Legal Principle & Question Decided

Ruling Summary: This decision was rendered by the Sindh High Court on 2024-11-02, officially reported as 2024 SHC 1250. In this matter between Mrs. Shamim Barlas, Altaf Hussain, Fayyaz Hussain & Others and Al-Habib Cooperative Housing Society & another, Mst. Badrunnisa & another, Allahabad Cooperative Housing Society Limited & Others, 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.

Full Judgment Text & Judicial Ruling

Court Name: Sindh High Court Judge(s): Muhammad Abdur Rahman Title:Mrs. Shamim Barlas, Altaf Hussain, Fayyaz Hussain & Others vs Al-Habib

Cooperative Housing Society & another, Mst. Badrunnisa & another, Allahabad Cooperative Housing Society Limited & Others Case No.:Suit No.424 of 2006, Suit No.1491 of 2015, Suit No. -1133 of 2021, Suit No.197 of 2022, Suit No. 604 of 2022 Date of Judgment:2024-11-02 Reported As: 2024 SHC 1250 Result: Order Accordingly Judgment

ORDER MOHAMMAD ABDUR RAHMAN, J. By this common order I will be deciding a preliminary issue that was settled in each of these Suits to consider as to whether or not each of these suits are to be transferred to the "Special Court for Cooperative Societies" constituted under Section 117 of the Sindh Cooperative Societies Act, 2020 (hereinafter referred to as the "Act, 2020") read with two notifications issued by the Government of Sindh as hereinunder: Karachi, dated the 03 August. 2021. NOTIFICATION No.S.JUDL:4-1/2021:- Pursuant to the concurrence of the Hon'ble Chief Justice, High Court of Sindh and with the approval of Government of Sindh, the following Courts of Senior Civil Judges/Assistant Sessions Judges are hereby specified to be "Special Courts for Cooperative Societies" to try the offences under the Sindh Cooperative Societies Act, 2020, with immediate effect:- Sr #Division Court Specified 1. Karachi Division 5th Senior Civil Judge/ASJ. Karachi West 2. Hyderabad Division 5th Senior Civil Judge/ASJ. Hyderabad 3. Sukkur Division 2nd Senior Civil Judge/ASJ. Sukkur 4. Mirpurkhas Division 3rd Senior Civil Judge/ASJ. Mirpurkhas

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5. Shaheed Benazirabad Division 1st Senior Civil Judge/ASJ. Shaheed Benazirabad 6. Larkana Division 4th Senior CivilJudge/ASJ. Larkana

