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Petition No. 584 of 1966, decided on 24th April 1967.
, S. 43‑Enquiry under S. 43 only preliminary‑No warrant for conducting enquiry on pattern of a trial in presence of Managing Committee of Society‑Law does not contemplate show‑cause notice‑No rule of natural justice that such an enquiry should be, held, in presence of party concerned.
, S. 43‑Co‑opera tive 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 issue 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‑[The University of Dacca through its Vice‑Chancellor and another v. Zakir Ahmad P L D 1965 S C 90 and University of Ceylon v. Fernando (1960)1 All E R 631 ref).
, S. 71 (1), (2), (g), (ga) read with Co‑operative Societies Rules, 1927, r. 48‑Rule 48 Intra vires the Provincial Government both with reference to cls. (g) and (go) of subsection (2) of S. 71 and subsection (1) of that section -Managing Committee may be superseded "as a whole"‑Interpreta tion of statutes‑Words may be given their primary meaning but it would be erroneous to adopt an interpretation which is not in con sonance with policy and object of statute ‑[Amanullah v. Malik Muhammad Bashir and another P L D 1966 Lab. 585 ref., Regis trar Co‑operative Societies, Karachi v. A. Moghni and others Civil Appeal No. 26 of 1957 considered].
r. 48‑Does not provide for a "personal hearing" after a show‑cause notice, nor for oppor tunity to produce evidence‑No obligation on Registrar to allow such hearing or evidence after a show‑cause notice, especially when Chairman, Managing Committee, had not asked for same‑Personal hearing not a necessary requirement of rule of natural justice‑Gist of ride of natural justice : person affected should know nature of allegations and should have adequate opportunity to meet them.
In rule 48, Cc‑operative Societies Rules, 1927, there is no provision for a personal hearing. The. Chairman in his reply to the show‑cause notice in this case never asked for a personal hear ing nor did he ask for an opportunity to adduce evidence in defence, Therefore even if the phraseology of rule 48 had been as extensive as that of section 240 (3) of the Government of India Act of 1935 there was no obligation on the Registrar to start an enquiry afresh and give an opportunity to the Committee to produce evidence in defence when no one had asked for it.
The provision of a show‑cause notice does not place any obli gation on the authority concerned to .ask the affected party to produce evidence in its defence in spite of the fact that it may not nave asked for such En opportunity. Rule 48 requires that a show‑cause notice be issued to the Society ; that was done and a detailed reply was given by the Chairman. The Registrar was Perfectly justified in drawing his own conclusions after the perusal of the reply to the show‑cause notice. Personal hearing is not a necessary requirement of the rule of natural justice. The gist of this rule is that the person affected should know the nature of allegations against him and should have an adequate opportunity to meet the allegations.
A provision for a show‑cause does not necessarily impose a duty on the authority concerned to give a personal hearing to the affected party or give it an opportunity to produce defence evidence even when it has not been asked for.
Abdul Latif Niazi v. Government of West Pakistan P L D 1967 S C 62; The State and others v. Qazi Khanzada C. A. No. 39 of 1965 and The University of Daces through its Vice‑Chancellor and another v. Zakir Ahmad P L D 1965 S C 90 ref.
Ibrahim v. Federation of Pakistan through the General Manager, N. W. R. Lahore P L D 1957 Lab. 925 and Muhammad Ihsan Khan v. The Province of West Pakistan P L D 1963 Lab. 295 not applicable.
r. 48‑Some of the grounds stated in order of supersession not mentioned in show‑cause notice- None of the grounds, however, beyond scope of Co‑operative Societies Act (VII of 1925) or rules‑Registrar in his supervisory jurisdiction could take into consideration all matters before taking his decision to supersede Committee‑Question of sufficiency of evidence rests entirely with Registrar‑High Court in writ jurisdiction would Inter fere only if grounds stated were not relatable to Act or there was lack of jurisdiction or departure from procedure resulting in prejudice or impugned order had been motivated 6y malice‑Constitution of Pakistan (1962), Art. 98.
Where it was contended that some of the grounds, included in the impugned order of supersession, were not relatable to any matter touched in the Report of Enquiry Officer, or to the show -cause notice:
Held, that the grounds related to the working of the society and the conduct of its affairs by the Committee. None of the grounds was beyond the scope of the Act or the rules thereunder and the Registrar having the supervisory powers over the Society could take Into consideration all these matters before taking the decision that the society should be superseded. The formation of the opinion and the question of the sufficiency or otherwise of the evidence entirely rested with him. The only duty cast on him was to state the grounds and to issue a show‑cause notice to the Committee before superseding it. That having been done, the High Court could interfere, only if the grounds stated were not relatable to the Act, or there was lack of jurisdiction or there was a departure from prescribed procedure result in prejudice or the impugned order was motivated by malice.
Rehmat Elahi v. Government of West Pakistan P L D 1965 Lah. 112 distinguished.
S. 114, illus. (e)‑Presumption that official acts were regularly performed Malice in officer cannot be presumed without allegation in that behalf.
Art. 98‑ffigh Court not a Court of appeal when acting under Art. 98‑Administrative tribu nals judges of sufficiency of evidence and necessity, expediency and reasonableness of action taken‑High Court would not pronounce upon quality or quantum of evidence on which finding of administra tive authority depends.
The Administrative Tribunals are the judges of the sufficiency of the evidence and the necessity, expediency and reasonableness of the action to be taken. The High Court in exercise of its juris diction under Article 98 of the Constitution cannot sic as a Court of Appeal and pronounce upon the sufficiency, quality or quantum of evidence on which the finding of an Administrative Authority is based.
Waheed Faruqui and A. A. Akhtar for Petitioners.
Noorul Hassan, Akhtar Ahmad Kazi, A A.‑G. and Muhammad Haleem, Asstt. A.‑G. for Respondents.
