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Official Citation: 2024 LHC 3953
Court / Jurisdiction: Lahore High Court
Year of Decision: 2023
Decision Date: 2023-12-31
Parties: Niagara Mills (Pvt) Limited and others vs Punjab Cooperative Board for JUDGMENT
Ruling Summary: This decision was rendered by the Lahore High Court on 2023-12-31, officially reported as 2024 LHC 3953. In this matter between Niagara Mills (Pvt) Limited and others and Punjab Cooperative Board for JUDGMENT, the court adjudicated key questions of statutory construction, procedural regularity, and legal precedent under Pakistani law.
Core Holding: The honorable bench evaluated governing statutory provisions and judicial authorities to establish the rights of the parties, delivering the binding reasoning set out below.
Case cited as 2024LHC3953
Court Name: Lahore High Court Judge(s): Asim Hafeez Title:Niagara Mills (Pvt) Limited and others vs Punjab Cooperative Board for
JUDGMENT
Reported As: 2024 LHC 3953, PLD 2025 Lahore 79, PLJ 2025 Lahore 371 Result: Petition Dismissed Judgment
JUDGMENT ASIM HAFEEZ, J. These petitions, instituted under section 11 of the Punjab Undesirable Cooperative Societies Act, 1993 ("the Act 1993"), impugn the consolidated judgment of 01.10.2021, by the Judicial Officer, Punjab Cooperative Board for Liquidation ("the Judicial Officer"), which had annulled transaction of disposal / sale of land measuring 26-Kanals and 18-Marla situated at Chak No. 212/RB, Railway Road, Faisalabad ("the property"), and consequently ordered cancellation of three sale deeds executed in favour of the petitioners [to the extent of land measuring 20-Kanals and 08 Marlas]. Narration of facts: 2. Facts essential for deciding instant petitions are that National Industrial Cooperative Finance Corporation (NICFC) owned the property, which property became vested in Punjab Cooperatives Board for Liquidation (in short "the Cooperatives Board") by virtue of the Act, 1993. The Cooperatives Board assumed authority and acted as statutory liquidator over wound-up undesirable cooperative societies. By law, the Cooperatives Board was empowered to dispose of assets and property(ies) of undesirable societies, including the property. Funds generated through sale of assets / properties are utilized for satisfying the liabilities of undesirable societies through payments to claimants against verified claims. The Cooperatives Board embarked upon the process of public auction of the properties through advertisement. And for the information of prospective bidders, details of the properties and terms of auction were published in "Daily Jang,
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Lahore" on 05.03.2003. The property, subject matter of instant proceedings, was listed at serial 17 of the advertisement. For ease of reference the terms of auction read as follows, For the purposes of lis at hand, attempt to auction failed when single bid was received and quoted price was less than the base value of the property, procured through evaluation. No reserve price was mentioned in the advertisement but it transpired from the minutes of the meeting of 30.10.2003, that assessed value of the property was Rs.269,500,000/- and in said meeting decision was taken to get the property re-assessed, on the premise that value assessed was on the higher side. Whether the property was re-assessed or not? No details are available and nor any reference was made during hearing(s). In February 2004, Niagra Mills (Pvt) Limited (the approached the Chairman Cooperatives Board, through letter dated 18.02.2004, and showed interest in purchasing the property. And willingness matured into offer in writing for Rs.221,000,000/-, through letter of 25.02.2004, accompanied with security deposit receipt of Rs.500,000/-. 3. On 22.03.2004, evidently, bidding was arranged amongst three bidders, which exercise culminated upon offering of Rs.275,100,000/- by the first petitioner - [the `highest bid']. The highest bid was approved by the Cooperatives Board in meeting dated 24.03.2004 in favour of the first petitioner. It appeared that vide letter of 13 April 2004, first petitioner claimed to have had deposited 25% of the bid price, upon indicating accompanying instrument of Rs.41,265,000/-, who sought extension of 120 days for making payment of Rs.206,325,000/- [75% of the bid price]. No objection certificates (`NOCs') were issued on 05.07.2004 - three NOCs were issued to the nominees of the first petitioner [successful bidder]. Sale deeds, respectively in the name of the nominees, were executed on 05.07.2004 cumulatively to the extent of land measuring 20-Kanals & 08-Marlas. Record depicts that on 17th March 2008, the Cooperatives Board demanded payment of Rs.63,303,458/-, inclusive of liquidation charges - wherein it was acknowledged that sum of Rs.217,298,542/- was received till then along 2% liquidation charges. Letter indicated reference to letters addressed to successful