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Petitioner: (1) Syed Jarrar Ahmed & others (2) Works Cooperative Housing Society VS Respondent: Province of Sindh & others
Court Name: Sindh High Court Judge(s): Arshad Hussain Khan, Syed Hassan Azhar Rizvi Title:(1) Syed Jarrar Ahmed & others (2) Works Cooperative Housing Society vs
Province of Sindh & others Case No.: C.P.Nos.D- 2025/2008, 3787/2012 & 3964/2012 Date of Judgment:2018-09-04 Reported As: 2018 SHC 922 Result: N/A Judgment ARSHAD HUSSAIN KHAN, J. We intend to decide the captioned constitutional petitions through this consolidated judgment having similar facts and law. The brief facts out which the above constitutional petitions arise are as follows :- 2. C.P. No.D-2025 of 2008: (Syed Jarrar Ahmed & others V/s. Province of Sindh & others ) As per the averments in the petition, the petitioners are oldest members of respondent No.3 (Works Cooperative Housing Society) and as such have vital interest in fair management of the Society and its properties in accordance with the decisions and mandates of the General Body as set out in the registered Bye-laws of the Society . Among others, there existed an amenity Plot No.ST -2, Block 8, measuring approx. 3 acres, on the main University road, Gulshan-e-Iqbal, Karachi [Plot ST-2] which, according to the approved lay-out plan, was earmarked and reserved for construction of a primary school for the welfare and benefit of the members of the Society which include the petitioners. Considering the best interest and welfare of the members of the Society, the then management of the Society in the year 1986, formed a policy in the matter of allotment of amenity plots including the plots reserved for schools. In the said policy, it was decided that the school plots shall be utilized and constructed by the Society itself according to its own requirements and resources available and by raising donations. The above policy was placed before the General Body in the form of a report which was considered in the meeting of the General Body held on 24 January 1986 and was duly approved. The Plot ST-2 being on the main University road, other institutions including the respondent No.2 (M/s. City School [Pvt.] Ltd.), for purely commercial benefit, had an eye on it and had been using various tactics for acquiring the said plot, which could, otherwise, not be allotted to anybody or institution, in view of mandate of the General Body. However, in the year 1987-88, respondent No.2, acquired the allotment of the plot ST-2, through the departmental pressure, in complete disregard of the mandate of the General Body and in contravention of the bye-laws of the Society. The plot ST-2 was allotted to respondent No.2,th
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on nominal rate and also illegally without authority enrolled respondent No.2 as member, who otherwise was not eligible for such membership. Representations were made by the residents including the petitioners to cancel the said allotment, but the then management did not respond. The petitioners filed arbitration proceedings bearing ABN: Case No.33 of 1988 under Section 54 of the Cooperative Societies Act, 1925 against the Society, respondent No.2 and others challenging the said allotment. The said arbitration proceedings were contested and the Board of Arbitrators, by a Majority Award passed on 15.1.1989, allowed the application and held that the allotment of the plot ST-2 in favour of respondent No.2 was illegal and ultra-vires of the powers of the then management of the Society and was ordered to be cancelled forthwith. Respondent No.2 filed an application under Section 54-A of the Cooperative Societies Act, 1925 before the Deputy Registrar, Cooperative Societies, Karachi, which were heard along with other such applications and after hearing all the contesting parties, the Deputy Registrar Cooperative Societies, dismissed all the applications/appeals by a common order passed on 15.03.1990 and upheld the award dated 15.1.1989. Respondent No.2 against the said order of Deputy Registrar Cooperative Societies preferred a revision under Section 64-A of the Cooperative Societies Act, 1925. The Secretary Cooperation department heard the said revision and the revision filed by one M/s. Pakistan Model Foundation Ltd., who under the identical circumstances was also allotted another school plot bearing No.ST -4 Block 8, Gulshan-e-Iqbal, Karachi [Plot ST-4] by the same management of respondent No.3, and by a common order dated 12.5.1994 accepted the revision of respondent No.2 (City School), set aside the concurrent findings of the lower forum and dismissed the revision of Model Foundation and held its allotment as illegal and void. Against the said orders two constitutional petitions were filed, one by the present petitioner (members of Society) being CP No.1680/1994 and the other by the Pakistan Model Foundation being CP No.1709/1994. Both the above petitions were finally heard and disposed of by a Division Bench of this Court vide order dated 13.11.2001, whereby