Dates of hearing: 6th, 8th and 9th February 1967.
‑Eight persons who are members/ shareholders of the Pakistan Employees Co‑operative Housing Society Ltd., Karachi and claim to have been duly elected as members of the Managing Committee of the Society, have bled the present writ petition to challenge the validity of the order of the Registrar, Co‑operative Societies, Karachi, dated the 17th of September 1966 (copy Annexure 'E') by which the said officer superseded the Managing Committee (hereinafter called Committee) of the above society under rule 48 of the Co‑operative Societies Rules of 1927, for a period of two years and nominated Mr. Muhammad Azfar, respondent No. 2, to act as Administrator and to exercise powers and duties of the said Committee for the aforesaid period.
2. The above society was registered on the 23rd of December 1947, under section 10 of the Sind Co‑operative Societies Act of 1925, with the main object of rehabilitating the displaced employees of the Central Government and to provide building sites to them for construction of residential buildings. The Committee under Bye‑Law No. 46 is to consist of not less than 18 members but it is permissible to co‑opt one or two persons possessing special technical qualifications. We were told that the present Committee consisted of 21 members and had been elected in 1963. According to Bye‑Law 47 (a) the Chairman and one‑third of the members of the Committee have to retire after one year at the time of the annual general meeting. The condition for retirement is the longest term in office of the committeemen concerned since last election but where the persons concerned were elected on the same day the question of their retirement has to be decided by ballot. It is worth notice that the Committee functions as a perpetual body while one‑third of its members retire and are elected annually. There is no bar to the retiring members seeking re‑election.
3. By order dated the 5th of October 1965 (Annexure 'A') the Registrar of the Co‑operative Societies Karachi, ordered an enquiry under section 43 of the West Pakistan Co‑operative Societies Act, 1925, into the affairs of the Pakistan Employees Co‑operative Housing Society Ltd., Karachi, and appointed Mr. Rashid Ahmad P. C. S., City and Additional District Magistrate, Karachi, as an Enquiry Officer. The result of the enquiry was ordered to be submitted within two months from the date of the above order. The Enquiry Officer completed his enquiry on the 2rth of February 1966, and submitted his report (Copy Annexure 'C') to the Registrar of the Co‑operative Societies.
4. After the receipt of this report the Registrar purporting to act under Rule 48 of the Cc‑operative Societies. Rules, 1927 issued a notice to the Chairman, Pakistan Employees' Co‑operative Society Ltd. (Copy Annexure 'B') calling upon the Managing Committee to show cause within 15 days of the issue of the notice as to why the Managing Committee should not be superseded under rule 48, clause (1) of the Co‑operative Societies Rules, 1927. A copy of the report was also sent along with this notice. The Chairman sent a detailed reply on behalf of the Committee on the 29th of July 1966 (Copy Annexure 'D'). The Registrar thereupon passed the impugned order on the 17th of September 1966 (Copy Annexure 'E').
5. It is not necessary to recapitulate here the findings of the Enquiry Officer but some of the defects observed by the said Officer may be summarised as under:‑
(1) That there was no categorization of the members of the Society for the purposes of the transfer of 'the plots with the result that big plots had been transferred to members who belonged to Class III of the Central Government service.
(2) That the amenity areas had gradually been converted into residential and commercial plots. A plot of 5 acres reserved for a Park was first reserved for 'B' Market but after the refusal of the Government to accord approval to this proposal was converted into residential plots. Similarly an area of 20 acres reserved for Parks, open spaces and public buildings was converted into 'C' Market. The layout plan of 1965 when compared with the original, revealed that 18 Parks measuring 54,700 sq. yards had been converted into residential plots and play-grounds measuring 19,300' sq. yards and areas reserved for dispensary and hospital had also been converted into building sites with the result that amenity area was reduced only to one per cent. as compared with 25.5 % as originally planned.
(3) That many encroachments were made on the roads but the society was helpless in restricting or removing these encroachments. The rule that no one could build more than two storeys was also not strictly enforced. ‑
(4) That inefficiency was rampant in the office of the society and most of the members of the staff had reached far beyond the age superannuation but they continued to be retained in service as they enjoyed the patronage of the members of the members of the Committee. '
(5) That 1,335 residential plots and 493 commercial plots remained un-built and the rule that an allottee should complete the construction within two years was not enforced, with the result that stagnant water and rubbish became accumulated in those unbuilt plots and created conditions of extreme insanitation in the locality. The Enquiry Officer observed that a draft notice to the sub‑lessees and allottees for observance of the rules regarding construction within the specified time had been prepared on the 16th of March 1964, but had not been issued. A notice was given on the 10th 'of February 1959, to the owners of the unbuilt plots for construction within the specified time, but was not enforced, and no action was taken by the society against the delinquents.
(6) That Mr. Mustafa Khan an Ex‑Executive Engineer of the Society was allotted 1,500 sq. yards of building site but he made an encroachment on the road and nis site now measured as 1,773 sq. yards. This was regularized by the Society: It was also observed that four commercial plots were given to Mst. Saleha Khatoon, wife of the aforesaid Mr. Mustafa Khan.
(7) That Mr. Abdur Razaque, an Assistant in the Ministry of Works who dealt with the cases of the Society was enrolled as a member as a special case on 19‑4‑1961 and was given one of the choicest plots measuring about 1,800 sq. yards. Another assistant of the same Ministry Mr. Muhammad Najib was also made a member as a special case and was given. a plot.
(8), Mr. M. I. Haq son of Mr. Ehsanul Haq (a member of the Committee) was enrolled as a member of the Society although he was a student and was given two identity cards without any formal decision of the Managing Committee.
(9) Miss Kazi (now Mrs. Khurshid) was made a member although she was not actually an employee of the Central. Government and a plot was allotted to her in the first instance and then cancelled. This situation led to a reference to the Registrar whose nominee Mr. Masood Mirza held in his award dated 30‑6‑1965 that irregularities had been committed by the Committee.
