Find a Lawyer

Civil Petition for Special Leave to Appeal No. 158 of 1969, decided on 6th October 1969.

(On appeal from the judgment and order of the High Court of West Pakistan, Lahore, dated the 27th January 1969, in Writ Petition No. 1977 of 1968).

Ss. 13 & 5 and Civil Procedure Code (V of 1908), S. 9‑Provisions of Ordinance expressly take away jurisdiction of civil Courts to adjudicate upon liability of debtor in respect of loan taken from Co‑operative Bank or Society‑Determination of Registrar under S., S cannot be interfered with by Courts.

The West Pakistan Co‑operative Societies and Co‑operative Banks (Repayment of Loans) Ordinance, 1966 completely takes away the jurisdiction of civil Courts to adjudicate upon the liability of a debtor towards a co‑operative society or a co operative bank in respect of a loan which is either unsecured or is not fully secured. The definition of "loan" in section 2 (f)(iii) of the Ordinance includes a loan which is the subject‑matter of a pending suit, arbitration proceedings, appeal or revision, whether under the Act or before any Court. Section 9 of the Civil Pro cedure Code lays down that the Courts shall have jurisdiction to try all suits of a civil nature excepting suits of which their cogni zance is either expressly or impliedly barred. The provisions of the Ordinance expressly take away the jurisdiction of civil Courts in more than one way. A fortiori as soon as information is laid before the Registrar that a loan obtained from it is not repaid by the date on which it is due for repayment the dispute is‑ with drawn from the forum of the civil Courts to the exclusive jurisdiction of the Registrar. Thereafter he alone is the judge of the liability of the borrower. Similarly, the recovery of the loan found due from a borrower is through the process issued by the Registrar and not by a civil Court.

Abdur Rashid, Senior Advocate Supreme Court (Sardar Ataullah, Advocate Supreme Court with him) instructed by Iqbal Ahmad Qureshi, Attorney for Petitioners.

Nemo for Respondents.

Date of hearing : 6th October 1969.

The petitioner‑firm seeks leave to appeal from the order of a Division Bench of the High Court declining to interfere with the determination of the Registrar, Co‑operative Societies, under section 5 (1) of the West Pakistan Co‑operative Societies and Co‑operative Banks (Repayment of Loans) Ordinance XIV of 1966, hereinafter referred to as the Ordinance, that a sum of Rs. 2,30,533.19 is owing from them to the respondent‑bank on the basis of an over draft account and directing its recovery as arrears of land revenue.

It was contended before the High Court :‑

(i) As the civil suit filed by the respondent‑bank for the recovery of the said amount was withdrawn the claim had become barred in law ;

(ii) the Registrar had no jurisdiction to determine the liability of the petitioner‑firm as the suit instituted by them for rendition of accounts against the respondent‑bank was pending before a Court of competent jurisdiction and a preliminary decree had since been passed in the suit ; and

(iii) the Registrar had illegally delegated his power to hold an inquiry under section 6 of the Ordinance to a local Commis sioner.

There is no force in any one of the grounds urged in support of the petition. The Ordinance completely taken away the jurisdiction of civil Courts to adjudicate upon the liability of a debtor towards a co‑operative society or a co‑operative bank in respect of a loan which is either unsecured or is not fully secured. The relevant sections of the Ordinance provide as under :‑

"3. Repayment of loans.‑Notwithstanding anything con tained in any other law for the time being in force or in any agreement or other instrument, award a decree of any Court, every loan outstanding for more than one year after the date when it was re‑payable, whether barred by limitation or not, in whole or in part, and every loan any instalment whereof was outstanding for more than one year after it became due, shall, unless repaid earlier, be repaid and secured in the manner provided in section 7.