the orders impugned in the said proceedings were set aside and case was remanded for re-hearing the appeal under Section 56 of the Cooperative Societies Act 1925. In the meantime, Respondent No.2 (City School) filed another constitutional petition bearing No.1568/1 994 against an order/resolution dated 14.5.1994 of Respondent No.3, canceling the allotment of respondent no.2 in respect of plot ST-2 which order was withdrawn by the Society and consequently C.P.No.1568/1994 was withdrawn by the learned counsel for the petitioner in the said petition. The C.P.No.1568/1994 was disposed of by order dated 24.1.1995 as having become infructuous. Against the order dated 24.1.1995 an application under Section 12(2) C.P.C. was filed, inter alia, on the ground that the learned advocate had no authority to withdraw the petition. The said application came up for hearing on 13.11.2007 along with C.P.Nos.1680 and 1709 of 1994, when the learned counsel for M/s. City School withdrew the application under Section 12(2) in C.P.No.1568/1994 and only proceeded with the other C.P.Nos.1680/1994 and 1907/1994 wherein the remand order was passed as stated above. Against the order of withdrawal of application under Section 12(2) in C.P. No.1568/1994, the government of Sindh filed CPLA bearing No.319/2002 before the Hon?ble Supreme Court and the City School was made respondent No.5 therein. However , subsequently M/s. City School was transposed as petitioner along with the government of Sindh in C.P.No.319-K/2002 which ultimately was also withdrawn. However, after the withdrawal of Civil Petition No.319-K/2002 two separate Civil Review Petitions (CRP) were filed one by M/s. City School and the other by government of Sindh, against the said withdrawal order, which were numbered as CRP No.119/2005 and No.120/2005 respectively. These petitions came up for hearing before the Hon?ble Supreme Court on 8.2.2007 and were disposed of by consent of the parties with a direction that the revision petition under Section 64-A filed by M/s. City School shall be deemed to be pending before the Sindh Minister for Food and Cooperation who shall call for the record of the cases from subordinate officers and re-hear and re-decide the same within a period of six weeks after providing reasonable opportunity of hearing to the parties concerned. In compliance of said orders the matter was re-heard by Minister Food & Cooperation and disposed of by order dated 25.08.2008, setting aside the award and the order in appeal and accepting the revision application. However, the occupancy value of the plot ST-2 was raised to Rs.100/- per sq. yds. over and above price already paid. The petitioners challenged the said order in petition. 3. C.P. No. D-3787 OF 2012 (Works Cooperative Housing Society V/s. Province of Sindh & others). Facts as averred in this petition are that the petitioner is Co-operative Housing Society registered on 26.05.1964. The
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petitioner held its General Body meeting on 24.1.1986 wherein it was, inter alia, approved that plots reserved for schools will not be allotted to any organiz ation but shall be constructed, run and managed by the petitioner-Society from its own funds and donation. Exerting political influence, respondent No.4 (Pakistan Model Foundation Ltd.) directed an application dated 12.11.1987 to the office of the then Prime Minister of Pakistan for allotment of three amenity plots situated in the petitioner Society . Pursuant thereto, the then manag ement of the petitioner Society allotted two separate amenity plots, bearing ST-4 and ST-2, both situated on the main University Road, Karachi, [subject amenity plots] earmarked for schools, to two different entities namely , M/s. Pakistan Model Foun dation Ltd. and M/s. City School respectively . Both the above allotments were challenged before the Registrar Co- operative Societies being Arbitration Case No.33 of 1988. The said case was allowed in favour of the petitioner Society , against which both M/s. City School and Pakistan Model Foundation challenged the said order separately before the Registrar Co-operative Societies. This petition is only confined to plot of Pakistan Model Foundation [PMF]. The appeal preferred by PMF was also dismissed against which PMF preferred revision before the secretary food and cooperation Government of Sindh, after hearing revisions preferred by both the allottees, city school and PMF, set aside the award in favour of the city school whereas the allotment in favour of PMF was declared illegal and void. During the pendency of revision application of PMF the allotment in favour PMF was cancelled and an amount Rs.229818/- deposited by PMF to the Petitioner Society at the time of allotment of plot, was returned to PMF. The PMF challenged the order passed in the revision in constitutional Petition before this court which was heard and decided whereby order impugned in the said proceedings was set aside and the case was remanded to Registrar Co operative Societies to decide the same afresh. The Registrar re-heard the matter and allowed application of PMF. Being dissatisfied by the order of the Registrar Co-operative Societies, the members of the petitioner challenged the said order in revision before the Co-operation department, which was decided on 18.10.2012 whereby the revision application was dismissed. The petitioner challenged the said order in this constitutional petition. 