PLJ 2009
Present:
Arshad Noor Khan, J.
Mrs.
ZAIBUNNISSA--Applicant
versus
MUHAMMAD
SAJID and 2 others--Respondents
C.M.A. No.
341 of 2008 in Suit No. 1352 of 2004, decided on 26.8.2008.
Civil
Procedure Code, 1908 (V of 1908)--
----O.VII,
R. 11--Specific Relief Act, (I of 1877), Ss. 39, 42 & 54--Cooperative
Societies Act, (VII of 1925), S. 70--Rejection of plaint--Mandatory
notice--Cooperative Society was not initially impleaded as party to the suit
but subsequently plaintiff served notice to the Society and after lapse of two
months impleaded the society as defendant with the permission of Court--As no
notice u/S. 70 of Cooperative Societies Act, was given prior to filing of the
suit, therefore, suit was liable to be rejected--Validity--Notice under S. 70
of Cooperative Societies Act, 1925, was properly served prior to impleading the
Society as party to the suit--As such compliance of S.70 of Cooperative
Societies Act, 1925, was already made before joining of Society as party to the
suit who joined as party much after the expiry of two months period after
service of notice under S.70 of Cooperative Societies Act, 1925--High Court
declined to reject the suit on such plea raised by the Society--Application was
dismissed.
[P. 152] A
2003 YLR
2216 ref.
Cooperative
Societies Act, 1925 (VII of 1925)--
----S. 54,
proviso--Arbitrator--Jurisdiction--Complicated questions of law and
fact--Allegation of fraud and misrepresentation--Arbitrator cannot adjudicate
upon allegations of fraud and misrepresentation allegedly committed by parties
as such allegations are completely alien to S.54 of Cooperative Societies Act,
1925--When allegation of committing-fraud and misrepresentation is against
non-members of the Society, then arbitrator has not been assigned any power to
adjudicate upon such allegations under S.54 of Cooperative Societies Act,
1925--Even otherwise proviso attached to S.54 of Cooperative Societies Act,
1925, provides suspension of proceedings before Registrar if question involving
in the proceedings is a complicated question of law and facts--Registrar in
such circumstances, is required to suspend proceedings in the matter until the
question has been tried by a regular suit instituted by one of the parties or
the Society. [P. 152] B
Specific
Relief Act, 1877 (I of 1877)--
----Ss. 39,
42 & 54--Cooperative Societies Act, (VII of 1925), S.54, proviso--Civil
Procedure Code, (V of 1908), O.VII, R. 11--Rejection of plaint--Arbitration by
Registrar--Complicated question of law and fact--Allegation of fraud and
misrepresentation--Cooperative Society sought rejection of plaint on the ground
that suit was filed without getting mandatory arbitration under S.54 of
Cooperative Societies Act, 1925--Validity--Fact of committing fraud and
misrepresentation was a complicated question of fact which required evidence to
be led by parties--Such question could not be effectively and satisfactorily
adjudicated upon by Registrar under S.54 of Cooperative Societies Act,
1925--Cooperative Society could not press applicability of S.54 of Cooperative
Societies Act, 1925, in view of the proviso, in getting the plaint rejected
under O.VII, R. 11 C.P.C.--Application was dismissed.
[P. 153] C
PLD 2002
Kar. 414; 2001 YLR 2537; 2000 YLR 1385 and
2001 YLR 882
ref.
Mr. Mushtaq
A. Memon, along with Muhammad Ali Hakro, Advocate for Applicant.
Mrs. Soofia
Saeed Shah, Advocate for Respondent No. 3.
Date of
hearing: 26.8.2008.
Order
By this
order, I intend to dispose off application under Order VII, rule 11, C.P.C.
(C.M.A. No. 341 of 2008) filed by Defendant No. 3 praying therein for rejection
of the plaint.
The facts
leading rise to the present application in brief are that the plaintiff filed
suit for declaration, injunction, cancellation of documents and recovery of
damages to the tune of Rs.3,50,00,000 against the Defendants Nos. 1 and 2
alleging therein that the Defendants Nos. 1 and 2 have forged and fabricated a
sale-deed in respect of property bearing old Survey No. 64, new Survey No.