(10) While 865 members were on the waiting list, the Committee added 476 new members. In some cases it was observed that the membership applications had been received after the admission of the members concerned. Out of the new members, 80 members were given plots ignoring the rights of the members who were enrolled earlier.
(11) That factions prevailed in the Society and election of the Committee could not be held because of the apprehension of breach of peace. It was apprehended that because of this disturbed atmosphere there may be untoward events on the day of the elections.
(12) That commercial, plots were transferred to those members of the Society who were employees of the Central Government and who had embarked on a regular profiteering trade in this respect, (ii) that the commercial plots were given to the members of the Managing Committee, their wives, relations and friends. Applications of other persons were ignored and certain chosen members were given even two plots. It was also mentioned that 134 commercial plots were given to non‑members and 62 non‑members were given more than one plot each at Rs. 25,per square yard.
(13) That a plot was given to an Indian national, a relative of a member of the Managing Committee.
(14) Mr. G. Moin‑ud‑Din Chishti, was allotted five commercial plots and the wife of the Secretary had also been allotted two commercial plots.
(15) A site for petrol pump was given to a relative of a member of the Committee at the rate of Rs. 25 per squares yard. In spite of the intensive efforts of the Enquiry Officer, the file relating to this case could not be traced.
(16) That the register of the members included the names of the non‑members. Each member was required to hold compulsorily at least one share but the member of shares shown in the register of members was 5,705 while the number of members as shown in the list of members as it existed in 1961 is 6,225. No list appeared to have been prepared after 1961.
(17) The Enquiry Officer also expressed his dissatisfaction about the state of the accounts in the society:
(a) He found that the figures of development charges did not tally with the area of the land actually allotted.
(b) That the figures of premium payable to the Government also required re‑conciliation. The Enquiry Officer found that the amount of premium payable to the Government was Rs. 33,12,304.00 whereas only Rs. 20,81,076.00 had been paid. In the show‑cause notice however, the difference, between the figures of the Society and that of the Government was shown as three lakhs.
(c) that there was a deficit of about Rs. 1,43,000.00 in water charges. Advance of Rs. 4,450.00 paid to William Jacks & Co. being 25 % of the price of 200 water meters order for which was placed with that Company, remained unaccounted for.
(d) No proper inventory or register of the stores had been maintained and no yearly physical check had been carried out. Dates of purchase of machinery and stores were not available and, therefore, no proper verification of the stores was possible. Asphalt worth Rs. 1,04,963.00 was purchased but in the stock its value was shown as Rs. 28,187.00. In the records relating to the year 1962‑03 value of tyres and tubes was shown as Rs. 15,536.00 but in the inventory the value of this stock was shown as Rs. 4,800.00 only.
(e) That no log book of vehicles had been maintained and it was not possible to check how many vehicles, the society owned. Bulldozer, Road Engines and Trollies belonging to Society were not mentioned anywhere in the records.
(J) That no verification could be made about furniture worth Rs. 30,593.00 and automobiles worth Rs. 40,537.00.
(g) That the Expenses on administration in the year 1964‑65 came to Rs. 1,50,000.00 and staff had been increased manifold in spite of the fact that repair work was being done by the contractors. The Enquiry Officer, however, observed that the financial position of the Society was gradually improving from 1962‑63 and efforts were being made to remove the defects under the chairmanship of the present Chairman, Mr. S. S. Jafri.
(18) That a substantial number of cases were pending against the Society on account of their in al‑administration. There were 35 arbitration references, 17 suits and 4 cases of Industrial disputes pending at the time of the report.
(19) That a nursery plot sold to Azim Khan for Rs. nine lakhs and then to the United Bank for Rs. 10 lakhs, although it could fetch about 20 lakhs if it had been sold in an open auction.
6. In reply to the show‑cause notice, the Chairman sent a detailed explanation to the Registrar. . He made a grievance of the fact that during the enquiry, the Enquiry Officer Mr. Rashid Ahmad did not associate the officers of the Committee or Com mittee members with the enquiry. He, therefore, termed it as a one‑sided enquiry. As for the other allegations he started with an averment that none of the defects pointed out by the Enquiry Officer related to the tenure of office of the present Committee. He, however, offered explanation of the various charges made in the show‑cause notice and the report. He stated that the society had no powers to punish the delinquents for breach of building regulations and it was for the K. D. A. to take action in such matters. According to him categorization of members for the purposes of the transfer of plots would have been against the very spirit of co‑operation. He also offered his comments on the allegations of favouritism in individual cases and explained that Mr. Mustafa Khan was allotted 1,500 sq. yards of building site on the 8th of February 1953, and further addition to this area was condoned on the 21st of February 1956, when a Committee nominated by the Registrar was functioning. It was also explained that Mst. Saleha Khatoon wife of Mr. M. Mustafa Khan had been allotted commercial plots in 1955‑56. As regards the failure to enforce Budding Regulations it was explained that there were genuine difficulties in the way of the Society and these could be removed only by change in legislation. It was stated that Mr. G. Moin‑ud‑Din Chishti was allotted commercial plots in 1957, when the members were encouraged to purchase plots in order to raise funds for the Society. The charge that two commercial plots bad been allotted to the wife of the Secretary was denied and as to the allotment of a plot to an Indian National it was stated that no record was available in the office of the Society to support such a charge. As to the allotment of plot to Miss K. Kazi it was explained that her name was included in the ballot for 'B' class plots by mistake. It was also stated that the site of the petrol pump had been 'transferred to the highest bidder and that nursery plot was sold after inviting tenders through press. So far as irregularities in the allotment of residential and commercial Plots were concerned it was observed that uniformity could not be preserved because circumstances continued undergoing radical changes and the Society ultimately decided to adopt the criterion of necessity -cum‑capacity rather than seniority in the matter of future allotment. It was admitted, however, that in some cases due to bona fide errors and omissions the claims of certain deserving persons were over‑looked in the past but steps were taken as soon as possible to make amends for such injustice. It was observed in this connection that:‑--
"It is also true that in a few cases exceptional treatment had to be meted out in the past to certain members and non‑members in the interest of the Society, but not for personal gain. It is an undeniable fact that every organisation, official or private, has to keep peace with persons with whom it comes into contact in the exercise of its normal functions and the least objectionable way of doing so is by extending to them certain facilities and concessions on usual terms. The percentage of such allotments, however, is quite definitely negligible."