4. C.P.NO.D-3964 OF 2012 (Syed Jarrar Ahmed & others V/s. Province of Sindh & others). This petition is filed by the members (Syed Jaraar Ahmed and others) of the Works Co-operative Housing Society on the same facts and grounds as that of Constitutional petition bearing C.P. No.D-3787 of 2012 and have challenged the orders dated 06.10.2008 and 18.10.2012 whereby the award passed in the Arbitration Proceedings were set aside. 5. Learned counsel appearing for the petitioners (Works Society and its members), during the course of their arguments contended that orders impugned in the present proceedings passed by the worthy Ministers are unlawful and in excess of the authority vested in them under the provision of Section 64-A of the Cooperative Societies Act 1925. Further argued that worthy Minister while deciding the case has failed to take into consideration the fact that very allotment of subject amenity plots to M/s. City School and M/s. Pakistan Model Foundation Ltd. [PMF] were not a voluntary act of the then Committee of the Society, but the same were acquired by exerting official pressure and rather direction from the Deputy Registrar Cooperative Societies vide letter dated 21.12.1987. Further argued that the worthy Ministers while passing the orders have completely misunderstood the authority and powers of the General Body of a Cooperative Society viz-a-viz the powers of the Committee in running the affairs of the Society. The General Body is the Supreme Body and its decisions are binding on the Committee and any decision or act of the Committee contrary to the mandate of the General Body in any manner and form is unauthorized and unsustainable ab initio. Further argued that the worthy Ministers have also failed to take into consideration Annual Report for the year ending 30 June 1985 wherein it was clearly stated that the plots reserved for schools, playground and library should not be allotted to any organization with the sole object that the Society should construct the buildings on these plots and run institutions itself. It is also argued that the worthy Ministers while passing the orders impugned have also failed to consider the fact that even the management of the City School had no funds for construction of school and were contemplating to seek financial assistance from banks, pressuring and forcing the facing parents of anticipated students seeking admission to pay Rs.3000/- to Rs.5000/- as building fund which was widely protested and agitated by the Parents. Some of the parents were even physically manhandled by the hired persons of City School owners upon which an FIR was lodged by some parents against the proprietor of City School. Whereas the PMF had not even been establishedth
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when the plot allotted to it. It is also argued that the Society always endeavors to provide all socio, religious and other activities to the members of the Society and for that purpose it had completed many projects like community centers, a complete library containing large number of Books on all important subjects with well-equipped reading room, Jama Masjid (Mosques) Baitul Mukarram and parks etc. from its own and generated funds ranging from 1998 to 2007 and are parts of annual reports of the relevant years. Construction of schools on the specified plots was also one of such projects for which large number of members, business, community , educational and philanthropists have widely assured of financial assistance. The worthy Ministers have also erred in holding that the management of the Society has not disputed the allotment of subject amenity plots. It is also argued that worthy Ministers have also failed to consider the fact that subject amenity plots were acquired by exerting pressure and directives from higher departmental functionaries and the whole process was completed in few days under such pressure and the Society was virtually left with no choice but to succumb to the pressure. It is also argued that the price of the plot intended to be used for commercial purposes and profitable intention have to be fixed in the context of the commercial value of the plot. It is also argued that doctrine of indoor management will not apply to the present case, as it is well settled that the act must intra vires and must be permitted by the constitution/bye law of the company/Society whereas suspicion of irregularity renders the doctrine inapplicable. Lastly argued that the allotment of subject amenity Plots in favour of the allottees cannot be sustained and liable to be held illegal and void / cancelled and to be reverted to the Society for