JM-1019, admeasuring 202 sq. yards with Bungalow constructed thereon situated
at Muslimabad Cooperative Housing Society, Jamshed Quarters, Karachi for a
consideration of Rs. 3,00,00,000 with the condition that the plaintiff who is
old, infirm and disable lady will remain in physical possession of the said
bungalow till her last breath. It is further stated in the plaint that on
22-3-2004 the Defendant No. 2 obtained thumb-impression of the plaintiff on
papers stating to her that he has brought a sum of
Rs.
1,00,00,000 for payment to her which included an agreement of sale and
applications which were to be moved in the offices of the government for
obtaining taxes clearance etc. The plaintiff who is an illiterate, widow aged
over 75 years put her thumb impression on the said sale agreement and the blank
paper in good faith that Defendant No. 2 would mention therein the agreed sale
price of Rs.3,00,00,000 with agreed terms regarding her physical possession
till her last breath. It is further stated in the plaint that Defendant No. 2
got opened bank account in the name of the plaintiff in UBL, Kashmir Road
Branch, and deposited Rs. 1,11,01,000 as part payment of sale price. On
22-4-2004 the Defendant No. 2 along with other persons visited the house of the
plaintiff and required her to hand over the physical possession to him as the
purchaser and threatened her to throw her out from the bungalow. The agreement
was got registered by the plaintiff thereby leaving the condition of residence
of the plaintiff till her death in the said bungalow and when the plaintiff got
the agreement read out and came to know about the fraud played by Defendant No.
2, that in the said agreement sale consideration was mentioned to be Rs.
1,40,00,000 instead of Rs.3,00,00,000 and that the vacant possession and title
documents were agreed to be handed over on execution of final agreement of sale.
The plaintiff called her estate agent Kazi Zahoorudddin from whom the
transaction had taken place and plaintiff handed over to him pay orders dated
23-4-2004 for Rs.20,00,000 and dated 23-4-2004 for Rs.91,00,000 drawn in favour
of Defendant No. 1 for refunding the same to Defendant No. 1 and the said
estate agent did deliver the same to the Defendant No. 1 as the pay orders were
returned to the plaintiff along with legal notice dated 26-4-2004 sent on
behalf of Defendant No. 1. It is further stated in the plaint that the
plaintiff also submitted application before the Secretary Muslimabad
Cooperative Housing Society but he did not take any action, which constrained
the plaintiff to file the suit, as stated above.
Defendants
Nos. 1 and 2 have been served with the notice of the suit who also filed their
written statement as well as application under Order VII, Rule 11, C.P.C. which
application was earlier dismissed by this Court vide order dated 17-1-2006.
During
pendency of the suit, the plaintiff filed application under Order I, Rule 10,
C.P.C. praying therein to implead Muslimabad Cooperative Housing Society as
Defendant No. 3 which was allowed and Defendant No. 3 was inducted as party.
Prior to impleading Defendant No. 3, the plaintiff served a notice on Defendant
No. 3 and after expiry of two months on the application of the plaintiff,
Defendant No. 3 was impleaded as party.
Learned
counsel for Defendant No. 3 has filed the present application on two counts;
first the suit is barred under Section 54 of Cooperative Societies Act, 1925
(hereinafter shall be referred as Act of 1925), and the suit being barred under
Section 70 of the Act, 1925.
The learned
counsel for the plaintiff has filed counter-affidavit to this application. I
have heard Mr. Mushtaq A. Memon, advocate for the plaintiff and Ms. Soofia
Saeed Shah, advocate for Defendant No. 3.
The learned
counsel for Defendant No. 3 vehemently, contended that the suit is touching the
normal function and business of Cooperative Society, as such, the plaintiff has
to avail the remedy provided under Section 54 of the Act, 1925 and that no
notice as required under Section 70 of the Act, 1925 has been served on
Defendant No. 3 while instituting the suit as such the suit is barred under
Section 70 of the Act, 1925 therefore the plaint may be rejected under Order
VII, Rule 11, C.P.C. In respect of her contention she has relied upon the case
of Syed Sultan Ali v. Sahibzada Frogh Najam Najmi and others reported in 2003
YLR 2216.