As regards the allotment of the commercial plots it was stated that in the be dinning very few people came forward to buy them but at a later stage when the price of the commercial plots bad risen, a very keen demand for their acquisition developed. It was admitted that a very limited number of plots were allotted to such members of the Managing, Committee who had rendered conspicuous services to the Society and had not had the opportunity to acquire such plots previously and also to some deserving ordinary members. The Chairman candidly admitted that the possibility of one or two personal preferences could not be ruled out but this was done within reasonable limits and that this was "the accepted prerogative of the head of every organization." It was admitted that were difference between the Society and the Ministry of Works as to the amount shown by the Society as having been paid to the said Ministry on account of premium but it was stated that reconciliation was underway. So far as .the finding of the Enquiry Officer regarding water charges, water meters, stores and surplus and superannuated staff were concerned there was no specific denial of these allegations but it was stated that efforts were being made to improve the matters. As regards water charges it was stated that the deficit was due to clearance of heavy arrears in the past claimed by the K. D. A.
7. The learned counsel for the petitioners Mr. Waheed Faiuqi, urged the following points:‑---
(i) that the order is vitiated because no opportunity of personal hearing or of production of evidence was given to the Society at the enquiry stage,
(ii) that rule 48 under which the Committee has been superseded is ultra tires and is beyond the scope of section 71 of the Act which gave powers to the Government to frame rules. The Registrar according to the counsel had, therefore, no power to supersede the Committee as such.
(iii) that a personal hearing should have been given by the Registrar to the Committee and be should have asked them to adduce evidence in their defence,
(iv) that new grounds have been introduced in the order of supersession against which no opportunity to show cause was given to the Committee and, therefore, the order is bad on that account also,
(v) that the order is mala fide and even if rule 48 is found to be intra vises it is a colourable exercise of power with intent to prevent the election of the Managing Committee which was to beheld on the 18th of September 190, i.e. one day after the impugned order had been issued.
(vi) even if the allegations contained in the impugned order are found to be correct they do not call for the supersession of the Committee.
7. In order to appreciate the force of the contentions raised by the learned counsel for the petitioners it is necessary to examine the scheme of the Sind Co‑operative Societies Act, 1925 (hereinafter called Act) which along with the rules framed thereunder was made applicable to the whole of West Pakistan by West Pakistan Laws Amendment Ordinance VII of 1965. According to clause (b) of section 3 of the Act Committee" means the Committee of Management or other directing body to whom the Management of the affairs of a Society is entrusted. According to the bye‑laws of the Society the Committee has vast powers regarding the Management of the affairs of its society. The amplitude of powers conferred on, the Committee under the bye‑laws is indicated by Bye‑Laws Nos. 53 and 54 according to which the Committee is authorized to exercise all the powers of the Society and do all such acts and things as may be exercised or done by the society unless there is a prohibition in the statute or bye‑laws against such exercise of powers. Clause (p) of Bye‑Law 54 authorises tile Committee to do all such things as are incidental to or which the Committee may think conducive to the attainment of the objects of the Society or any of them. It would, therefore, appear that the burden of running the Society and achieving the objects for which it was founded lies squarely on the Committee subject of course td the provisions of the statute or any regulations framed by the Society in their General Meeting. The Registrar, however, sits at the apex of the whole scheme of the co‑operation. He has the discretion to refuse the registration of a Society under section 10 of the Act. He can issue a direction under section 13 (2) to the Society to call a special general meeting. Under section 16 no amendment in the bye‑laws of the Society can become valid without the approval of the Registrar. The Registrar has under section 22 of the Act power to order the audit of the accounts of the Society at least once a year. No Society can advance loan to a non‑member without a general or special order of the Registrar in this respect. There are a number of ways in which the Registrar has been equipped with powers to supervise the working of the Co‑operative Societies but it will suffice for our purposes to quote only those provisions of the Act which directly deal with the control of the affairs of Co‑operative Societies by the Registrar. Chapter VII of the Act is headed as 'Inspection of Affairs'. Section 43 with which this chapter begins reads as under:‑----
"43. Inquiry by Registrar.‑(i) 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 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 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,
(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 investi gated."
In order to enable the Registrar to use these powers effectively provision has been made under section 44 of the Act for the inspection of the books of accounts of a Society. If the Registrar as a result of an enquiry held under section 43 is of the opinion that the Society ought to be wound up he may under section 47 of the Act issue an order directing it to be wound up and when necessary may appoint a liquidator for this purpose. If this order of the Registrar is upheld in appeal which would lie to the Provincial Government under section 64 of the Act, the Registrar is authorized to cancel the registration of the Society and the Society shall be deemed to be dissolved from the rate of such order.
If it is found that any person who had taken part in the organization or Management of the society or any past or present chairman, secretary, member of the managing committee or officer of the society had misapplied or retained or become liable or accountable for any money or property of the society or had been guilty of misfeasance or breach of trust in relation to the society, the Registrar under section 50‑A, may on the application of the liquidator or of any creditor or contributory, examine into the conduct of such person and make an order requiring him to repay or restore the money or property or any part thereof with interest at such rate as the Registrar thinks just or to contribute such sum to the assets of the society by way of compensation in regard to the misapplication, retainer, misfeasance or breach of trust.