utilization as per mandate of the General Body . Learned counsel in support of their stance relied upon the following case law: (i) AIR 1917 PC (56) Pacific Coast Coal Mines Limited and others V . Arbuthnot and others (ii) AIR 1957 KERALA 97 Varkey Souiar V . Keraleeya Banking Co. Ltd., Thiruvalla (iii) AIR 1957 ALLAHABAD 31 1 Lakshmi Ratan Cotton Mills Co. Ltd. Kanpur V . J.K. Jute Mills Co., Ltd Kanpur (iv) (2010) 1 1 Supreme Court Cases 373 MRF LIMITED V . MANOHAR P ARRIKAR AND OTHERS . (v) 2005 YLR 2423 BAHADUR YAR JANG COOPERA TIVE SOCIETY LTD. V. Malik MUHAMMAD SALIM and others. (vi) 2006 CLC 342 Dr. AFTAB SHAH v. PAKIST AN EMPLOYEES COOPERA TIVE HOUSING SOCIETY LIMITED and 5 others (vii) 2008 CLC 573 IQBAL HUSSAIN v . PROVINCE OF SINDH and others. (viii) 2008 SCMR 105 IQBAL HUSSAIN v. PROVINCE OF SIND H through Secretary , Housing and Town Planning, Karachi and others (ix) 1994 CLC 2214 TAJ MUHAMMAD v. TOWN COMMITTEE, FATEHJANG through Chairman and 3 others (x) 2015 SCMR 456 ALI AZHAR KHAN BALOCH and others v . PROVINCE OF SINDH and others 6. Conversely , learned counsel for the City School during the course of his arguments has contended that the order passed by the worthy Minster is well reasoned and in accordance with law and as such the same does not warrant any interference by this court in constitutional jurisdiction. It is also contended that the Works Co operative Housing Society has not preferred any petition against the order dated 25.08.2008 passed by the worthy Minister therefore, the same cannot be challenged by the members of the Society. Further contended that the petition involves controversial and disputed questions of facts which cannot be resolved in a constitution petition. It is also contended that the M/s. City School enjoys the esteem reputation with respect to Education Institution which is providing high standard education and having 100s of branches in cities across Pakistan and caters to over 50,000 students approximately and also affiliated with the foreign institutions which proves the standard of education of City School. Further contended that on 08.02.1988, the Society allotted to M/s. City School an amenity Plot bearing No.ST-2, Block 8, Gulshan-e-Iqbal, Karachi (plot in question) which was reserved by the Society for school purposes. The City School made all the requisite payments as per rate fixed by the Society and as per their prescribed rate for the plot in question and in pursuance thereof the possession of the plot in question was handed over along with site plan of the plot with additional terms and conditions as imposed by the Society to protect the interest of the members of the Society. It is also contended that prior to the allotment of the plot in question, several meetings were held between the management of City School and the Society where different terms and conditions were negotiated and it was agreed that the City School, besides to include three (3)
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members of the Society in the management of the proposed school, will grant 50% concession to the Children of the members of the Society/local residents on 10% reserved seats to be allocated for members of Society/local residents of the Society. The construction feasibility report was also submitted to the Society. It is further contended that prior to the allotment of plot in question, the same was lying vacant for more than 19 years (since 1969) for obvious reasons that the Society had neither the resources to construct a school nor had the desired expertise to run the same since it is highly skillful job. That even otherwise it is not the general practice of the cooperative societies all over the country to construct schools by themselves and it is established practice that school plots are being allotted to various educational institutions for construction and management of schools. It is also contended that nowhere in the bye-laws it is mentioned that Society shall be run with the decisions and mandates of the General Body, however it is the elected Board of the Directors who enjoy the supreme power and work accordingly in the best interest and welfare of the Society. The general body has no authority to cancel any allotment, which was validly made by the Managing/Executive Committee. It is contended that under Clause 45 of the Bye Laws of the Society the Board of Directors of the Society is exclusively entitled to deal with issues such as allotment of land. Further contended that clause 45 of Bye laws makes it clear that the Board of Directors has the power to allot the plot in question to the City School notwithstanding the restrictions, if any, placed by the purported resolution dated 24.1.1986 of the general meeting. It is contended that the allotment of plot in favour of City School cannot be questioned on the grounds that the directors of the Board had outlived their term as under the bye laws No.51 of the Society any act done by the Board of Directors shall be valid not withstanding that it is subsequently discovered