ALI AHMED BALOCH LAW SECRETARY........ Karachi dated the 9th August, 2021 NOTIFICATION No.S.JUDL:4-1/2021: In continuation and partial modification of this department's Notification No.S.JUDL:4-1/2021/109 dated 03.08.2021 the specified courts under the said Notification for conducting trial of offences under the Sindh Cooperative Societies Act 2020, shall also try civil disputes as mandated under the said Act and the rules made thereunder. ALI AHMED BALOCH LAW SECRETARY" A. The Suits 2. The proceedings in each of the Suits are summarised as hereinunder: (i) Suit No.424 of 2006 3. This Suit has been maintained by the Plaintiff claiming an allotment to Plot No.B-22, Sector 8A/1, Al-Habib Cooperative Housing Society Limited, admeasuring 400 square yards. The Plaintiff contends that despite this property being allotted to him, the Defendant No.2 was not put into possession of it by the Al-Habib Cooperative Housing Society Limited and in consequence of which a statutory arbitration was held and which was adjudicated in favour of the Plaintiff. He contends that thereafter Execution No.33 of 2003 was filed in the Court of Senior Civil Judge, Malir and on which execution an order was passed that possession of property was to be handed over to the Plaintiff. It is contended that despite such an order, possession was not handed over to the Plaintiff and on account of the loss suffered thereon, the Plaintiff seeks damages in the following terms: a. Suit may be decreed for Rs.100 Millions severally and jointly against the Defendants with 14% markup from the date of denial of possession of Plot. b. Cost of the suit may please be awarded. c. Any other relief may deem fit." The Defendant No. 1 has maintained CMA No. 13832 of 2020 being an application under Order VII Rule 11 of the Code of Civil Procedure, 1908 contending that the Plaint is liable to be dismissed as compliance of Section 70 of the Cooperative Societies Act, 1925 was not made before the institution of this Suit and also that as the matter was adjudicated in Arbitration proceedings under Section 54 of the the Cooperative Societies Act, 1925 that this Suit is barred under Section 11 of the Code of Civil Procedure, 1908. (ii) Suit No.1491 of 2015 and Suit No. -1133 of 2021: 4. Suit No. 1491 of 2015 has been filed in respect of Plot No. A-57, Allahabad Cooperative Housing Society Limited, Block-13, KDA Scheme No.24, Gulshan-eIqbal, Karachi, admeasuring 200 square yards located in Allahabad Cooperative Housing Society Limited. The Plaintiff in this Suit claims to be the owner of this property and is in a dispute over it's ownership with the private Defendant No.1 and maintains the following prayer: DECLARE: That the Plaintiff is the owner of "Residential Plot" bearing No. A-57 (Category "A"), admeasuring Two Hundred (200) square Yards, or thereabouts, situated in Allahabad Cooperative Housing Society Limited, located in Block No.13 of KDA Scheme No.24, Gulshan-e-Iqbal, Karachi, with construction thereon; ii. (In furtherance of "i") Declare that the Defendant No. 1 has no rights(s) interest(s), and/or entitlement(s) as against "Residential Plot" bearing No.A-57 (Category "A"), admeasuring Two

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Hundred (200) Square Yards, or thereabouts situated in Allahabad Cooperative Housing Society Limited, located in Block No 13 of KDA Scheme No. 24, Gulshan-e-Iqbal, Karachi; Declare that the "Sale Agreement" dated 17.02.1991 and "Sale Deed" dated 17.02.1991 executed, and registered, in favor of the Defendant No.1 are forged, fabricated. Consequently, this Hon'ble Court may be pleased to cancel the "Sale Agreement" dated 17.02.1991 and "Sale Deed" dated 17.02.1991 executed, and registered, in favor of the Defendant No.1, and deliver up the same; GRANT: iv. (Pending the present proceedings and the trial) A Permanent Injunction restraining the Defendants, and / or any other person(s) acting under them, through them, and / or on their behalf, from creating any third party interest(s) on "Residential Plot" bearing No. A-57 (Category "A"), admeasuring Two Hundred (200) Square Yards, or thereabouts, situated in Allahabad Cooperative Housing Society Limited, located in Block No. 13 of KDA Scheme No. 24, Gulshan- e- Iqbal, Karachi, with construction thereon; V. (In furtherance of "iv") A Permanent Injunction restraining the Defendants, and/or any other person(s) acting under them, through them, and / or on their behalf, from dispossessing the Plaintiff from "Residential Plot" bearing No. A-57 (Category "A"), admeasuring Two Hundred (200) Square Yards, or thereabouts, situated in Allahabad Cooperative Housing Society Limited, located in Block No. 13 of KDA Scheme No. 24, Gulshan-e-Iqbal, Karachi, with construction thereon" 5. The Plaintiffs in Suit No.-1133 of 2021 claim a 1/31d undivided share in Plot No.A-57 Allahabad Cooperative Housing Society Limited, Block-13, KDA Scheme No.24, Gulshan-e-Iqbal, Karachi, admeasuring 200 square yards. The Plaintiffs in this suit claim to have purchased the 1/31d undivided share in that property from the Plaintiff in Suit No. 1491 of 2015 through a registered Conveyance Deed. They also maintain a claim as against Defendant No.4 and seek following relief: "... i. Declare that the Plaintiffs No.1, 2 and 3(i) to (v) are respectively the owners of 1/3rd of "Residential Plot" bearing No.A-57 (Category "A") admeasuring two hundred (200) square yards, or thereabouts, situated in Allahabad Cooperative Housing Society in Block No. 13 of KDA Scheme No. 24, Gulshan-e-Iqbal, Karachi and the ground plus two floors structure constructed thereon; ii. Declare that the Defendants No. 3 and 4 have no rights, interest, and/or entitlement as against "Residential Plot" bearing No.A-57 (Category "A"), admeasuring two hundred (200) square yards, or thereabouts, situated in Allahabad Cooperative Housing Society Limited, located in Block No.13 of KDA Scheme No. 24, Gulshan- e-Iqbal, Karachi; iii. Declare that the Sale Agreement dated 17.2.1991 and Sale Deed dated 17.2.1991 executed, and registered, in favour of the Defendant No.4 is forged and fabricated; CONSEQUENTLY iv. Cancel the Sale Agreement dated 17.2.1991 and Sale Deed dated 17.2.1991 executed, and registered, in favour of the Defendant No. 4, and deliver up the same; v. A Permanent Injunction restraining the Defendants, and/or any persons acting under them, through them, and/or on their behalf, from creating any third party interest(s) on "Residential Plot" bearing No. A-57 (Category "A"), admeasuring two hundred (200) square yards, or thereabouts, situated in Allahabad Cooperative Housing Society Limited, located in Block No.13 of KDA Scheme No. 24, Gulshan-e-Iqbal, Karachi and the ground plus two floors structure constructed thereon; vi. A Permanent Injunction restraining the Defendants, and/or any persons acting under them, through them, and/or on their behalf, from dispossessing the Plaintiffs from "Residential Plot" bearing No A-57 Category "A"), assuring two hundred (200) square yards, or thereabouts, situated in Allahabad Cooperative Housing Society Limited, located in Block No. 13 of KDA Scheme No. 24, Gulshan-e-Iqbal, Karachi and the ground plus two floors structure constructed thereon; vii. Grant any other relief(s) may be deemed necessary, appropriate, and/or essential in the given circumstances of the case, and Cost of the proceedings.""

