GOVERNMENT OF PUNJAB Versus KISSAN COOPERATIVE CREDIT CORPORATION LTD.

ORDER

ZAFFAR HUSSAIN MIRZA, J. ‑‑The application of the respondent for registration as a Society under section 9 of the Co‑operative Societies Act, 1925, (hereinafter referred to as the "Act") was .refused by the Registrar, Co‑operative Societies, Punjab, Lahore vide order dated 30th April, 1986, on the grounds that (i) the promoters belong to different districts, (ii) the objects of the proposed society did not fall within the purview of the Act and (iii) that the bye‑laws of the society contemplate doing of banking business which is prohibited by Establishment of the Federal Bank for Co‑operatives and Regulation of Co‑operative Banking Act (IX of 1977).

2. The said order was set aside on appeal by the Secretary to Government of the Punjab, Co‑operative Department, who disagreed with the view taken by the Registrar, holding that the order passed by the latter was based on misreading of the record and conjecture. As to the third ground it was observed by the Secretary that "the bye‑laws of the society do not show that the management will do banking." Accordingly by order dated 1st July, 1986, he directed that the society be registered after it amends the bye‑laws by deleting the unauthorised category of membership residing at Lahore.

3. After doing the needful the society once again approached the Registrar but he again pointed out various defects in the application of the society and directed various amendments to be made in the bye‑laws, including the deletion of bye‑law No.4(d) which in his opinion permitted the society to do banking business, vide order dated 15th July, 1986.

4. Being aggrieved the society once again went before the Secretary to Government who by his order dated 3rd November, 1986, upheld the order of the Registrar and affirmed the view taken by him that the bye‑laws required to be amended as directed by him, which was well within the scope of the earlier order passed on appeal.

5. The society then challenged orders passed by the Registrar and the Secretary to Government of Punjab, in a writ petition before the Lahore High Court, Lahore. A learned Single Judge who heard the writ petition held that as in the earlier appellate order it was specifically directed that the "Registrar shall register the petitioners society after the lacuna is removed by the petitioners" and the society having removed the specified objectionable provisions in the bye‑laws, the matter stood finally disposed of and the Registrar was not competent to raise further objections and reopen the matter of registration afresh. In this behalf the learned Judge observed:

"In my considered view, the Registrar‑respondent No.2, was not at all competent to go beyond the scope of the appellate order passed by Mr. Javed Ahmad Qureshi, Secretary Cooperative Department vide his order dated 1‑7‑1986. It is admitted before me that respondent No.2 is a subordinate functionary acting under the Secretary Cooperative Department. This being so, respondent No.2 was duty bound to act in the matter of registration of the petitioner society in the light of the order passed by his superior namely, Secretary Cooperative Department."

In this view of the matter the learned Single Judge by his judgment dated 23rd December, 1987, declared the two impugned orders before him to have been passed without lawful authority and of no legal consequence. It was directed that the Registrar shall comply with the order passed by the Secretary Cooperative Department, Government of Punjab, on 1st July, 1986.

It is in these circumstances that the Government of the Punjab through the Secretary Cooperatives, Punjab, and the Registrar Co‑operative Societies, Punjab, have brought this petition seeking leave to appeal from the judgment of the learned Single Judge of the, High Court. It is contended by the learned Advocate‑General, Punjab, that the learned Single Judge fell into an error in holding that the subsequent order passed by the Registrar was in violation of the appellate order dated 1st July, 1986. He pointed out that subsections (4), (5) and (6) of section 42 of the Act IX of 1977 prohibit the registration of a cooperative society, the object of which is to do banking business and according to him the relevant bye‑laws of the society pointed out by the Registrar permit the respondent society to undertake banking as one of its objects. Therefore, the order of the Registrar was justified in directing the society to delete the offending clauses of the bye‑laws.

6. Raja Muhammad Anwar, learned counsel appearing for the caveators/respondents, on the other hand, supported the judgment of the High Court and maintained that the bye‑laws in question were perfectly in consonance with the provisions of the Co‑operative Societies Act and did not offend against the prohibition of the law relied upon by the petitioners.

7. We have considered the respective contentions of the learned counsel. We find that prima facie the law as pointed out does prohibit a society of the kind formed by the respondents from indulging in banking business. Bye‑law No.4(3)(b) provides for raising and arranging funds for the society, inter alia, by deposits and loans from non members. The question, therefore, is whether this provision is in contravention of section 42 of the Act IX of 1977 so as to require modification or omission from the bye‑laws before the society can be registered. This aspect of the case was not adverted to by the learned Single Judge, who only proceeded upon a technical ground to strike down the order of the Registrar. It also appears that in the earlier appellate order the direction to the Registrar was to the effect that he shall register the society "in accordance with law" . Consequently in the face of a legal objection the propriety of the view taken by the learned Single Judge that the Registrar was bound to register the society requires to be examined. .

8. Leave to appeal is accordingly granted to examine the aforesaid questions of law. The appeal shall be prepared on the present record and shall be set down for early hearing if possible before the summer vacation. The operation of the impugned judgment of the High Court shall stand suspended until the disposal of the appeal.

M.Y.H./G‑71/S Leave granted.