4. Supply of Information to the Registrar.‑Every co operative society and co‑operative bank, through its Manager or Secretary, shall :‑

(a) when a loan obtained from it is not repaid by the date on which it is due for repayment, bring such fact, together with full details of the case and the particulars of the borrower and the surety, to the notice of the Assistant Registrar, when the amount of the loan does not exceed thirty thousand rupees, and to the notice of the Registrar, when the amount of the loan exceeds thirty thousand rupees ; and

(b) When so directed by the Registrar or the Assistant Registrar, as the case may be, within thirty days of receipt of such directions, furnish to the Registrar, as the Assistant Registrar, as the case may be, full information in respect of all cases of loans falling under section 3 required to be repaid or secured under section 7.

5. Service of the notice to the borrower.‑(1) On receipt of information under section 4 in respect of any loan, the Registrar or the Assistant Registrar, as the case may be, shall issue or cause to be issued a notice to the borrower and his surety requiring them to repay and secure the loan in accordance with the provisions of section 8.

(2) ..

6. Determination of liability when loan is not admitted.‑Where any borrower or his surety, to whose notice under section 5 is issued, does not admit the loan or any liability arising there from, such borrower or surety, as the case may be, shall within thirty days of the receipt of the notice, submit, either personally or by registered post (acknowledgment due), a written statement to that effect to the Registrar or the Assistant Registrar by whom such notice was issued or caused to be issued, and such Registrar or Assistant Registrar, as the case may be, thereupon shall cause notice to be issued to the co‑operative society, or the co‑operative bank, as the case may be, and in the case of a benami loan, to the alleged beneficiary, and shall, after making such inquiry as he may consider necessary and giving the parties a reasonable opportunity of being heard, decide the matter.

And

13. Bar of jurisdiction.‑(1) No Court or other authority shall have jurisdiction :‑

(a) to entertain or adjudicate upon any matter which the Registrar or the Assistant Registrar is empowered by or under this Ordinance or the rules framed thereunder to dispose of or determine .; or

(b) to question the legality or validity of anything done under this Ordinance or the rules framed there under by the Registrar or Assistant Registrar.

(2) No Court or other authority shall be competent to grant an injunction or other order in relation to any proceedings before the Registrar or the Assistant Registrar, or anything done or to be done by or at the instance of the Registrar, or the Assistant Registrar under this Ordinance or the rules framed there under."

The definition of "loan" in section 2 (f) (iii) includes a loan which is the subject‑matter of a pending suit, arbitration proceed ings, appeal or revision, whether under the Act or before any Court.

Section 9 of the Civil Procedure Code lays down that the Courts shall have jurisdiction to try all suits of a civil nature except ing suits of which their cognizance is either expressly or impliedly barred. The provisions of the Ordinance set out above expressly take away the jurisdiction of civil Courts in more than one way. Firstly by providing that "loan" includes the subject‑matter of any pending suit, appeal or revision. Secondly by making time‑barred debts in respect of which no suit would lie payable under the order of the Registrar. And thirdly by laying down that no Court shall have jurisdiction to entertain or adjudicate upon any matter which the Registrar itself, under the Ordinance,' is empowered to dispose or determine. A fortiori as soon as information is laid before the Registrar that a loan obtained from it is not repaid by the date on which it is due for repayment the dispute is withdrawn from the forum of the civil Courts to the c exclusive jurisdiction of the Registrar. Thereafter he alone is the judge of the liability of the borrower. Similarly, the recovery of the loan found due from a borrower is through the process issued by the Registrar and not by a civil Court. In this view both grounds Nos. 1 and 2 do not hold good.

The third ground is not open to the petitioner as the record shows that the local Commissioner was appointed at their instance. It does not, therefore, require consideration of the Court whether the Registrar was in law competent to appoint a local Commissioner for ascertaining the market value of the pledge goods sold by the respondent‑bank or not.

The refusal by the High Court to interfere with the order of the Registrar is thus not open to any exception. The petition is dismissed.

Leave refused.,

Find a Lawyer Near You

Dealing with a matter like this? Connect with a verified advocate in your city — free on SJP Lawyers Directory.