Lawyers Directory Listing
Chat with us free on WhatsApp — tell us your city and legal matter and our team connects you with the right lawyer. No form, no fee.
[Azad J & K]
Before Abdul Ghafoor, J
KASHMIR DEVELOPMENT COOPERATIVE FINANCE CORPORATION LTD. MIRPUR (THROUGH ITS CHAIRMAN) acid another‑‑Petitioners
versus
REGISTRAR, COOPERATIVE SOCIETIES AZAD JAMMU AND KASHMIR GOVERNMENT and another‑‑Respondents
Writ Petition No. 40 of 1984, decided on 14th. June,. 1984.
‑‑S. 44‑‑Cooperative. Societies Act (VII of 1925), Ss. 47 h 64‑‑Constitutional petition‑‑Maintainability‑‑Remedy available to petitioner by way of appeal against impugned order neither efficacious Constitutional petition against said order, held, was maintainable.
‑‑‑Personal hearing‑‑Dictates of natural justice required that a person who was required to be proceeded against should be given a chance of explanation as to why action required to be taken against him should not be taken so that an innocent person might not suffer.
A I R 1935 Rang. 376 ref.
‑‑ Ss. 43 t 47‑‑Petitioner Corporation was wound up by respondent on 0allegations of mismanagement, without providing petitioner an opportunity of being heard and without communicating him result of inquiry conducted against him ‑‑Order of respondent declared to have been passed without lawful authority.
P L D 1967 Dacca 179; P L D 1968 Kar. 422 and A I R 1935 Rang. 376 rel.
‑‑‑S. 43‑‑Provisions of S. 43 of Act are mandatory‑‑If results of inquiry are not communicated to Society, proceedings taken and order passed against Society, held, would be void.
A I R 1942 Lah. 237 rel.
‑‑‑S. 43‑‑Winding up of Corporation‑‑Inquiry‑‑Respondent relying on endorsement appearing in report of Assistant Registrar and report of Process Server, urging that result of enquiry in respect of allegation of misconduct against Corporation /petitioner was endorsed to him; whereas petitioner claiming that said endorsement was a forgery to cover defect and meet objection raised by petitioner in writ petition‑ Perusal of endorsement showing that different ink was used to add endorsement and that there was no despatch number and date over endorsement and no signature of petitioners or for that matter their representative existed‑‑Contention of petitioner that result of inquiry report was not communicated to him accepted in circumstances.
‑‑‑S. 44‑‑Cooperative Societies Ordinance (VII of 1925), S.43‑ Constitutional jurisdiction‑‑Order passed by tribunal exercising exclusive and special jurisdiction cannot be quashed by way of Constitutional petition and High Court in exercise of its extraordinary jurisdiction would not interfere if Tribunal had not exceeded its jurisdiction and had kept itself within ambit of law or not misdirected itself‑‑Where mandatory provision of law or rule of natural justice violated, High Court, held, was not incompetent to examine matter.
B.A. Shaikh for Petitioners. M.S. Tariq for Respondents. Date of institution: 10th September, 1984.
This petition, as envisaged by section 44 of the Azad Jammu and Kashmir Interim Constitution Act of 1974 has been filed to challenge the order, dated 9th August, 1984 passed by respondent No. 1, whereby the petitioner (Corporation) has been ordered to be wound up.
2. The facts briefly stated are that the Kashmir Cooperative Development Bank Ltd. (hereinafter referred to be a Bank), was established in 1973. In July, 1974, all the Cooperative Banks including the Bank, were dissolved. The said Cooperative Banks were, however, given the option to convert themselves in non‑Banking societies and to take benefit of this option provided in the ordinance known as Federal Bank for regulation of Cooperative Banking Society known as Kashmir Development Cooperative Finance Corporation Limited Mirpur (hereinafter referred to be a Corporation).
3. At the time of the dissolution of the Bank there were 4500 Account Holders with credit of a sum of Rs.1,08,50,526.11 and the Sank had advanced Rs.6,90,563.7 to 315 Account Holders as O.D.
4. The Cooperation did not enjoy the powers to coerce the debtors to pay the outstanding debts and had been given only the right to submit a list of debts to respondent No. 1 with a request for the recovery of the debt and a list was accordingly submitted, to respondent No. 1 who did not recover even a penny. The Corporation however, with its own efforts recovered a sum of Rs.82,07,108 and paid this amount to the creditors‑account‑holders.