8. It would be seen that an enquiry under section 43 is a preliminary enquiry and there is no provision in the statute which may lend support to the contention raised by the learned counsel for the petitioners that this enquiry should have been conducted in the presence of the Committee because even after such an enquiry the Registrar may not have found a case for taking any action against the Society. In our view an enquiry under section 43 of the Act is a preliminary probe into the affairs of a Society and there is no warrant for saying that the Registrar or his nominee should conduct this enquiry on the pattern of a trial. The law does not contemplate that even all the stage of preliminary investigation a show‑cause notice is to be issued to the Society in respect of each item under investigation or it has to be permitted to adduct evidence in rebuttal of the material which is being collected by the Enquiring Officer. We cannot enlarge upon the provisions of the law which under subsection (4) of section 43 permits only communication of the result of the enquiry to the society. A show‑cause notice is necessary when any right or property of a party is to be affected by some proceedings but the rule of natural justice does not contemplate that a preliminary investigation ordered on the direction of an administrative authority for his own information should be held in the presence of the party concerned.
9. The learned counsel appearing for the respondent No.2 pointed out that a preliminary investigation under section 43 has been provided for in order to carry on the investigation of the affairs of a Society as distinguished from the Managing Committee and that so far as the Managing Committee was concerned the Registrar could just issue a show‑cause notice on the basis of the information with him without in the first instance undergoing the formality of a preliminary enquiry. We find force in this contention. The requirement of the rule of natural justice has been met by rule 43 which enjoins the issuance of a show‑cause notice before passing an order of supersession of the Committee but there is no compulsion on the Registrar to collect information in a particular way before making up his mind to issue a show‑cause notice. The Supreme Court held in the case entitled The University of Dacca though its Vice‑Chancellor and another v. Zakir Ahmed (P L D 1965 S C 90) that the person, body or authority concerned can obtain information in any way it thinks tit provided it gives an opportunity to the person sought to be affected to correct or contradict any relevant statement prejudicial to him, before passing an adverse order. Their Lordships quoted with approval the following passage from the case of the University of Ceylon v. Fernando ((1960) I All E R 63 I). The only grievance of the respondent in that case was that the witnesses examined against him were not questioned in his presence. The Judicial Committee observed as under:‑---
"The Vice‑Chancellor was not bound to treat the matter as if it was a trial, had no power to administer an oath and need not examine witnesses, but could obtain information in any way he thought best. It seems to their Lordships to follow that, inasmuch as the Vice‑Chancellor, when the alleged offence under clause 8 was brought to his notice, was not bound to treat the matter as a trial but could obtain information about it in any way he thought best, it was open to him if he thought fit to question witnesses without inviting the plaintiff to be present. But, while there was no objection to the Vice‑Chancellor informing himself in this way, it was undoubtedly necessary that, before any decision to report the plaintiff was reached, he should have complied with the vital condition postulated by Lord Lorebura. In Board of Education v. Rice 1911 A C 18 which, adapted to the present case, may be stated as being to the effect that a fair opportunity must have been given to the plaintiff to correct or contradict any relevant statement to his pre-judice."
10. The contention of the learned counsel regarding the vires of rule 48 was based on a reading of clauses (g) and (ga) of section 71 of the Act. We reproduce the relevant portions of section 71 here :‑
"71. (1) The Provincial Government may, for the whole or any part of the Province and for any society or class of societies, make rules to carry out the purposes of this Act.
(2) In particular and without prejudice to the generality of the foregoing power such rules may‑
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(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 all he 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."
1t was contended on the language of the ‑above two clauses that whereas clause (g) authorises Provincial Government to frame rules for the appointment, suspension and removal of the members of the Committee, clause (ga) visualises a contingency whereby following the same process all members mentioned in clause (g) of the Committee may be suspended or removed. It was, therefore, contended that the statute does not postulate the supersession or suspension of a Committee as such although it may be permissible to suspend or remove all the members individually. On this ground it was vehemently urged that rule 48 which deals which the supersession of a Committee as such is ultra vires. Rule 48 reads as under:‑
"48. (1) Notwithstanding anything contained in the bye‑laws of a society the Registrar may by order published with reasons therefore in the official Gazette, supersede the committee or 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 supersession, 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 supersession 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 supersession is in force, whichever is less.
(6) Before making an order under sub‑rule (i) 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 Band 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 or 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 meetings of the Committee.