Mr. Mushtaq
A. Memon, learned counsel for the plaintiff vehemently controverted the
arguments advanced on behalf of Defendant No. 3 and contended that the suit is
neither hit under Section 54 of the Act, 1925 nor under Section 70 of the Act,
1925. According to him, he had served requisite notice under Section 70 of the
Act, 1925 prior to impleading Defendant No. 3 as a party in the present case
and after expiry of two months from the date of service of notice, Defendant
No. 3 was impleaded as party therefore the suit in any way is not hit under
Section 70 of the Act, 1925. He further contended that since the suit was
already pending prior to impleading Defendant No. 3 as party, as such,
reference of the matter to arbitrator in terms of Section 54 of the Act, 1925
was not necessary for the reasons that matter on the point of fraud is already
sub judice before this Court and reference of the matter to the arbitrator
under Section 54 of the Act, 1925 would be a multiplicity of the litigation and
conflicting orders by the arbitrator and by this Court, therefore the suit in
any way is not hit under Section 54 of the Act, 1925. In support of his
contention he has relied upon the case of M. Waheedullah Ansari v. Zubeda
Sharif reported in PLD 2002 Kar. 414, the case of Amir Ali Hussain Shalwani v.
Ismaili Masalwala and others 2001 YLR 2537, the case of M/s. Super Builders v.
Gulshan-e-Faisal Cooperative Society and others reported in 2000 YLR 1385 and
the case of Tameezul Hassan v. Waheed Akhtar reported in 2001 YLR 882.
I have
considered the arguments advanced on behalf of the parties and have gone
through the entire material available before me.
It is an
admitted position that the plaintiff has filed suit for declaration,
injunction, cancellation of documents and recovery of damages against Defendant
Nos. 1 and 2 wherein initially Defendant No. 3 was not impleaded as party. The
plaintiff in her plaint has levelled allegations of misrepresentation and fraud
committed by Defendants Nos. 1 and 2 in executimg the sale agreement by taking
advantage of her old age about 75 years, infirmity and eyes disability by
stating the incorrect sale consideration of the property in question from
Rs.3,00,00,000 to Rs. 1,40,00,000 and by excluding the condition that she will
reside in the said bungalow till her last breath, that agreement was registered
in her absence. All these allegations contained in the suit seems to be very
severe and serious in nature and at the time of filing suit Defendant No. 3 was
not party therefore the service of notice on him under Section 70 of the Act,
1925 was not obligatory on the part of the plaintiff. After filing of the
written statement by the defendants the counsel for the plaintiff deem it fit
to implead Muslimabad Cooperative Housing Society as defendant, therefore the
learned counsel for the plaintiff served notice dated 28th July, 2006 under
Section 70 of the Act, 1925 on the District Officer, Cooperative Housing
Society which was received by the District Officer. The said notice was
received by DDO Cooperative Housing Societies on 28-8-2006 who called the
comments from DDO and in the light of the comments, D.O. Cooperative Housing
Societies advised to the plaintiff to approach to the Registrar for
arbitration. Admittedly the notice under Section 70 of the Act, 1925 dated 28th
July, 2006 was served by the counsel for the plaintiff on Defendant No. 3 and
after expiry of two months time as envisaged under Section 70 of the Act, 1925,
the application under Order I, Rule 10, C.P.C. was filed on 13-10-2006 coupled
with the joint prayer for amendment in the pleadings and the said application
(C.M.A. No. 7730/06 dated 13-10-2006) was decided on 20-8-2007 by order of this
Court whereby the said application was allowed, which shows that notice under
Section 70 of the Act, 1925 was therefore property served prior to impleading
the Defendant No. 3 as a party to the suit as such, in my humble opinion,
compliance of Section 70 of the Act, 1925 was already made before the joining
of Defendant No. 3 as a party to the present suit, who was joined as party much
after the expiry of two months period after service of notice under Section 70
ibid. The said ground is, therefore not available to Defendant No. 3 to claim
the rejection of the plaint under Order VII, Rule 11, C.P.C.