5. On 30th June, 1984, the Corporation was to pay Rs.26,43,156.71 to the creditors Account‑Holders and Rs.46,29,899 were outstanding as O.D. against the debtors Account‑Holders and there were the following main debtors who owned sufficient properties and their files were sent to respondent No. 1 on 20th November, 1978 who had taken no tangible steps to recover the debt in spite of the fact that he enjoyed the
powers of Collector:
(i) Ch. Qasim Zaffar Account No. 537. Rs.19,58,450;
(ii) Habibullah Account No. 573. Rs. 5,31,885; and
(iii) Raja Azad Khan Account No. 543. Rs.15,06,162.
5‑A. Respondent No. 1 issued a letter on April 9, 1984 whereby the Corporation was wound up and respondent No. 1 was appointed its liquidator. It was mentioned in the order that there were complaints about the working of the Corporation and the Assistant Registrar Cooperative Banks was appointed as an inquiry officer to inquire into the complaints who found those to be genuine and suggested that the Corporation should be wound up and a liquidator should be appointed.
6. The petitioners claimed that the order, dated August 9, 1984 was passed without lawful authority and it was of no legal effect for the reasons that neither the inquiry, as envisaged under section 43 of the Cooperative Societies Act of 1925 (hereinafter shall be referred to as Act), was conducted nor its results were communicated to the petitioners. The allegations about the mismanagement of the Corporation were incorrect and the petitioners who were not provided with an opportunity of being heard and who have no other adequate remedy to seek redress against the said order, have invoked the extraordinary jurisdiction of this Court to seek the relief.
7. The respondents filed objections and stated that on complaints about the working of the Corporation, an inquiry was conducted and the allegations were found correct, therefore, the Corporation was wound up. The right of appeal was available to the petitioners, therefore, this petition was not tenable.' The order has been passed by an officer in exercise of the jurisdiction vested in him, therefore, it cannot be questioned by way of a writ petition.
8. The learned counsel for the petitioners has called in question the impugned order mainly on the following points:‑
(i) That neither the inquiry was conducted nor its results were communicated to the petitioners and endorsement, dated February 6, 1984 was forged to show that the results of the inquiry were communicated to the petitioners;
(ii) that no opportunity of being heard was provided to the petitioners before passing of the impugned order; and
(iii) that the remedy of appeal provided in section 64 of the Act, is not an efficacious and adequate and in support of his contention he cited authorities reported in P L D 1961 S C 537; P L D 1964 S C 451 and 661; P L D 1967 Dacca 179; P L D 1969 Lah. 821 and P ‑ D 1959 S C 279.
9. The learned counsel for the respondents to controvert the stand taken by the learned counsel for the petitioners stated that an inquiry, as contemplated by section 43 of the Act, was conducted by the Assistant Registrar who submitted the report to respondent No. 1 and a copy of which was sent to the petitioner No. 1 as was evident from the Annexure 15‑J. The allegations that this endorsement is a forgery is false. In any case, this is a disputed matter between the parties which requires investigation, therefore, is beyond the scope of the jurisdiction of this Court. Petitioner No. 2 was fully heard before the impugned order was passed. He emphasized that the hearing of the petitioner before the order is passed is not always necessary. The remedy of appeal is available to the petitioners which has even been availed of and the appeal is pending before the Government, therefore, this petition is not tenable. Furthermore, respondent No. 1 has passed the impugned order in exercise of the jurisdiction vested in him which cannot be assailed by way of a writ petition. The authorities reported in P L D 1967 Dacca 179 and P L D 1968 Kar. 422, were cited in support of the point of view.
10. I have considered the points raised by the learned counsel for the parties, have perused the record of the case and have also studied the authorities cited at the Bar.
11. After hearing the learned counsel for the parties and studying the record of the case as well as the case‑law cited by the learned counsel for the parties, I find that the following points need determination: ‑
(i) whether the remedy of appeal provided in section 64 of the Act, against the order, dated August 9, 1984 was an adequate and efficacious remedy;
(iii) whether the petitioners were provided with an opportunity of being heard and if not, whether the hearing was not must;
(iii) whether the inquiry, as claimed by the respondents, was conducted in accordance with law and its results were communicated to the petitioners;
(iv) whether the order was passed by the respondent No. 1 in exercise of the powers vested in him and it cannot be questioned by way of a writ petition; and
(v) if the question, whether the results of the inquiry were communicated to the petitioners, or not required proof whether this Court in exercise of its extraordinary powers can do this exercise.
12. An appeal has been provided to a party or a person aggrieved of the order passed under section 47 of the Act and the petitioners, I understand, have availed of this remedy by filing an appeal before the Government and the said appeal is still pending but the question as to whether the appeal is not an adequate and officious remedy and the petitioners are entitled to seek relief by way of a writ petition, is a point of dispute between the parties and is required to be determined.