(9) Nothing in this rule shall be deemed to affect the powers of the Registrar to cancel the registration of a society under section 47." The above rule deals with the supersession of the society or Committee as such. We may mention here that the Committee was superseded earlier in 1956 and the Supreme Court dealt with the matter in Civil Appeal No. 26 of 1957 Registrar, Co‑operative Societies, Karachi v. A. Moghni and others where it was a common ground that the Registrar had no power to supersede the Society. We are however, concerned in this case with the powers of the Registrar to supersede the Committee and we will confine ourselves to that point only. Clause (g) of subsection (2) of section 71 refers to the appointment, suspension, etc. of members whereas clause (ga) visualizes a situation where all the members of the Committee may have been suspended or removed. It is to be pointed out that clause (g) refers to the "members of Committee" which would include the singular as well as the plural. Under rule 4 (d) a Society has been empowered to make bye‑laws with regard to the mode of appointments and removal of members of the Committee and the officers, if any, and the duties and powers of the Committee and officers. Bye‑Law No. 49 of the Society does make provision for the removal of an individual member of the t Committee from office by a resolution carried out by two‑third of the votes given at a Special General Meeting. Bye‑Law No. 51 deals with the circumstances under which the office of a member of the Committee shall become vacant. The case of the removal of the committeemen as individuals has been dealt with in the bye‑laws referred to above. In view of these circumstances also it would be permissible to draw an inference from the language of clauses (g) and (ga) of subsection (2) of section 71, that these clauses invest the Government with the powers to frame rules which may authorize the supersession of a Committee as a whole. It was argued that we should not place a liberal interpretation on these two clauses and if the Legislature was at pains to envisage the suspension or removal of the members as such we should not import something which is not there and should not hold that a Committee as such could be superseded. We are not unaware of the rule of construction which says that the words of statute have to be given their primary meanings but this does not mean that we may commit the error of restricting the scope of the provision of a statute by placing an interpretation on it which is not in consonance with the object and policy of the statute. The rule of construction canvassed by the learned counsel for the petitioners will not be violated in any way if we put a construction on the words of the above two clauses which may best effectuate the intention of the Legislature. We have noticed above that the Registrar has plenary supervisory powers over the Societies functioning under the Act and can in a given case cancel the registration of a society and can impose on its members certain penalties under section 50‑A. The language of clauses (g) and (gal is quite susceptible of the interpretation that we are putting on it and is more in harmony with the policy and object of the law with which we are dealing. If the interpretation of the learned counsel is accepted the Registrar will be compelled to issue notices to each member and start separate enquiries against each one of them with the result that a Committee which in his opinion has forfeited its right to exist will continue to function during these enquiries and a situation may be possible where two or three out of 21 members may not have been found to‑ be directly responsible for any culpable act or omission and they may insist on continuing in office. This will create an absurd situation. The Committee is like a Board of Trustees and if they have failed to discharge their duties properly they fall as a whole. This is a case of vicarious liability and those who may not have participated actively in mismanagement are responsible for mal‑administration on account of their reticence.
11. The second answer to the argument of the learned counsel is contained in subsection (1) of section 71 which gives the Provincial Government vast powers to make rules to carrying out the purpose of the Act which is to facilitate the formation and working of co‑operative societies for the promotion of thrift, self‑help, mutual aid and other objects. We cannot countenance the suggestion that while the Registrar who has under various provisions of the Act power to control the constitution and working or the Co‑operative Societies is helpless in dealing with a Committee which according to him is not functioning properly and is not discharging its duties in the best interest of the Society and in accordance with the provisions of law. We, therefore, find that rule 48 is infra vires of the Provincial Government and it was permissible to frame such a rule under the general powers of rule‑making given to them under subsection (1) of section 71. We may refer here to the case of Amanullah v. Malik Muhammad Bashir and another (P L D 1966 Lah. 585). In that case it was contended that the item of "Election of Chairman" having been deleted from the Sixth Schedule to the Basic Democracies Order, 1959, on account of an amendment in section 25 of the above Order by Basic Democracies. (Amendment Act XVI of 1965), the West Pakistan Basic Democracies (Election of Chairman) Rules, 1960 had ceased to have effect because the Government after the amendment had no power to frame or enforce such rules. The Division Bench which decided the case repelled this contention and referring to the language of clause (I‑) of Article 89 which is similar to the language of subsection (I) of section 71 of the Co‑operative Act held :‑----
"However, we find that clause (1) of Article 89 confers a general power on the Government to make rules to carry out the purposes of this Order, and clause (2) of that Article is without prejudice to t1te generality of the power conferred by clause (1). In other words, the subject which may be prescribed and enumerated in the Sixth Schedule to the Order cannot be construed as being in the nature of an extensive list of the items regarding which rules can be made by the Provincial Government. The general power conferred by clause (1) would still be available to make rules with regard to those subject and items which are not 'specifically enumerated in the Sixth Schedule. Therefore, the omission of item (3), dealing specifically with the election of chairmen, from the Sixth Schedule does not have the effect of depriving the Government of the power to make rules on this subject."
12. The third contention of the learned counsel relates to the failure of the Registrar to give a personal hearing to the members of the Committee or to permit them to adduce evidence in support of their contention that none of the allegations contained in the show‑cause notice related to the period during which this Committee had been functioning. We have given above a gist of the reply of the Chairman to the above show‑cause notice arid an analysis of all the documents on record shows that:‑---
(1) There was no specific denial of the allegations contained in the report that members of the Managing Committee and their relatives had been able to secure the allotment of the commercial plots in their favour. On the other hand, it was admitted that, some members of the Managing Committee who had rendered meritorious services had being given commercial plots. It was stated at the Bar by Mr. Muhammad Halim, Assistant Advocate‑General appearing for the Registrar that commercial plots had been allotted to the following sitting members of the Managing Committee:‑
(1) Mr. M. U. Faridi,
(2) Mr. Sharafat Ali,
(3) Mr. M. A. G. Jillani,
(4) Mr. M. T. Qureshi,
(5) Mr. H. M. Anis Khan,
(6) Mr. Qamarul Huda,
(7) Mr. Kamalud Din Ansari,
(8) Mi. A. A. Jafri.
There was no denial of this assertion of fact nor any opportunity was asked for its rebuttal.
(2) That Abdur Razzaque an assistant in the Ministry of Works was specially enrolled as a member on 9‑4‑1961 and given a choice plot measuring 1,800 sq. yards which was ordinarily beyond his status.
(3) That there were a large number of old members waiting for the allotments while new members had been enrolled and a large number of them were given plots in preference to the old members.
(4) That a large number of plots were lying vacant and unbuilt and that the bye‑laws regarding the construction of houses within a period of 2 years were not being enforced.
(5) That there was no log book of vehicles and proper inventory or stock register and that a physical check of the stocks and the automobiles in the possession of the Society was not possible.
(6) That superannuated staff had been employed and that in spite of heavy expenses on the sanitary staff the contract for conservancy was given to the contractors who had made the sanitary conditions worst in the area.
(7) That a site for the petrol pump had been given to a relative of a member of a Managing Committee and that its file was not traceable.
(8) That there was a discrepancy of a substantial amount in the figures relating to the payment of premium to the Government.