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(iii) Suit No.197 of 2022 and Suit No.604 of 2022 6. Suit No. 197 of 2022 has been instituted by the Banglore Cooperative Housing Society Limited as against the Defendant No.1 in respect of Plot No.26, Blocks No. 7 and 8, Banglore Cooperative Housing Society Limited, admeasuring 1000 square yards claiming that the property has remained undeveloped for 70 years and is therefore, pleading that as the Defendant No.1 had failed to construct on the said property, execute a 99 years lease or also pay non-utilization fee, it had on 4 September 2021 validly cancelled the title of the Defendant No. 1 to the property . The Plaintiff i.e. Banglore Cooperative Housing Society Limited maintains the Suit seeking the following relief: " To declare that the Defendant No.1 has failed to utilize the Suit Plot i.e. Phot No.20 Bangalore Town, measuring 1000 Sq. Yds. situated in Bangalore Cooperative Housing Society Ltd, Karachi as per the terms of allotment and Sub-License No.2. (a) To declare that the Plaintiff has rightly cancelled the suit Plot through its cancellation letter. (b) Defendant be restrained from transferring the possession to any other party and to use other than residential purpose of the Suit Plot. (c) Direct the Defendants to handover peaceful vacant possession of the suit Plot to the Plaintiff Society and if fail to handover, the Nazir may be appointed to take over the physical possession of the suit plot and hand over to the Plaintiff. (d) To pass order to appoint the Nazir of this Honourable Court as Commissioner to inspect the site and submit report as to the present position of the Suit Property. (e) Grant any other relief or relief(s) as this Hon'ble Court may deem fit and proper in the circumstances of the case. (f) Grant the costs of this suit." 7. Suit No. 604 of 2022 has been maintained by the Plaintiff as against the Banglore Cooperative Housing Society Limited impugning the cancellation of the allotment made to the Plaintiff for Plot No.26, Blocks No. 7 and 8, Banglore Cooperative Housing Society Limited, admeasuring 1000 square yards. The Plaintiff in this suit contends that the decision of the Society to cancel the allotment is illegal and seeks the following reliefs: (i) Cancel the Cancellation letter dated 22.01.2022 issued by the Society whereby the transfer of the Suit Property in the name of the Plaintiff was cancelled; (ii) Declare that the Defendant No.1 has no authority to charge or claim any non-utilization fee from the Plaintiff and therefore any such claim is unlawful, illegal and in violation of the Plaintiff's fundamental rights (iii) Declare that the non-utilization fee being charged at the rate of Rs.2000 per sq yards is unreasonable, disproportionate, unlawful, exorbitant and discriminatory and therefore liable to be struck down. (iv) Permanently restrain the Defendants, their representatives, employees or assigns from allotting or transferring or creating any third party interest in the suit property and further from dispossessing the Plaintiff from the suit property. (v) In the meantime, Direct the Defendant to issue NOC to be submitted to SBCA for the construction of the Plaintiff's house upon the suit property; (vi) Costs of the suit; (vii) Any other additional/alternate relief as this court may deem fit and appropriate" B. Arguments regarding Jurisdiction of this Court 8. Mr. Muhammad Basim Raza advanced arguments. He contended that the High Court of Sindh at Karachi possessed the subject, pecuniary and territorial jurisdiction to adjudicate the captioned Suits and that neither the jurisdiction conferred on the "Cooperative Courts" referred to in Section 73 of the Act, 2020 nor the "Special Courts for Cooperative Societies" created under Section 117 of the