13. The objection against the maintainability of the writ petition when the right of appeal was available, was considered by the Lahore High Court in a case reported in P L D 1967 Lah. 271 and it was found that the petition was maintainable. I, therefore, hold that the petitioners are not debarred to call in question the order impugned in this petition by way of a writ petition.
14. The next point which requires determination is as to whether the parties were heard before the impugned order was passed and an opportunity of hearing was provided to them and in case, it was not done, whether the hearing was necessary, the perusal of the document placed on the record do not reveal that the respondent No. 1 after having received the report of the inquiry conducted by the Assistant Registrar have heard the petitioners personally or through any of his subordinates about the allegations of mismanagement of the Corporation or the employees of it or have given them an opportunity of hearing.
15. The dictates of natural justice required that a person who is required to be proceeded against, should be given a chance of explanation as to why the action required to be taken against him should not be taken so that an innocent person may not suffer and this was the view which was taken up by the Supreme Court of Pakistan in case reported in P L D 1964 S C 451 made the following observations:‑
"Although there is no specific provision in the Basic Democracies Order entitling the member proceeded against for removal to an opportunity to show cause, the member is entitled to such opportunity on principles of natural justice which are to be read in every enactment in the absence of a provision to the contrary. No person can be condemned without an opportunity to defend himself."
16. The Rangoon High Court while examining the jurisdiction of that Arbitrator to decide civil disputes about the Burmese Buddhist priesthood in a case titled U Phinnya and another v. U Ottama" report.‑d in A I R 1935 Rang. 376 (FB) held:‑
"I am further of opinion, apart from all technical objections, that the award could not be allowed to stand having regard to the procedure adopted by the arbitrators. To decide the case, as the arbitrators did, without giving the appellants an opportunity of being present or of presenting their defence before the tribunal, was not only contrary to the rules laid down in the Vinaya, but was manifestly a violation of natural justice that wholly vitiated the award that was made."
17. The Sind High Court no doubt took the contrary view in a case reported in P L D 1968 Kar. 422 when the action of the Registrar Co‑operative Societies taken under Rule 48 of the Co‑operative Societies Rules, 1923 was challenged, that rule does not provide that the Registrar shall hear the Committee or Society before he takes any action, therefore, the action taken by the Registrar without hearing the Committee or Society, cannot be struck down.
18. Keeping in view the principle of audi alteram partem, and the view taken up by the Supreme Court in the cases mentioned in paras. 16 and 17 above, I think, it was necessary for respondent No. 1 to provide an opportunity of hearing to the petitioners before passing the impugned order.
19. It is stipulated in section 43 of the Act that the result of the inquiry shall be communicated to the society and this provision, I think, has been legislated to enable the society to explain its position at the time, the report of the inquiry officer is taken up by the Registrar to take action so that an unjust action may not be taken and the Lahore High Court in a case reported in A I R 1942 Lah. 237 took the same view.
20. The provisions of section 43 of the Act are mandatory and in case the results of the inquiry are not communicated to the society, the proceedings taken and order passed against the society would be void. However, the parties are at variance on the point whether the result of the inquiry was communicated to the society or not. The respondents rely on the endorsement appearing in the report of Assistant Registrar and the report of the process server find urged that the result was communicated to the petitioners, whereas the petitioners claim that the endorsement was a forgery which was forged to cover the defect and meet the objection raised by the petitioner in the writ petition.
21. My dispassionate study and perusal of the said endorsement lend support to the stand taken by the petitioners. The different type and ink used to add the endorsement is not only the indication which helps me to form this opinion, the absence of despatch number and I date over the endorsement and the absence of the signatures of the petitioners or for that matter, their representative, are also the factors which persuaded me to form this opinion.
22. It is a settled proposition of law that the order passed by a tribunal exercising exclusive and special jurisdiction cannot be questioned by way of writ petition and the High Court in exercise of its extraordinary jurisdiction, do not interfere by this rule is limited to, the case where the tribunal kept itself within the ambit of law and did not exceed its jurisdiction or misdirect itself.. In the present case, the mandatory provisions of law were not complied with and the rules of natural justice were violated, therefore, the High Court is not incompetent to examine the matter.
23. As the result of the inquiry conducted by the Assistant Registrar Co‑operative Societies, was not communicated to the petitioners, and they were not provided with an opportunity of being heard before passing the impugned order, I, therefore, hereby hold that the impugned order was passed without lawful authority. Consequently, the writ petition stands accepted with costs.
Dealing with a matter like this? Connect with a verified advocate in your city — free on SJP Lawyers Directory.
🔍 Find a Lawyer