(9) That there was a deficit in water charges to the tune of Rs. 1,43,000.00.
(10) That 134 commercial plots were transferred to non members whereas the bye‑laws did not permit such a course of action. It was not denied by the Chairman that if these plots had been sold in auction they would have brought much larger amounts in the. coffers of the Society.
(11) That a nursery plot was sold in the first instance to Azim Khan and then to the United Bank, thus involving the Society in litigation. There was no refutation of the allegation. that the plot would have fetched a far higher price if it had been sold by auction.
(12) That the Society was involved in litigation and there were at the time of the report about 42 cases pending.
13. The learned counsel vehemently argued that the Registrar should have asked the Society to produce evidence in support of their assertion that none of the allegations contained in the report related to their tenure of office. The learned counsel referred to Ibrahim v. Federation of Pakistan (through the General Manager, N.‑W. R. Lahore) (P L D 1957 Lah. 925) and Muhammad Ihsan Khan v. The Province of West Pakistan (P L D 1963 Lah. 295) in support of his arguments. The dictum in these cases does not apply to the facts of the present case. In the two judgments relied upon by the learned counsel, the learned Judges were concerned with the construction of the phrase "reasonable opportunity" as used in section 240 (3) of the Government of India Act. It was held in those cases that the phrase "reasonable opportunity" would include a right to produce evidence in defence. In both these cases the rules applicable to the persons concerned provided that a personal hearing should be given but none was given. In the rule governing the present case there is no provision for a personal hearing. The Chairman in his reply to the show cause notice never asked for a personal hearing nor did h ask for an opportunity to adduce evidence in defence. Therefore even if the phraseology of rule 48 had been as extensive G as that of section 240 (3) of the Government of India Act of 1935 there was no obligation on the Registrar to start as enquiry afresh and give an opportunity to the Committee to produce evidence in defence when no one 'bad asked for it. Reference may here be made to the case of Abdul Latif Niazi v. Government of West Pakistan (PLD1967SC62). This was also a service matter and one of the grievances arcade was that a personal hearing was not given to the affected officer after the issuance of the show -cause notice. The argument did not find favour with their Lordships and it was held that the requirement of Constitution was that reasonable opportunity should be given to show cause but the demand of a personal hearing after the show‑cause notice had been issued seemed to be an excessive requirement. It was observed:‑---
"The proposition that such a personal hearing should be given in every case of this kind following a show‑cause notice cannot be sustained. Mr. M. A. Zullah referred its to the case of Chief Commissioner Karachi v. Dina Sohrab Katrak P L D 1959 S C 45 where it was laid down that a haring at the stage of appeal before a departmental authority was requisite. Here the question is not of appeal and moreover, when Abdul Latif Niazi presented an appeal against his order of dismissal before a member of the Board of Revenue, he was in fact given a hearing."
We may observe here that the petitioners could have filed a revision petition before the Government under section 64 of the Act and ventilate their grievances before that forum but they have not chosen to avail of this remedy. The learned counsel referred to a large number of authorities which deal with the doctrine of natural justice. We need not refer to these authorities because they have no bearing on the facts of this case. We may, however, observe that the provision of a show- cause notice does not place any obligation on the authority concerned to ask the affected party to produce evidence in it defence in spite of the fact that it may not have asked for such an opportunity. Rule 48 requires that a show‑cause notice b, issued to the Society, that was done and a detailed reply was given by the Chairman. The Registrar was perfectly justified in drawing his own conclusions after the perusal of the reply to the show‑cause notice. Personal hearing is not a necessary requirement of the rule of natural justice. The gist of this rule is that the person affected should know the nature of allegations against him and should have an adequate opportunity to meet the allegations. In Zakir Ahmed's case referred to above it was held that requirement of natural justice must depend on the circumstances of each case, the nature of enquiry, the rules under which the Tribunal is acting and the subject‑matter that is being dealt with. Their Lordships referred to the general consensus of judicial opinion which seemed to be that in order to ensure the elementary principles of fairness the person sought to be affected must at least be made aware of the nature of allegations and should be given a fair opportunity to make .any relevant statement brought forward to his prejudice.
14. In an unreported case Criminal Appeal No. 39 of 1965, The State and others v. Qazi Khanzada a copy of which was produced before us by Mr. Muhammad Halim the learned Assistant Advocate‑General, it was held:
"The rule of natural justice does not require necessarily a personal hearing at all stages of a proceeding before an authority. In support of this position the learned Additional Advocate‑General cited Mehrab Khan v. Taj Muhammad P L D 1961 Quetta 1 in which it was held by the High Court that the Commissioner need not hear in revision the complainant who had challenged an order passed by the Deputy Commissioner rejecting his prayer for reference, of his complaint, to a Council‑of‑Elders. It was enough that his written representation had been considered and rejected. Of course, it would depend on the language of a particular statute whether the right of personal hearing should be implied or not."
We respectfully follow the dictum in the above noted cases decided by the Supreme Court and hold that a provision for a show‑cause does not necessarily impose a duty on the authority concerned to give a personal hearing to the affected party or give it an opportunity to produce defence evidence even when it has not been asked for.
15. The next contention of the learned counsel was that grounds Nos. (iv), (vi), (vii), (viii), (xi) and (xii) as given in the impugned order do not relate to any matter touched in the report or the show‑cause notice. We will for the sake of reference reproduce here these grounds:‑--
(iv) Lot of development work remains to be done while the Management instead of attending to this work is spending the Development Fund on maintenance and litigation.
(vi) The Managing Committee has not been able to take any effective action to set the things right and to rectify and reform the Management and affairs of the Society in accordance with the recommendations made in the Report of the Inquiries by Mr. S. A. Wabid Naqvi, District Co‑operative Officer on 6‑1‑1956, Inquiry held by Khan Babadur Suleman, Chief Engineer on 12‑3‑1957. Inquiry held by Mr. Ghiassuddin Ahmad, District Co‑operative Officer on 5‑6‑1956, Inquiry by the Martial Law Authority and the Inquiry held in pursuance of my predecessor's order under section 43 on 28‑2‑1966, though the Managing Committee had enough time to do ‑ so, if they had an intention to manage the affairs properly.