The next
point urged by the learned counsel for Defendant No. 3 is that the suit is hit
under Section 54 of the Act, 1925, because the suit has been filed touching the
business of the society as such the matter ought to have been referred to the
arbitrator in terms of Section 54, ibid. The contention advanced by the learned
counsel for Defendant No. 3, in my humble opinion, is devoid of any force for
the reason that admittedly the present suit was pending before this Court
wherein a fraud and misrepresentation has been alleged by the plaintiff against
Defendants Nos. 1 and 2 and the arbitrator could not adjudicate upon the
allegations of fraud and misrepresentation allegedly committed by the parties
as the said allegations are completely alien to Section 54, ibid and the
Defendants Nos. 1 and 2 are not the members of society and the allegations
regarding committing fraud and misrepresentation are inter se in between the
plaintiff and Defendants Nos. 1 and 2 for which the arbitrator has not been
assigned any power to adjudicate upon the said allegations under Section 54 of
Act, 1925. Even otherwise proviso attached to Section 54 of the Act, 1925
provides the suspension of the proceedings before the Registrar if the question
involving in the proceedings is a complicated question of law and facts, in
such circumstances, the Register is required to suspend the proceedings in the
matter until the question has been tried by a regular suit instituted by one of
the parties or by the society. The proviso attached to Section 54 of the Act,
1925 is usefully quoted hereinbelow for the sake of convenience:
"Provided
that if the question at issue between a society and a claimant, or between
different claimants, is one involving complicated questions of law and fact,
the Registrar may, if he thinks fit, suspend proceedings in the matter until
the question has been tried by a regular suit instituted by one of the parties
or by the society. If no such suit is instituted within six months of the
Registrar's order suspending proceedings the Registrar shall take action as
laid down in Paragraph 1 of this section."
The language
employed in the proviso to Section 54 ibid, without any iota of doubt, shows
that in case, if during the proceedings before the Registrar, if any,
complicated question of law and fact involved, the Registrar, if thinks fit may
suspend the proceeding till the decision on such questions of law and fact,
tried in a regular suit. In the present case the aforesaid proviso is fully
applicable for the reasons that complicated question of committing
misrepresentation and fraud has been alleged against Defendants Nos. 1 and 2 by
the plaintiff as according to her the consideration between the parties has
been substituted from Rs.3,00,00,000 to Rs. 1,40,00,000 by the defendants and
the terms and conditions which were originally agreed have also been
substituted by the defendants and the said fact of committing fraud and
misrepresentation, in my humble opinion, is a complicated question of facts
which requires evidence to be led by the parties and the said question of fact,
in my humble opinion, could not be effectively and satisfactorily adjudicated
upon by the Registrar under Section 54 of the Act, 1925. Defendant No. 3,
therefore cannot press the applicability of Section 54 of the Act, 1925 in view
of proviso, as discussed above in getting the plaint rejected under Order VII,
Rule 11, C.P.C.
The case law
relied upon by the learned counsel for the parties speaks about the proposition
that the matter involving and touching the day to day business of the society
or non-service of notice under Section 70 of the Act, 1925, provides
consequences of rejection of the suit, which observation made in the cases
relied upon by the learned counsel for the parties, is not disputed but the
fact remains that in the present case, as discussed above, a prior notice under
Section 70 of the Act, 1925 was already served by the plaintiff on Defendant
No. 3, even prior to filing of application before this Court for joining him as
necessary party and by virtue of proviso to Section 54, ibid, complicated
question of fact and law could not be determined by the Registrar and the
Registrar has to wait for the verdict of the Court on complicated questions of
fact and law and the matter on this point requires thorough evidence, which is
to be led by either of the party.
For the
aforesaid reasons and circumstances, I do not find any merit in the present
application, which is hereby dismissed, with no order as to cost.
(R.A.) Application dismissed.