, inquiries into their affairs, their liquidation, arbitration, and appeals, etc., in order to show that nowhere in the Act is contained any provision empowering the Registrar to supersede the Managing Committee or the Board of Directors. It was, however, conceded that section 71 of the Act dealing with rule‑making powers of the Government, to carry out the purposes of the Act, did specifically refer to the suspension and removal of members of the Committee and the appointment of an Administrator in clauses (g) and (g)(a) of subsection (2). But it was contended that in view of the cons picuous absence of any reference to the powers of super-session in the substantive provisions of the Act, a rule to this effect which is rule 48 in this case, would be ultra vires. Rule 4 of the Co‑operative Societies Rules, 1927, framed under section 71 of the Act deals with matters in respect of which a Society could make bye‑laws, and in sub‑rule (d), there is a reference to the mode of appointment and removal of members of the Committee. A copy of the relevant bye‑laws is Annexure `A' to writ petition No. 546 of 1966, and Bye‑law 20 gives the general meeting inter alia the power to suspend and remove members of the Managing Committee. Rule 48 of the Co‑operative Societies Rules of 1927 which was invoked by the Registrar in passing the impugned order reads as follow:: "48. (1) Notwithstanding anything contained in the bye‑laws of a society the Registrar may, by order published with reasons there for in the official Gazette, supersede the committee of a society for a period to be specified in such order. (2) The period of suspension specified in an order under sub‑rule (1) may from time to time be extended by the Registrar. (3) All powers and duties of the committee, shall, during the period of super-session, be exercised and performed by such person or persons not exceeding 9 as the Registrar may from time to time appoint in this behalf. (4) The person or persons appointed under sub‑rule (3) shall hold office for a period of 2 years. (5) On the expiry of every 2 years period, if the order of super-session is still in force, fresh appointment of person or persons shall be made by the Registrar for a period of 2 years, or for the period during which the order of super-session is in force, whichever is less. (6) Before making an order under sub‑rule (1) or sub‑rule (2) the Registrar shall (a) give the society an opportunity to show cause why such an order should not be made; (b) if the society is affiliated to a financing bank, consult such bank regarding such action and the provision to be made for Management of the affairs of the society; (c) if the society is the Provincial Co‑operative Bank Ltd., obtain the previous approval of the Provincial Government. (7) In the case of the Provincial Co‑operative Bank, the appointment of a person or persons under any of the foregoing sub‑rules of the filling of any vacancy shall be made by the Registrar with the previous approval of the Provincial Government. (8) Nothing in this rule shall affect the bye‑laws of the Society relating to the meeting of the committee. (9) . . . . . . . . . . . . . . . . ."

6. Thus the position as it finally emerges from a perusal of the relevant provisions of the Act and the rules is that in the substantive sections, there is no reference to the Registrar's power of super-session although in section 71 dealing with the rule‑making powers, there is a reference to the super-session of the members of the Committee and the appointment of an Administrator, amongst the subjects or items regarding which rules could be framed, and the relevant rule is rule 48, which was pressed into service by the Registrar. Again, under rule 4(c), bye‑laws could be framed to determine the mode of removal of the members of the Committee and the relevant bye‑law is 20(i), which however, has no bearing on the impugned order. The sole contention thus falling for determination is whether in the absence of a specific reference to the power of super-session in the substantive provisions, such a power could be exercised on the basis of rule 48, framed under the rule‑making provisions in which a reference to such a subject, has been specifically made. In other words it is to be seen whether rule 48 is ultra vires of the Act.

7. On the contrary, the learned counsel appearing on behalf of the respondents raised a preliminary objection assailing the maintainability of the petitions on the ground that the petitioners' appeal was already pending before the Provincial Government against the Registrar's decision, and as such, without having awaited the result of the appeal, the petitioners should not have rushed to this Court. In answer to the objection that appeals under section 64 of the Act were competent only against orders or decisions made under sections 10, 16, 45, 47, 50, 50(a), 54 and 54(a), none of which covered the impugned order, it was argued that the appeal fell within the scope of section 64‑A of the Act.