bidders regarding some litigation against part of the property. Record showed that successful bidder tendered instrument of Rs.47,960,752/-, committing that difference, if any would be paid subject to measurement of available land. A criminal case was registered, bearing F.I.R No. 15/2014 dated 23.04.2014, against petitioners and Cooperatives Board s ex-management, which ended in acquittal of the petitioners vide judgement dated 26.03.2018 by Special Judge Anti-Corruption Faisalabad. It appears that the Cooperatives Board took possession of the land measuring 06-Kanals & 10-Marlas in or about November 2017. The Cooperatives Board, , through Secretary, brought action for seeking cancelation of alleged transaction of sale, NOCs and sale deeds of land measuring 20-Kanals & 08 Marlas, on 16.02.2018. And contemporaneously, the first petitioner also instituted suit seeking declaration and mandatory injunction and transfer of remaining land of 06-Kanals & 10-Marlas. Both the proceedings were consolidated; issues were framed, and evidence led. Judicial Officer passed the order against the petitioners. Matter is adjudicated in view of aforesaid stated facts. Submissions: 4. Learned counsel for the petitioners questioned the authority of the Judicial Officer to exercise jurisdiction on the premise that enactment conferred powers on the Cooperatives Board, which powers cannot be further delegated to the Judicial Officer. In precise, the objection is that assumption of jurisdiction by the Judicial Officer is contrary to the mandate of law. It is asserted that Judicial Officer had no authority to act as Court, in the absence of statutory sanction and that tantamount to offend Article 175 of the Constitution of Islamic Republic of Pakistan, 1973. Learned counsel banked on the doctrine of res-judicata; and elaborates that once disposal of the property by way of negotiated sale was approved by the Cooperatives Board, and NOCs were issued, followed by execution of sale deeds, transaction of sale became past and closed transaction,
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which cannot be re-opened, let alone after 14 years. In brief, principle of finality of the decision is pleaded. Learned counsel emphasized that competitive bidding took place, and first petitioner was declared as the highest bidder, whose bid was approved by the Cooperatives Board, unconditionally. Adds that factum of piecemeal payment or delay, if any, was inconsequential since the Cooperatives Board had neither transferred complete chunk of land, nor did it possess the land till 2017. And land measuring 6-Kanals and 10-Marlas is still not transferred. Learned counsel elaborated that subsequent to the execution of sale deeds, the Cooperatives Board got registered a criminal case against the petitioners and ex-management, wherein petitioners were acquitted on 26.03.2018, which acquittal is sufficient to dismiss allegations of fraudulent, collusive and deceptive sale. And, thereafter, the Cooperatives Board had no authority to seek re-opening of sale transaction, which stood finalized for all intent and purposes. It is argued that the Judicial Officer had no authority to cancel registered sale deeds, which power exclusively vests in the Civil Court and remedy is available in terms of section 39 of the Specific Relief Act 1877. Learned counsel draw support from following decisions, reported as "Telecard Limited through Authorized representative Vs. Pakistan Telecommunication Authority through Chairman" (2014 CLD 415), "Muhammad Ashraf Khan and 2 others Vs. Muhammad Khan and 9 others" (2004 CLC 1133), "Amir Jamal and others Vs. Malik Zaho0or-ul-Haq and others" (2011 SCMR 1023), "Muhammad Ashraf Tiwana and others Vs. Pakistan and others" (2013 SCMR 1159), "S.M. Waseem Ashraf Vs. Federation of Pakistan through Secretary, M/O Housing and Works, Islamabad and others" (2013 SCMR 338), "Administrator, Thal Development through EACO Bhakkar and others Vs. Ali Muhammad (2012 SCMR 730), "Nawab Syed Raunaq Ali, etc. Vs. Chief Settlement Commissioner and others" (PLD 1973 SC 236), "PCBL Vs. Zeenat Bibi and others" (2020 YLR 2421), "Director, Directorate-General of Intelligence and Investigation and others Vs. Messrs al-Faiz Industries (Pvt.) Limited and others" (2006 SCMR 129), "Shahida Bibi and others Vs. Habib Bank Limited and others" (PLD 2016 SC 995), "Mrs. Sultana Ahmed Vs. Sindh Industrial Trading Estate Ltd through Managing Director and 2 others" (2003 YLR 1760), "Punjab Cooperative Board of Liquidation through Chairman Vs. Muhammad Ilyas" (PLD 2014 SC 471) and "Muhammad Hayat and 6 others Vs. Muhammad Nawaz (1971 SCMR 414). 