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Act, 2020 ousted the jurisdiction of this Court to the extent of the causes of action of the captioned Suits. 9. He contended that under Section 9, of the Code of Civil Procedure, 1908, Civil Courts are permitted to entertain all kinds of civil disputes except where the Courts jurisdiction is ousted either expressly or by "implied necessity". He contended that the causes of action of each of the captioned suits and the prayers sought thereunder relate to the Plaintiffs rights to property and as such are suits of a civil nature envisaged under Section 9, of the Code of Civil Procedure, 1908. 10. Regarding sections that might possibly expressly oust the jurisdiction of this Court under Section 9 of the Code of Civil Procedure, 1908, he said that after examining the provisions of the Act, 2020 he was of the opinion that while Section 36, Section 70, Sub-Section (1) of Section 104 and Section 116 of the Act 2020 were in the nature of ouster clauses, however, as they did not envisage a complete ouster but rather a partial ouster of the jurisdiction of civil courts, the subject matter of a dispute that was not covered in each of those sections would therefore be within the jurisdictional competence of civil courts to adjudicate. He clarified that there was, however, no provision in the Act, 2020 which expressly ousted the entire jurisdiction of a Civil Court under the provisions of Section 9 of the Code of Civil Procedure, 1908. 11. He elaborated that as the Act, 2020 itself contained four ouster provisions this was by itself a sufficient indication of the legislative intent for only a partial ouster of a court exercising jurisdiction under Section 9 of the Code of Civil Procedure, 1908 and which were nevertheless contradicted by references in the Act, 2020 to such ouster only being in respect of the "business of a cooperative society" or orders and decrees which could be issued by a "Court or a Judge made for special cause" in Sub-Section (2) of Section 41 of the Act, 2020 or by a "Civil Court" in Sections 76 and 96 of the Act, 2020. 12. He contended that if this Court came to conclusion that the jurisdiction of the "Special Court for Cooperative Societies" extended to adjudicating "disputes" material to the Act, 2020, he maintained that the causes of action that are to be adjudicated in each of the Suits fell within the residual part of the ouster provisions of the Act, 2020 and hence each suit was maintainable before this Court. 13. He relied on a principle of interpretation of statutes wherein it has been considered that the provisions contained in a statute ousting the jurisdiction of court of general jurisdiction is to be construed very strictly and unless the case fell within the "letter and spirit" of the ousting provision, it would not be given effect to. Relying on this principle he contended that the extent of the scope of each of the "ouster" sections as contained in the Act, 2020 were summarised as hereunder: (i) Section 36 of the Act, 2022 only ousted the jurisdiction of a "Court of justice" insofar as the dispute pertained to the attachment of a member's share or interest in the capital of a society or provident fund; (ii) Section 70 of the Act, 2022 as it began with a saving clause expressed in the terms "save in so far as is expressly provided in this Act," presumed situations where a civil court could exercise jurisdiction over causes of action arising under the Act, 2020 and that to only ousting the jurisdiction of a "Civil Court" in matters covered under Chapter X of the of the Act, 2022 or in respect of winding up or dissolution of a society; (iii) Sub-Section (1) of Section 104 of the Act, 2022 only ousted the jurisdiction of civil courts in respect of disputes under Section 78 of the Act, 2022 i.e. sale of property under distrait or liquidation of a society; and (iv) Section 116 of the Act, 2020 only ousted the jurisdiction of a court in respect of any matters that could have been disposed of or determined by the Government, Registrar, officer or liquidator, a society, a financing bank, a cooperative bank or any other officer or person of the Society empowered by or under the Act 2020 but as none of the aforementioned forums had been

