NISAR HUSSAIN Versus REGISTRAR, COOPERATIVE SOCIETIES
1. SALEEM AKHTAR, J This petition has been filed challenging the order of the respondent No.l passed under section 43(2)(b) of the Co‑operative Societies Act, 1925 giving direction to hold elections of the office bearers and Committee members of respondent No.4. The petitioner has also sought consequential relief as well.
2. The petitioner is a member of the Co‑operative Society registered under the Co‑operative Societies Act, 1925. The petitioner had challenged the membership of 69 persons and had instituted an arbitration case alleging that they were not legitimate members not qualified to be members of the respondent No.4. The respondent No.2 referred the arbitration case to the Registrar s nominee who entered into the arbitration proceedings. The petitioner appointed his arbitrator but the defendant in that case did not nominate the arbitrator and consequently the respondent No.2 appointed arbitrator on his behalf. When the arbitration was proceeding certain members of the Managing Committee headed by Mr. Sakhawat Hussain, the President of the Society moved an application under‑section 43 (2)(b) of the Act dated 3‑6‑1987 before the respondent No.l making allegation of corruption and mismanagement against certain members of the Managing Committee and prayer was made to inquire and punish them suitably according to law. The respondent No.l by notice dated 21‑6‑1987 called upon Sakhawat Hussain to appear before him on 25‑8‑1988 who appeared and explained the position. After that an order dated 27‑6‑1987 was passed under section 43(2)(b) of the Act by the respondent No.l ordered for holding elections under Rule 6(A) of the Co‑operative Societies Rules. The respondent No.2 in exercise of the powers vested in him under section 30 subsection (2) of the Act appointed respondent No.3 as authorised officer to convene the special general body meeting of the society for holding election. The respondent No.4 requested for a copy of the said order, but it was not supplied. The respondent No.3 issued a notice dated 29‑6‑1987 to the members of the Managing Committee informing them to attend the meeting on 4‑10‑1987 at 11‑00 a.m. in his office for deciding and chalking out a programme for convening a special general body meeting for electing President and committee‑men for the year. Thereafter the respondent No.3 sent letter dated 23‑7‑1987 by which certain committee members were retired. It has been alleged that no notice was given to the members of the managing‑committee for holding the meeting with regard to retirement. The respondent No.3 issued agenda dated 23‑8‑1987 and also a list of members comprised of 299 members. This membership was divided into two groups of which one group consisted of 160 members and other of 69 members. The administrator arranged for election of the managing committee and convened special general body meeting. and the committee was elected unopposed. This management committee continued till March, 1987 when the majority group filed an application and cases before the Court. The membership of the petitioner was challenged as he had not paid admission fee and share money. It was admitted that membership of 69 members had been challenged which was subject‑matter of arbitration.
3. It has been stated that an application under section 43 of the Act was filed by certain members of the Society in which the petitioner was not a party. The Registrar examined the application thoroughly and passed an order for holding the special general body meeting of the Society to elect the managing committee so that the dispute between the rival groups is finished and the affairs of the Society are managed by the elected members smoothly. The respondent No.l has not denied that copy of the order was not supplied to the respondent No.4 and it has been stated that the dispute was between the respondent No.l and the ex‑President. The petitioner not being a party to it was not entitled to inquire into the order passed by respondent No.l.
4. From the statement and counter‑statement of the parties it is clear that while investigating into complaint under section 43 subsection 2 (b) of the Act the respondent No.l passed the following order:‑
5. Sub: Special general body meeting the Rizwan Coop: Housing Society Ltd. Karachi under section 13(2) of the Co‑operative Societies Act of 1925 read with the Rule 6‑A of the Co‑operative Societies Rules, 1927.