8. In order to appreciate the relative merits of the argu ments advanced by both sides, it would be necessary to examine the provisions of the. Act in a greater detail. In so far as the contention raised by the learned counsel for the respondents is concerned, it may be straightway dismissed as devoid of force, inasmuch as, there is nothing to indicate in sections 64 and 64‑A that an order of the kind with which we are dealing is amenable to appeal, notwithstanding the fact that an appeal had been admittedly filed by the petitioners, which was certainly not competent. For an appreciation of the correct position in this regard sections 64 and 64A are reproduced below: "

64. Appeals.‑An appeal against an order or decision of or sanctioned by the Registrar under sections 10, 16, 45, 47, 50, 50‑A, (54 or subsection (3) of section 54‑A) may be made by any party aggrieved or affected by the order or decision to the Provincial Government within two months of the date of the communication of the order. 64A. Power of Provincial Government and the Registrar to call for proceedings of subordinate officers and to pass orders thereon.‑The Provincial Government and the Registrar may call for and examine the record of any inquiry or the proceedings of any officer subordinate to them for the purposes of satisfying themselves as to the legality or propriety of any decision or order passed and as to the regularity of the proceedings of such officer. If in any case, it shall appear to the Provincial Government or the Registrar that any decision or order or proceedings so called for should be modified, or annulled or reversed, the Provincial Government or the Registrar, as the case may be, may pass such order thereon as to it or him may deem fit." It becomes abundantly clear from the above provisions that section 64‑A deals only with revisional powers of the Provincial Government and the Registrar whereas section 64 alone deals with appeals, whereby orders and decision made under the sections detailed above alone are amenable to appeal. Section 10 deals with Registration of Societies, section 16, with the amend ment of the bye‑laws of Societies; section 45 refers to costs of inquiries; 47 deals with winding up, 50 relates to the powers of liquidator; 50‑A relates to the powers of a Registrar to assess damages against the delinquent promoters, 54 refers to arbitra tion, and 54‑A pertains to the Registrar's power to set aside an award and refer back the dispute to arbitration. It is quite clear that the impugned order is not an order covered by any of these sections, and as such is obviously not amenable to appeal. Thus, even if it is assumed that the Provincial Government can treat the pending appeal as a revision which in the instant case may be deemed to be pending before it, it is now well‑settled that the availability of a revisional remedy would constitute no bar to the filing of a writ petition, and accordingly, the objection is overruled.

9. Coming now to the main question, having carefully examined the scheme of the Act, we may once more observe at the risk of repetition that there is no provision in the substantive sections relating to the super-session of the Managing Committee of a Society or a Bank. If there had been any such provision, the proper context for its insertion would have been after section 43 relating to an inquiry, and before section 47 dealing with the final stage of the liquidation when remedial measures have proved futile. We are surprised to see that while in the scheme of the Act, meticulous care has been taken by its framers to specifically provide for comparatively unimportant matters, such as restriction on borrowing, and payment of dividend, con tribution to charitable purposes, inspection of books, costs of inquiry and their recovery, etc, no reference even in passing has been made to the Registrar's powers of super-session in the substantive provisions. Again, super-session of the Managing Committee and the appointment of an Administrator though being rather extraordinary and vital steps, have not been mentioned, as being amenable to appeal under section 64 of the Act, and quite understandably so, inasmuch as, these were not substantively provided for in the body of the Act itself. Nonetheless, as stated earlier, clause (g) and (ga) of subsection (2) of section 71 do make a reference to the removal of members of the Committee and the appointment of an Administrator, and are reproduced below: "71 . . . . . . . . . (g) provide for the appointment, suspension and removal of the members of the Committee and other officers and for the procedure at meetings of the Committee and for the powers to be exercised and the duties to be performed by the Committee and other officers; (ga) provide, where ail the members of the Committee have been suspended or removed, for the appointment of a person to administer the affairs of the society and for the powers to be exercised and the duties to be performed by such person;" It was argued by the learned counsel for the petitioners that the expression "suspension", and "removal of the members of the Committee", was not the same thing as the super-session of the Committee itself. We were not able to appreciate this finesse, trying to show a subtle distinction between "suspension" and "super-session" for a limited period of two years as in the instant case, or between "suspension of the Committee" and the "suspension of the members of the Committee". Super-session for a limited period would obviously be tantamount to suspen sion which also connotes temporary removal, and the suspension of the members of the Committee, if exercised in respect of all of them would be tantamount to the suspension of the Committee as a whole. Thus, from these provisions, the powers to supersede the Committee temporarily and appoint an administrator in its place can clearly be spelt out. It is in pursuance of these provisions that rule 4‑C dealing inter alia with the mode of the removal of the Committee has been framed. It is thus clear that the Legislation had in view such an eventuality and had taken due care to meet the same in section