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conferred jurisdiction under the Act, 2020 to adjudicate the causes of action of the captioned Suits or grant the prayers sought therein, Section 116 would also not oust the jurisdiction of this Court. 14. Regarding whether the requirement of a notice being issued under Section 115 of the Act, 2020 was mandatory or directory, Mr. Raza contended that the legislative intent and scope of the ouster provisions contained in Section 116 of the Act, 2020 should be considered in juxtaposition with the legislative intent and scope of Section 115 of the Act, 2020 in respect of the issuance of a notice in suits prior to its institution. Relying on the decision reported as Super Builders vs. Gulshan-e-Faisal Cooperative Society[1] he stated that the decision determined that the legislative intent and scope of Sections 70 and 70A of the Cooperative Societies Act, 1925 (hereinafter referred to as the "Act, 1925"), which sections are pari materia to Sections 115 and 116 of the Act, 2020, held that the object of the notice in suits was to provide an opportunity to the forums referred to in Sections 70 and 70A of the Act, 1925 and during the notice period, examine the claims and potentially settle disputes before the contesting parties go into litigation. The Court further held that as the Registrar of Societies under Section 54 of the repealed Act, 1925 were empowered to adjudicate some nature of civil disputes, as such, this Court had deemed a notice in suits a mandatory condition under the repealed Act 1925. 15. By contrast, Mr. Raza contended that the Registrar under the Act, 2020 was not entrusted with the same jurisdiction, as such, notice in a suit thereunder can at best be deemed a directory condition insofar as the captioned Suits are concerned, and consequently the non-compliance thereof would not affect the maintainability or validity of the captioned Suits before this Court. Mr. Raza contended that this was a harmonious interpretation of Sections 115 and 116 of the Act,2020 and which would not make the condition of notice in suits a redundancy inasmuch as notice in suits relating to issues, where a forum under Section 116 of the Act, 2020 was conferred with the power to determine a dispute, would continue to operate as a mandatory condition. 16. Regarding the implied bar contained in Section 9 of the Code of Civil Procedure, 1908 by the creation of a jurisdiction to resolve "all disputes conferred on a "Cooperative Courts by Section 73 of the Act, 2020 and the jurisdiction of "Special Courts for Cooperative Societies" to adjudicate on offences, Mr. Raza contended that these do not operate as an implied bar to the jurisdiction of this Cour to adjudicate the causes of action of the captioned Suits. 17. Mr. Raza contended that "Special Courts for Cooperative Societies" were created by Section 117 but which only had jurisdiction to try "offences" as defined in Section 99 of the Act, 2020 and to disputes referred to in Section 78 of the Act, 2020. He further contended that as none of the offences under the Act, 2020 related to causes of action of a civil nature, no civil suit could be transferred to a "Special Courts for Cooperative Societies" as constituted under Section 117 of the Act, 2020 and hence would not attract the implied bar as contained in Section 9, of the Code of Civil Procedure, 1908 so as to allow for the transfer of each of the suits. 18. He maintained that under the dictates of Sub-Article (2) of Article 175 of the Constitution of Pakistan, 1973, all courts in Pakistan are "established by law", and exercise only that jurisdiction which is conferred on them "by the Constitution or by or under any law." It is was submitted that as redundancy cannot be attributed to the legislature, as such the expression "by" could indicate the conferment of jurisdiction to a court through statute, and the expression "under" could indicate the conferment of jurisdiction to a court through subordinate legislationas the word "law" would include "statutory rules". 19. In respect of "Cooperative Courts" he submitted that while a reference has been made to such a court in Section 73 of the Act, 2020 there was no specific provision that existed in the Act, 2020 which created such a court and which had therefore not been "established by law", and hence could not be deemed to impliedly bar the jurisdiction of this Court under Section 9, Code of Civil Procedure, 1908.