5. Conversely, learned counsel appearing for the Cooperatives Board submits that power of delegation is specifically provided in the statute. Further submits that principle of finality / conclusiveness is not attracted since transaction was not completed, and otherwise no finality could be claimed in wake of fraudulent sale, which vitiates everything. Submits that ex- management acted illegally and without appreciating material irregularities, which surreptitiously approved sale against ridiculously low price and on shady terms. Submits that no question of limitation arises in terms of clause (f) of section 7 of the Act, 1993. On facts, it is alleged that failure to hold public auction was fatal and once advertisement was issued there was no option for sale through private treaty, subsequently. Learned counsel cites decisions reported as "MALIK MUHAMMAD ASHRAF. VS. DIRECTOR EXCISE AND TAXATION, MOTOR VEHICLE REGISTRATION AUTHORITY, Islamabad" (2017 YLR 1136), "CH. LATIF AKBAR, FORMER FINANCE MINISTER, AZAD GOVERNMENT OF THE STATE OF JAMMU AND KASHMIR MUZAFFARABAD and 8 others. Vs. AZAD GOVERNMENT OF THE STATE JAMMU AND KASHMIR through Chief Secretary and 10 others." (PLD 2017 High Court (AJ&K) 32)". 6. Heard. Record perused. Determination: 7. Historically viewed, the episode started with approval of sale of the property through private treaty / negotiated sale and ended upon the decision of annulment of transaction of sale by the Judicial Officer - the sticking point is whether power to annual the sale vests in the Judicial Officer
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and if transaction under reference could be re-opened or re-visited by the Cooperatives Board, after lapse of 14 years. Upon hearing learned counsel following issues / questions are found relevant for the purposes of determination, within the scope of jurisdiction extended under section 11 of the Act, 1993. (1) What is the scope of jurisdiction under section 11 of the Act, 1993? (2) What is the status of the Judicial Officer? and the scope / nature of the authority extended / exercisable? (3) Whether transaction for disposal of the property could be reconsidered once sale deed(s) were executed? [Petition was submitted 14 years after grant of approval by the Cooperatives Board] - Is the doctrine of past and closed transaction(s) attracted. (4) Whether the concept of finality / conclusiveness admits an exception in liquidation matters under the Act, 1993? In and under what circumstances defence of res-judicata is not available to the beneficiary(ies) of sale, not through public auction but private treaty? (5) Whether Judicial Officer is empowered to cancel registered instruments [the sale deeds] or Civil Court(s) have the requisite jurisdiction. (6) What is the effect of order of acquittal of the accused persons - beneficiaries of the sale - in case FIR No.15/14. (7) Conclusion. [Determination of issues in sequential pattern hereby follows] What is the scope of jurisdiction under section 11 of the Act, 1993? 8. Jurisdiction conferred under section 11 of the Act, 1993 is restricted to confirm, reverse or modify the act or decision complained. Section 11 of the Act, 1993 refers to the action / decision of the Cooperatives Board, Chairman or delegatee thereof, which indicates acknowledgment of the authority of the delegatee -the Judicial Officer. It is expedient to reproduce section 11 of the Act 1993, which reads as, 11. Application to the Cooperatives Judge.- A person if aggrieved by an act or decision of the Cooperatives Board, may [including the Chairman or his delegate may within a period of sixty days from the date of the act or decision] apply to the Cooperatives Judge, who may confirm, reverse, or modify the act or decision complained against, and make such order as he may think just in the circumstances of the case. [Emphasis added] Provision though not ideally worded but intent is evident upon reference to the delegatee of the Cooperatives Board, in context of Cooperatives Board's composition prescribed in law. Jurisdiction exercised by the Co-operative Judge, being "persona designate", is not to be confused with the extent and breadth of judicial review jurisdiction. Co-operative Judge cannot determine or decide qua the constitutionality of any provision of law or declare it ultra-vires or give declaration of intra-vires, but nevertheless same is empowered to examine, adjudicate and determine the legality of any action or decision of the Cooperatives Board, including the Judicial Officer. In the context of present case, legality of transaction of sale of the property and validity of the decision of the Judicial Officer are subject matter issues and requisite jurisdiction is available. Jurisdiction assumed is in line with the parameters defined in the case of "Punjab Cooperative Board of Liquidation through Chairman Vs. Muhammad Ilyas" (PLD 2014 S.C 471), wherein section 11 of the Act, 1993 was interpreted, whereby the scope of remedy was defined, and it was held that Cooperatives Board cannot agitate or vent grievance against the order of the Judicial Officer. Whether the delegator could object to the decision of the delegatee - this question is amplified while dealing with the next issue. I proceed to decide other issues.