6. Whereas the Registrar, Co‑operative Societies, Sind, while disposing of the petition under section 43(2)(b) of the Co‑operative Societies Act, 1925 moved by the President and others on the affairs of the Rizwan Co‑operative Housing Society Limited, Karachi, has been pleased to order for holding elections under Rule 6‑A of the Co‑operative Societies Rules, 1927 and till such time both the groups should maintain status quo with regard to the affairs of the Society and restrain from issuing fresh allotment, transfer, mutation and enrolment of new members etc. and not to take any action prejudicial to the interest of the Society.
7. Now, therefore, I, as Deputy Registrar, Co‑operative Societies, Karachi in exercise of the powers vested in me under section 13(2) of the Co‑operative Societies Act, 1925 read with Rule 6‑A of the Co‑operative Societies Rules, 1927 do hereby appoint Mr. Muhammad Haneef Siddiqui, Special Auditor Co‑operative Societies, Karachi as authorised officer to convene the special body meeting of the Society for holding election under Rule 6‑A of the Co‑operative Societies Rules, 1927 as per bye‑laws of the Society.
8. Sd/ (Syed Sirajuddin)
9. Deputy Registrar Co‑operative Societies, Karachi
10. For the purpose of passing the order for holding the election, the respondent No.l has invoked section 43(2)(b) of the Act which reads as follows:‑
43. Inquiry by Registrar.‑(1) The Registrar may of his own motion by himself or by a person duly authorised by him in writing in this behalf hold an inquiry into the constitution working and financial condition of society.
(2) The Registrar shall hold such an inquiry as is contemplated under subsection (1) of this section
(a) on the requisition of society, duly authorised 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; and
(c) on the application of 1/3 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 authorised 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.
11. Mr. Niaz Ahmad Khan, the learned counsel for the petitioner has contended that under section 43 the Registrar has no power to order for holding the election. Section 43 empowers the Registrar to hold an inquiry into the constitution, working and financial conditions of the Society suo moto or an application filed by any person. Such inquiry can also be made in the manner provided in subsections (a) (b) and (c) of section 34(2). After making inquiry the Registrar should communicate to the society the result of the inquiry. The inquiry is, therefore, restricted to matters relating to the constitution of the Society, its working and financial condition. It does not in any manner authorise the Registrar to supersede any managing committee or order to hold elections. The Registrar is required to intimate the Society the result of his inquiry. There is nothing on record that except the impugned order any other communication was made by respondent No.l relating to the inquiry.
12. Mr. Jatoi, the learned counsel has contended that the petition is mala fide for the reason that respondent No.4 has been sued through its ex‑president. This fact by itself is not sufficient to hold that the petition is mala fide unless it is shown that any prejudice has been caused to society or any undue advantage has been taken by the petitioner by adopting this procedure. The learned counsel contended that the election of the society according to the bye‑laws is to be held every year and now it is due. The last election which is subject‑matter of this petition was held on 17‑9‑1987 whose result has not been announced and is subject‑matter of this petition. He pleaded that the results of the election which has been held should be announced. On query he has stated that on result being announced the successful candidate shall continue for a period of one year from the date of announcement of the election. The term of the member of the Managing Committee will also be determined according to rules as 1/3 members are to retire every year. We have observed that in an inquiry under section 43 (2) (b) the Registrar is not entitled to hold an election, and therefore, the order was passed without any lawful authority. Consequently, all such actions which were taken in pursuance of such an illegal order are also void. If we permit the election result to be announced and be given effect to, then it means A that persons elected under illegal order who otherwise would have completed a period of one year, would be installed for another period of one year from today. This in our view would not be proper as the elections are again due and a period of one year from the date when the election was held last has expired whose result has remained in abeyance.
13. Mr. Warsi for respondents Nos.l and 2 has stated that hel would have no objection if the election is held afresh. This is a very sensible and proper approach. We, therefore, declare that the order passed by the respondent No.l dated 27‑6‑1987 is without lawful authority and of no legal effect. The election held in pursuance of the said order is also declared to be void and illegal. The Registrar is directed to hold election according to bye‑laws of the Society on or before 30‑11‑1988. The parties to bear their own costs.
14. M . Y . H . /N‑133/ K Petition allowed.