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20. He submitted that if one is to assume that the "Cooperative Courts" had been legally established under the Act, 2020, that even then, they would not have the jurisdiction "by or under any law" to impliedly oust the jurisdiction of civil courts under Section 9, Code of Civil Procedure, 1908. He contended that as the language of Section 73 of the Act, 2020 failed to refer to the section on the basis of which the "Cooperative Courts" had been constituted, such an omission by the legislature must be considered as deliberate and could not be supplied by a Court through a judicial interpretative process unless a clear intention to constitute the same could be found within the four corners of the Act, 2020. It was submitted that even if recourse was taken to the "mischief rule", the rule for beneficial and harmonious construction and to avoid repugnancy in the interpretation of statutes, this Court could not fill in the lacuna and "create" the "Cooperative Court" through a judicial pronouncement. To elaborate on this point, he stated that: (i) As, the legislature had not indicated in the Act, 2020 as to which Section established the Cooperative Courts, consequentially the rule of casus omissus i.e. an omission by the legislature in a statute, even if inadvertent, is deemed to be deliberate and cannot be supplied by Court through a judicial interpretative process unless clear reason for the same can be found within the four corners of a statute was not available to be applied in the circumstances. It was submitted that even under the mischief rule, the rule of beneficial and harmonious construction, or the rule to avoid repugnancy, this Court could not fill in the lacuna and create the "Cooperative Court" through a judicial pronouncement. (ii) as the expression "disputes" as used in Section 73 of the Act, 2020 had not been defined therein, and had actually been defined in Rule 53 of the Sind Cooperative Societies Rules, 2020, as such, the conferment of jurisdiction on "Cooperative Courts" through Sind Cooperative Societies Rules, 2020 was ultra vires of the Act, 2020 inasmuch as Section 118 does not delegate the power to confer jurisdiction on the "Cooperative Court" or the "Special Court for Cooperative Societies" through rules. As a consequence, the Government of Sindh notification dated 3 August 2021 notifying existing Courts across Sindh as "Special Courts for Cooperative Societies" to try offences under the Act 2020 may well be intra viries of the Act, 2020, the modification through a notification dated 9 August 2021 whereby the aforementioned "Special Courts for Cooperative Societies" were conferred with the additional jurisdiction to try "civil disputes" as mandated under the said Act and the rules made thereunder was ultra vires of the Act, 2020 as no jurisdiction was conferred on the "Special Courts for Cooperative Societies" to try civil disputes. To take the point further, he contended that the "Cooperative Court" had been completely "side-lined" and the Special Courts for Cooperative Societies had been conferred jurisdiction to try offences and adjudicate disputes; and (iii) Finally, he contended that even if Rule 53 of the Sindh Cooperative Societies Rules, 2020 is found to be intra vires of the Act 2020, as the jurisdiction of the Special Court for Cooperative…

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