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What is the status of the Judicial Officer, scope and extent of authority extended / exercisable? 9. In essence, Judicial Officer is an alter-ego of the Cooperatives Board, authorized to exercise the authority of Cooperatives Board, i.e., "power of determination of rights and obligations of the persons, in the context of scheme of law - there is a rational in the nomenclature "the Judicial Officer". Evidently, the distinction between the powers retained by the Cooperatives Board, and those delegated to the Judicial Officer is the key to understanding and resolution of the controversy. The Cooperatives Board, a body corporate, is the creature of a statute - section 5 of the Act, 1993. In addition to the powers exercisable by a Liquidator, under the Cooperatives Societies Act 1925, specific powers are extended in terms of section 7 of the Act 1993 to the Cooperatives Board and its delegatee(s). Enactment extended powers to the Cooperatives Board to perform functions, discharge duties and enforce the obligations prescribed. The Cooperatives Board is empowered, by the legislature, to appoint official(s) for efficient performance of its functions under clause (r) of section 7 of the Act, 1993. Likewise, the Cooperatives Board is empowered to delegate any of its powers to any official and others in terms of clause (s) of section 7 of the Act, 1993. Appointment and delegation of powers upon the Judicial Officer is clear manifestation of the powers conferred under clauses (r) and (s), of section 7 of the Act, respectively. Argument that Judicial Officer cannot exercise powers, being delegatee of the Cooperatives Board, fails to appreciate the mandate of the law and specificity of power of delegation. It is pertinent to mention that powers conferred upon and exercised by the Judicial Officer - though an alter-ego / delegatee of the Cooperatives Board - are in the nature of quasi- judicial powers, distinguishable from the jurisdiction conferred and exercised by the Courts. Scope and extent of quasi-judicial jurisdiction is explained in the case of "Government of the Punjab through Secretary, Schools Education Department, Lahore and others Vs. Abdur Rehman and others" (2022 SCMR 25). It is reiterated that in wake of specific empowerment / authorization by the legislature to the Cooperatives Board, qua appointing an officer and to delegate powers to said delegatee / officer, doctrine of delegatus non potest delegare is not attracted. And decisions referred by learned counsel for the petitioners are distinguishable, which do not address the proposition where power of delegation was provided in the law. Power extended to the Judicial Officer, to act as delegatee of the Cooperatives Board, are not in the category of delegation of legislative powers. Notwithstanding conferment of quasi-judicial powers, the Judicial Officer cannot claim attributes and features of the Court. Performance of quasi-judicial functions by itself does not convert the Authority or Tribunal into a Court. Reference is made to the decision in the case of "Shafaatullah Qureshi Vs. Federation of Pakistan" (PLD 2001 Supreme Court 142). A forum / body exercising quasi-judicial powers is not obligated to strictly apply or follow the procedural law regime strictly - See the case of "S.A. Jameel Vs. Secretary to the Government of the Punjab, Cooperative Department and others" (2005 SCMR 126). Likewise, stringent application of principle of finality of decisions, as applicable qua the legal determinations by the Courts of law, is not attracted with respect to the actions and decisions of the Cooperatives Board - previous approval of the Board to approve sale has to be examined in the context of distinctive attributes of quasi-judicial forum(s) and Courts and exceptions thereto in the context of scope of relevant enactment. Scope of powers conferred and exercisable by quasi-judicial forum(s) are respectively defined, which vary in the context of relevant law(s) and no fixed principles, relating to finality of decisions, could be applied in omnibus fashion. Summed up, status of the Judicial Officer is that of an agent, albeit an officer authorized by the Cooperatives Board to act as its delegatee, to exercise the power of determination qua the rights claimed and statutory obligations ought to be enforced. This peculiar situation in the context of delegation of powers, though with different nomenclatures / official designation(s), was subject of discussion in the case of "Commissioner of Income-Tax, East Pakistan, DACCA Vs. Wahiduzzaman" (PLD 1965
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Supreme Court 171), where the Apex Court discussed the status of the Income Tax Officer qua the Income Tax Commissioner and observed that "the position of the Income-tax Officer is not that of Judicial Tribunal deciding the matter between two contending parties, but rather that of a person acting on behalf of the department who is charged with the duty of seeing that persons pay the amount of income-tax to which they are in fact liable". In the same vein, Judicial Officer is the delegatee of the Cooperatives Board, which is inter alia exercising delegated powers, including power to see if the transaction of sale is carried out in accordance with the law, and jurisprudence settled through judicial pronouncements in the context of sale through public auction, instead of negotiated / private treaty sales. I am unable to decipher any statutory bar or limitation qua the