(vii) There has been a violation of Bye‑Law 47 (b) of the said Society and a number of Managing Committee Members hold office beyond their terms by complex manoeuvring and avoiding to hold Annual General Election.
(viii) There are group rivalries and lack of co‑operative spirit among Managing Committee Members so much so that their meetings have been disorderly and ended in fiasco and at present the Police is guarding the premises of the said Society as there is imminent danger of breach of peace, which is equal to the putting and breaking of the locks on the office rooms of the Society, by groups rival to each other.
(xi) The Managing Committee has failed to take proper interest in the affairs of the Society and exercise adequate control over its working with the result that the office employees are also aligned with one or the other rival group resulting in inefficiency, red‑tapism in the office and undue hardship to members and loss of prestige to the Society.
(xii) Rivalries between groups and factions have created an impasse which has made the holding of the meetings of the Society impossible and a situation contrary to the smooth working of the Society has been created by the Managing Committee.
16. Mr. Muhammad Halim, the learned Assistant Advocate. General, invited our attention to that part of the report at page 47 of the file where under the heading general' it is said that the expenditure of Administration during the year 1964‑65 was about Rs. 1,50,000.00 which appeared to be excessive. It is mentioned in the same para. that the number of staff employed for this purpose had not been reduce"' but had increased manifold and that the little work was being done or performed depart mentally. He also invited our attention to page 52 of the record wherein in paragraph 9 it has been stated that the energies and finances of the Society and the members are being frittered away in litigation and Court cases due to general disgruntlement among the members; owners and inhabitants of the Society. As to item (vi) it was submitted that references to 'various enquiries referred in this item may not be quite relevant but the Registrar had expressed a general dissatisfaction about the affairs of the Society comment on which had been made in detail in the enquiry report and the show‑cause notice. It was submitted that the enquiry report dated 28‑2‑1966 on which the impugned order is based had been mentioned in this head and there was no need for the repetition of the same allegations in the order. As to item (vii) it is true that the fin=ding of the Enquiry Officer was that the present Chairman had no intention to perpetuate his regime but the Registrar was within his powers to come to a different finding on the facts of the case which were before him. The subject‑matter of items (viii) and (xii) has been referred to inn the report as well as the show‑cause notice. It has been observed at page 40 of the record that factionalism and party bickerings have created vicious atmosphere to such an extent that annual General Elections could not be held as it had become a law and other problem. As to item (xi) reference was made by Mr. Muhammad Halim, Assistant Advocate -General, to page 35 of the record where the Enquiry Officer had commented adversely on the efficiency of the staff and has observed that the only excuse for their continuance is that they are the nominees of some members or other of the Managing Committee. The gist of this ground was that due to nepotism and factionalism in the Committee the efficiency of the employees had beets affected. It, therefore, cannot be said that the items referred to by Mr. Farooqi, Advocate, are new items and that the Society had no opportunity to offer any explanation with regard to these allegations. The learned counsel for the petitioner referred to the case of Rehmat Elahi v. Government of West Pakistan (P L D 1965 Lah. 112) to show that new grounds could vitiate the order. In that case some of the grounds mentioned in the order of detention were beyond the scope of the statute under which that order was issued and it was held that since some of the grounds were not relatable to the statute under which the impugned order had been passed, the order was vitiated. In the present case the grounds relate to the working of the society and the conduct of its affairs by the Committee. None of the grounds is beyond the scope of the Act or the rules thereunder and the Registrar having the supervisory powers over the Society could rake into consideration all these matters before taking the decision that the society should be superseded. The formation of the opinion and the question of the sufficiency or otherwise of the evidence entirely rests with him. The only duty cast on him is to state the grounds and to issue a show‑cause notice to the Committee before superseding it. That having been done, the High Court can interfere, only if the ground stated are not relatable to the Act, or there is lack of jurisdiction or there is a departure from prescribed procedure resulting in prejudice or the impugned order has been motivate by malice.
18. Next we come to the question of mala fides. There are no allegations of malice against the present Registrar. The enquiry had been ordered by his predecessor against whom also no allegation of a personal kind has been made. A presumption of regularity attaches to all official acts and in the absence of any allegation of malice we cannot infer any male fides against the Registrar. The only ground urged was that the annual general meeting was to be held on 18‑9‑1965 and the impugned order was made on 17‑9‑1965 with a view to prevent the new elections being held. No motive has been suggested for such an action. We have also seen that there were conflicting groups in the society and their internecine disputes had created a law and order problem. It is mentioned in clause (o) of para. 8 of the writ petition that due to the apprehension of breach of peace the District Magistrate had promulgated an order under section 144 of the Criminal Procedure Code and it was not possible to hold the annual general mating scheduled for 18‑9‑1965. This situation also contributed to tire decision at which the Registrar arrived and mention thereof has been made in ground VII of the impugned order.
19. Lastly, we may deal in brief with the argument of Mr. Waheed Faruqi, Advocate for the petitioners, that the grounds mentioned in the impugned order did not call for the drastic step of superseding the Committee. There is no force in this argument. The Administrative Tribunals are the Judges of the sufficiency of the evidence and the necessity, expediency and reasonableness of the action to be taken. The High Court in exercise of its jurisdiction under Article 98 of the Constitution cannot sit as a Court of Appeal and pronounce upon the sufficiency, quality or quantum of evidence on which the finding of an Administrative Authority is based.
20. As a result of the above discussion we find no force in this petition which is hereby dismissed. Since intricate points of law were involved we leave the parties to bear their own costs.
A. H. Petition dismissed.
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