71. The only objection to which the mode of this rather important provision is susceptible is that it has not been substantively provided for in its proper context. Once the intention of the framers of the Act to provide for such a situation becomes clear, the mere improper arrange ment in the scheme of the Act would not be material as the sole object of interpretation is to find out the real intention of the law‑giver. For reasons stated earlier, we have no doubt made it clear that the provision relating to the super-session of the, Committee being important, should more appropriately have been substantively provided for in between sections 43 and 47, and should also have been made subject to appeal, but once having come to the conclusion that such an intention is clearly inferable from other provisions, it is not the business of this Court to question the wisdom of the law‑givers in the matter of arrange ment which may be due to poor draftsman-ship. After all, section 71 of the Act though relating to the rule‑making powers contains a statutory provision in which a specific reference has been made to the suspension of the Committee and appointment of an administrator. Even otherwise, it only stands to reason that the Registrar who is clothed with the authority of even taking the extreme step of ordering the liquidation of a society should also have such a lesser power of suspension with a view to adopt temporary remedial measures. It, therefore, appears to be difficult to deny such a power to the Registrar. If he can dissolve a society which he can certainly do under the Act, he can as well suspend its Committee which by no stretch of imagination can be deemed to be an act in excess of his powers.

10. The learned counsel for the petitioners drew our attention to several authorities to show the limits of rule‑making powers of the authority concerned. It was argued that such a power could not go behind the substantive provisions. Reliance was placed in particular on Saleh Muhammad v. Traffic Manager, Port Trust Karachi (P L D 1961 Kar. 349), The United Industrial Bank Limited v. Mohan Bashi Shaha and others (P L D 1959 S C 296) and The Province of East Pakistan and others v. Nur Ahmad, etc. (P L D 1964 S C 451). We can hardly dispute this proposition of law. In the first authority, their Lordships enumerated the following grounds on which bye‑laws framed under statutes may be treated as ultra vires : (i) that they are not made, sanctioned and published in the manner prescribed by the Statutes, which authorises the making of them, (ii) that they are repugnant to the laws of the country. (iii) that they are repugnant to the statutes under which they are made. (iv) that they are uncertain; and (v) that they are unreasonable. In United Industrial Bank Ltd. v. Mohan Bashi Shaha and others, it was held by their Lordships that rules framed under the statutes cannot be relied upon to defeat the clear intention of legislation expressed in the Legislation itself. In Province of East Pakistan v. Nur Ahmad, which was an appeal under the Basic Democracies Order, their Lordships reiterated the same position by observing that rule‑making authority could not clothe itself with the powers which the statute itself did not give. We respectfully bow before these observations, but they are not in the least relevant to the instant case, inasmuch as for reasons stated earlier, we have come to the conclusion that the intention of the Legislature to clothe the Registrar with such a power directly flows from the provisions discussed earlier. The relevant provision though contained in the rule‑making section, nonetheless remains a statutory provision whose importance cannot be minimised merely for the reason of what we might respectfully observe, improper drafting.

11. For the foregoing reasons, the petitions fail and are hereby dismissed with costs. A. H. Petition dismissed.