authority of the Cooperatives Board to reconsider its previous decision or action, in the context of allegation of fraud attributed to it. Decision or action of the Cooperatives Board, qua grant of approval in the context of present case, is a specie of reconsideration / re-assessm ent of earlier decision, in the context of specific allegations. And reconsidered opinion / re-assessm ent of the Cooperatives Board, when examined and considered by the Judicial Officer, on request, is a different ball game - this is the exercise of power of determination delegated to the Judicial Officer, which, undisputedly, is the power of the Cooperatives Board but delegated. This power of determination is acknowledged by law - in the context of reference to the delegatee in section 11 of the Act, 1993. Enactment, in absence of specific bar, envisages process of self-correction by the Cooperatives Board, internally and without outside help, when encountered with any unwarranted action or wrong decision - fraudulent sale for the purposes of these petitions. Any other interpretation, assuming principle of finality of the decision of the Cooperatives Board, would push the Cooperatives Board in blind alley - a cul-de-sac situation. The Cooperatives Board, when aggrieved of its action, likely to prejudice rights of any party, is entitled to raise question touching rights of the parties involved before the Judicial Officer; and Judicial Officer in such situation is required to exercise quasi-judicial powers, subject to the limitations and legal constraints and exceptions in the context of principles of finality, evolved, decision by decision. In terms of the ratio laid in the case of "Muhammad Ilyas" (supra), the Cooperatives Board or Chairman cannot avail the remedy of section 11 of the Act, 1993 against the order of the Judicial Officer, but an aggrieved party / person can. The delegator, i.e., the Cooperatives Board, could object to the decision of the delegatee - the Judicial Officer. This is the rational and sprit of the Act, 1993 - and letter of the law reaffirmed the legislative intent. Petitioners misconstrued the position of the Judicial Officer. Judicial Officer and the Cooperatives Board are not mutually exclusive entity(ies) in the context of division of powers, though former being the alter-ego of latter, but upon distribution, powers available with the Cooperatives Board and those delegated may be termed mutually exclusive, for the purposes of achieving the objectives and purpose of the law. Section 11 of the Act, 1993 acknowledges the status of delegatee, in the context of exercise of delegated power, that is the power of determination of rights claimed against the Cooperatives Board. There is another angle to it. How petitioners could object to the factum of delegation and assumption of jurisdiction by the Judicial Officer when the first petitioner had approached the delegatee by instituting petition seeking various reliefs. Hence, objection to the jurisdiction, post- adverse order, is devoid of bona fides and otherwise offensive to the doctrine of acquiescence / estoppel. Whether transaction for disposal of the property could be reconsidered once sale deed(s) were executed? [Petition was submitted 14 years after grant of approval by the Cooperatives Board] - Is the doctrine of past and closed of transaction(s) attracted. 10. Learned counsel for petitioners objected to the assumption of jurisdiction by the Judicial Officer on the premise that sale transaction, subject matter of sale deeds, was a concluded matter, which
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cannot be re-opened after lapse of 14 years. Argument is inherently flawed for two primary reasons. Firstly, sale approved on 22.03.2004 is still incomplete - land measuring 06-Kanals & 10- Marlas is not yet transferred. This provides continuing cause of action. Successful bidder had itself sought enforcement of part performance. Hence, plea of past and closed transaction is patently misconceived. Secondly, there is no barring provision in the Act, 1993 that restricts the Cooperatives Board from re-visiting transaction of sale upon evidence regarding collusive assistance of ex-management in supporting sale, otherwise replete with illegalities and irregularities, establishing conspicuous fraud, from start to the end. How could irreversibility of a fraudulent action or decision be blocked. Is this logical. Law, to survive, has to be logical. Option of reconsideration of fraudulent act cannot be obstructed - scope of authority of the Cooperatives Board was elucidated in previous paragraph. Fraud vitiates and nullifies sale, admitting no objection regarding limitation, finality of decision or plea of past and closed transaction. Extent of applicability of doctrine of res-judicata has to be examined in the context of peculiar circumstances and scope of duties and responsibilities assigned to the Cooperatives Board, being fiduciary-cum-trustee of the claimants [affectees of cooperative societies" fraud]. Effect of incidence of fraud, in the context of doctrine of res-judicata is examined in latter paragraphs. 11. Seriousness of the request of the Cooperatives Board, to the Judicial Officer, seeking reconsideration of transaction of sale, despite grant of approval previously by the then management, depends upon the fact that how potently, effectively and convincingly the elements of fraud and deception are established. Brief recapitulation of the facts,…
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