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Writ Petition No. 1429 of 1969, beard on 15th January, 1983.

Ss. 59, & 22‑A read with S. 50‑A‑Constitution of Pakistan (1962), .Art. 98‑Martial Law Order, 1972 (Zone A), No. 241 and Co‑operative Societies and Co‑operative. Banks (Repayment of Loans) Ordinance (XIV of 1966), S. 6‑Loan‑Repayment‑Attachment and disposal of property‑Notice‑Record showing that borrowers not served with any notice or called upon to pay amount outstanding against them Audit report being only main plank of respondent's defence, based on examination of books and account of society‑Cannot be treated as substitute of inquiry‑No material available before Assistant Registrar except audit report without any evidence warranting fixation of liability‑For fixation of liability under S. 22‑A, essential for authorities to hold inquiry to determine real character of loan‑No such inquiry having been conducted, order of recovery of loan, held, not sustainable.

(b) West Pakistan Co-operative Socities ( Repayment of Loans )ordinance (XIV of 1966)

S. 6‑Constitution of Pakistan (1962), Art: 98‑Martial Law Order, 1972 (Zone A), No. 241‑Loan‑Repayment of borrower denying his liability‑ Foundation of commencement of proceedings under M. L. O. No. 241 against him‑Determination of liability under S. 6 not made‑Condition precedent for invocation of provision of M. L. O. No. 241, held, not satisfied‑‑Petitioner making written statement and acknowledging loan long after commencement of action under M. L. O. No. 241‑Subsequent acknowledgment, held further, would not validate proceedings against him within meaning of S. 6‑Petitioner making .statement before Assistant Registrar to deposit amount‑ to avoid auction of his property‑Record suggestive that petitioner under burden and out of his keenness to save his house from being auctioned made said statement which as such loses much of its sanctity.

(c) West Pekistan Co‑operative Banks and Co‑operative Societies (Repayment of Loan) Ordinance (XIV of 1966)‑

‑‑ S. 6‑Constitution of Pakistan (1962), Art. 98‑Martial Law Order, 197 . (Zone A) No. 241 ‑ Loan = Repayment of ‑ Action under M. L. O. 241 immune from attack before High Court only if functionaries under Martial Law Order not exceeding their jurisdic tion and acting within ambit of their statutory powers‑Assistant Registrar, Co‑operative Societies acting beyond such powers, jurisdiction of High Court, held, cannot be shut out.

‑‑ Art. 98 ‑ Co‑operative Societies Act (VII of 1925), Ss. 59, 50‑A, 22‑A & 64‑Writ petition-Maintainability of‑Alternative remedy by way of appeal, held, no bar to maintainability of writ petition where impugned order passed and proceedings commenced against petitioner in excess of jurisdiction vesting in Authority.‑[Jurisdiction Writ].

Ss. 59, 50‑A, 22‑A read with Martial Law Order, 1972 (Zone A) No. 241 and Constitution of Pakistan (1962), Art. 98‑Loan Repayment of ‑‑ Recovery through auction of property ‑ Im pugned order of authority regarding recovery of loan measures against petitioner passed without determination of his liabilities Illegal‑Writ petition accepted against such order and petitioner ordered to clear remaining debt.

Raja Muhammad Mazaffar for Petitioner.

Ch. Asghar Ali for Respondents.

Date of hearing : 15th January, 1983. .

The facts of this case in brief are, that the petitioner is the Honorary Secretary and member of the Popular Co‑operative Bank Limited, Sargodha, now known as Popular Co‑operative Urban Thrift and Credit Society Ltd., Sargoda (hereinafter called the Society). The respondent‑Bank, now named as the Punjab Provincial Co‑operative Bank Ltd., Sargodha advanced some loan to the Society. The latter, on its part, advanced loan to its 19 members including the petitioner.

2. During the course of the sixth monthly audit of the account .of the Society, Conducted by a Sub‑Inspector of the Department it was found, that. amongst the borrowers, two persons namely Sheikh Muhammad Akram and Sheikh Muhamma Aslam are the sons of the petitioner and whereas two others namely Sheikh Muhammad Aslam and Sheikh Muhammad Salim are his‑ real brothers. The Auditor made a report, in this behalf in which he further stated, that the remaining 16 borrowers except three, were the close relatives of the petitioner and the responsibility of repayment of the loan rested on him. The Auditor recommended that the entire amount outstanding against the Society which thus stood at Rs. 76,844.25, inclusive of interest, be recovered from the petitioner.

3. In pursuance of this audit report, the Assistant Registrar, issued a notice to the petitioner, requiring him to show cause as to why he should not be proceeded against under section 22‑A of the Co‑operative Societies Act, 1925, for misapplication of the funds of the Society. The petitioner appeared before him and obtained an adjournment for 1‑5‑1967. However, on this date, he did not enter appearance and the Assistant Registrar on 6‑5‑1967 passed an order, holding that the sum of Rs. 76,844.25 would be recovered from the petitioner. Consequently, proceedings for its recovery as arrears of land revenue were commenced against him. He was arrested and produced before the Assistant Registrar. He paid a sum of Rs. 7,000 and asked for time for the payment of the remaining amount.

4. Seemingly, instead of enforcing the recovery under the provisions of the Co‑operative Societies Act, 1925, during the pendency of the writ petition the department chose to proceed against the petitioner, under M. L. O. 241. Accordingly he was served with the notice dated 22‑3‑1972 (Annexure R/10) and required to pay a sum of Rs. 69,844.25 then due to the Bank. As this notice went unheeded, a house belonging to the petitioner, located in Block No. 16, Sargodha City, was attached, put to auction on 15‑4‑1972 and sold in favour of the respondent‑Bark for Rs. 28,500. These sale‑proceedes were adjusted against the account of the Society and the balance is said to be still due from it.