that any of the directors were disqualified. It is also contended that the allotment of the plot in question in favour of City School is protected by the indoor management as the same was in accordance with the bye-laws of the Society. It is also argued that the order impugned in the present petition was passed by the worthy Minster for Food and Cooperation pursuant to directions of the Hon?ble Supreme Court in its order dated 08.02.2007 whereby case was remanded with the direction to the worthy Minister to re-hear and re-decide the revision petitions of the petitioners within a period. Consequently, the Minister Cooperation heard the revision application of the city school and allowed the same with the direction to deposit further amount of Rs.100/- per sq. yds., over and above the amount already paid by it to the Society . In compliance with the order of the Minister Cooperation the City School vide its letter dated 29.08.2008 deposited an amount of Rs.1,404,400/- vide Pay Order No.POSFK0066913 dated 29.08.2008. Lastly , argued that in view of the above petition is not sustainable and as such the same is liable to be dismissed. Learned counsel in support of his arguments has placed reliance on the following case law: (i) 2000 SCMR 506 Messrs CANAL BREEZE COOPERA TIVE HOUSING SOCIETY LIMITED v. AGRICUL TIRAL AND TRANSPOR T DEVELOPMENT CORPORA TION (PVT .) LIMITED (ii) 2006 SCMR 178 PAKIST AN DFENCE OFFICERS? HOUSING AUTHORITY , KARACHI v. MUNIR AHMED GHULAM MUST AFA AKHT AR. (iii) PLD 1990 SC 504 Syed ALI SHAH v . ABDUL ASGHAR KHAN SHER WANI and others. 7. The plea of M/s. Pakistan Model Foundation Ltd. [PMF] in the cases and the submissions of learned counsel appearing in its behalf are that the petitions are based on factual controversies and are in the nature of appeal and as such, not maintainable and are liable to be dismissed. Further stated that the Award dated 15.01.1989 passed by Registrar Nominee in favour of the members of the Society was rightly set aside by the appellate forums as the same was passed without considering the basic merits of the case. Further stated that amenity plot viz. ST-4, Block-8, Gulshan-e-Iqbal, Karachi [Plot ST-4] was allotted by the then management of the petitioner Society to PMF after adopting all requisite formalities and this fact was not considered while passing the Award dated 15.01.1989, however, the same facts were considered in the orders subsequently passed under Section 56 and 64-A Cooperative Societies Act, 1925. Further stated that the Works Co operative Society prior to the filing of present petition (CP No. 3787 of 2012) has never agitated the issue of allotment in favour of PMF as the ABN case was also filed and proceeded by the members of the Society (petitioners in CP No. 3964 of 2012), wherein Society favoured the stance of the PMF, however, in the present petitions the Society have taken contradictory stand from that of its earlier stand and are denying what had been stated on oath earlier. Further stated that the
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plot ST-4 was allotted to PMF for establishing a school on the basis of the approval from the Managing Committee of the Society vide Minutes dated 26.12.1987 and allotment order dated 9.1.1 988 and possession was also delivered to PMF on payment of cost of land and Masjid Fund plus Est. Charges, Admission Fees and the First and Second Installment of share money . Further stated that a cooperative Society is a body corporate under Section 23 of the Cooperative Societies Act, 1925 and being a continuing body the present management should honour the decisions of the previous management or should take appropriate legal action at the appropriate time against its own management rather to blame the allottee [PMF] that too after elapse of considerable period. No such legal action was ever initiated against the said previous management and therefore through a legal process the allotment was made to PMF. Further stated that the Society cannot deny the title of PMF in respect of plot ST-4 as the same person who signed the report and the minutes dated 24.1.1986, that is, Muhammad Usman Khan, Secretary , issued allotment order , site plan and possession letter in favour of PMF. The Society has also issued permission to grant lease in favour of PMF and therefore there is no reason at this stage to challenge the veracity of the title of PMF, more particularly in view of the fact that Society has never challenged the allotment or initiated any case against the PMF earlier . Even otherwise the allotment is final and cannot be cancelled or withdrawn even if any disqualification is suffered by any director of the Society , the resolution passed will remain in force and effective and cannot be annulled as it is protected under Bye-law No.51 of the Society . It is also stated that the permission of the lessor is obtained particularly when an amenity plot is allotted therefore the application was routed through the concerned authority .…
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