It is‑under these circumstances that the instant writ petition was filed by the petitioner to assail the validity of the Assistant Registrar's order dated 6‑5‑1967.

5. I have heard the learned counsel for the parties and examined the record. The petitioner who is present in person, in addition to his own liability, is also prepared to clear the loan advanced in the name of his two sons and two brothers. The learned counsel for the Bank has informed the Court, that two other borrowers namely Ghulab and Dot Muhammad have already repaid the loan. As regards the remaining 12 borrowers, it is argued on behalf of the petitioner, that no demand notice as ever issued to them and they never denied their liability. The learned counsel for the petitioner, vehemently urged that the petitioner cannot be held liable for the amount due from these borrowers. He submitted that absolutely no inquiry was held to ascertain as to whether or not these borrowers were merely name lenders and thus the petitioner was not allowed to prove that he could not be burdened with the liability of others. It was argued that the report of the Auditor was not a substitute for the inquiry and thus there was absolutely no material before the Assistant Registrar to come to the conclusion that the petitioner was the beneficiary of the loan, to justify an order under section 22‑A, read with section 50‑A of the Act: The proceedings conducted by the departmental authorities during the pendency of the writ petition, resulting in attachment and disposal of the petitioner's house under M. L. O. 241 were also‑ assailed and it was urged that since the basic order, passed by the Assistant Registrar was utterly illegal, void and without jurisdiction, the entire superstructure rested thereon suffered from the same legal infirmity.

6: There 'is some force in the submissions of the petitioner's learned counsel. It is conceded that the borrowers concerned were not served with any notice and they were never called upon to pay the amount, outstanding against their names, in the record of the Society. The audit report is, however, the main plank of the respondents' defence. But this report is wholly based on the examination of the books of account of the Society and cannot be treated as a substitute for the inquiry. For saddling the petitioner with the responsibility to clear the debit standing in the names of other persons, on the ground that he was the real beneficiary of the loan, there should have been some material before the Assistant Registrar but except the audit report, there was nothing on the record. The file does not disclose that while passing the impugned order, he was possessed of any evidence, warrant ing the fixation of the liability on the petitioner. For casting such a liability on him, under section 22‑A, it was essential for the departmental authorities, to have held an inquiry to determine the real character of the loan. Admittedly no such inquiry was conducted. The impugned order, therefore, cannot be upheld.

7. It is also to be noticed that when a borrower denies his liability,) determination of such liability, in terms of section 6 of the Co‑operative Societies and Co‑operative Bank (Repayment of Loans) Ordinance, 1966 is the foundation of commencement of proceedings, under M. L. O. 241,1 against him. It is not disputed that no such determination was made. On behalf of the respondents, however, reliance is placed on the acknowledgment of his liability by the petitioner (Annexure "R/12'") before the Assistant Registrar on‑31‑3‑1972. The background of this acknowledgment, however, is that when the petitioner received the intimation, that his house was attached, he gave in writing to the Assistant Registrar that he would pay Rs. 7,00 on 10‑4‑1972 and the rest of the amount within a further period of 15 days and in case he failed to adhere 'to this commitment, his house may be put to auction. Evidently, this written statement was made by the petitioner, long after the commencement of the coercive measures under M. L. O. 241. When such measures were started against the petitioner there was no deter mination of his liability, within the meaning of section 6 of the Ordinance. The condition precedent for invocation of the provisions of M. L. O. 241 was thus not satisfied This subsequent acknowledgment, therefore, would not validate these proceedings. Furthermore, the record is suggestive of the inference, that the petitioner was under burden and out of his keenness to have his house from being disposed of through auction, he made the said statement. It thus loses much of its sanctity. . It is true that action taken under M. L. O. 241 is immune from attack before the Courts but such immunity is available only if the functionaries under the M. L. O. do not exceed their jurisdiction and act within the ambit of their statutory powers. C It is a case, in which the Assistant Registrar acted beyond such powers.

Upon the facts of this case, the jurisdiction of this Court cannot be shut out.

8. The learned counsel for the respondents who did not fined much in supporting the impugned orders, then raised another objection that the order dated 6‑5‑1967 could be challenged through an appeal under section 64 of the Co‑operative Societies Act, 1925 and as an alternative remedy was available to the petitioner, the writ petition does not lie. As the impugned order bas a been passed and proceeding commenced against the petitioner, in excess of the jurisdiction vesting in the departmental authorities, the availability on alternative remedy cannot pose a bar to the maintainability of the writ petition. The objection is untenable.

9. For the foregoing reasons, this writ petition is accepted the impugned order and all subsequent proceedings are declared to be without lawful‑authority. The petitioner shall clear the admitted liability within one month. As regards the remaining amount, it shall be open to the respondents to start fresh proceedings, including the one contemplated by section 22‑A read with) section 50‑A of the Act, in accordance with law.

10. At this stage the learned counsel for the respondents came forth with the submission that as a result of the acceptance of this writ petition, the house in dispute stands released in favour of the petitioner and in order to frustrate the recovery, he is likely to dispose of the same before the com mencement of any proceedings against him by the department. He, thus, prays that the petitioner may be restrained from disposing of the house for a period of two months, and in the meanwhile, the departmental authorities shall decide to proceed in the matter. The request made by the learned counsel is reasonable and I order accordingly. The parties are left to bear their own costs.

Al. Y. H. Petition accordingly.

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