1. The allegations of fact contained in the plaint in Suit No. 54 of 1932, in the First Court of the Subordinate Judge, Dacca, against an order passed in which the application to this Court on which this rule was issued, was directed, are set out in the affidavit filed in this Court on behalf of the opposite parties in this rule, the plaintiffs in the suit. The plaintiffs are firms eight in number carrying on business as Dacca Co-operative Sankha Silpa Samity Ltd., (Nos. 1 to 8), the defendants in the suit being the Dacca Co operative Industrial Union Ltd., the opposite parties in this rule. It appears that the plaintiffs became the share-holders of the defendant Union in the year 1924, on subscribing shares which were fully paid up. It was stated in the plaint that there was an agreement for reduction of shares of the plaintiffs in the defendants' business and for adjustment of accounts with a view to make the plaintiffs free from liability to the defendants. The accounts were, it was alleged, not adjusted; and demand notices were issued on 13th September 1930, upon the plaintiffs for payment of arrears stated to be due from them. Objection was raised to the demand thus made and liability was denied by the Samitys. Suits were thereupon instituted according to the provisions of the Co-operative Societies Act, 1912 and the rules framed thereunder, by the Secretary to the defendant Union. The plaintiffs in the suit, the petitioners in this Court, allege that they did not know whether plaints were filed by the Secretary of the defendant Union or whether any reference was made by the Union; the plaintiffs did not receive any copy of the plaint or any other material or materials excepting the summons from the Inspector of Co-operative Societies, intimating that the suit was fixed for final disposal on 16th September 1930.
2. It appears that the plaintiffs appeared before the Inspector on 16th September 1930, and were informed that he had been appointed arbitrator by the Assistant Registrar, Co-operative Societies, The plaintiffs applied to the Assistant Registrar on 24th September 1930 for the appointment of an arbitrator on their behalf, Under Rule 22 of the Rules Under Section 43, Co-operative Societies Act. No order was however made on the application so made. On 26th October 1930 the case was heard by the arbitrator appointed by the Assistant Registrar. The deposition of the Head Clerk of the defendant Union was recorded, and some evidence on the side of the plaintiff Samitys was also recorded although they had no notice to appear before the arbitrator on 26th October 1930. It was further alleged that the evidence sought to be adduced on behalf of the different Samitys, three of whom only were informally represented before the arbitrator, was not taken; the evidence tendered by the other Samitys was not received. On 4th November 1930, the plaintiffs Samitys appear to have filed written statements before the arbitrator; witnesses were cited, some documents were filed, others were called for; the arbitrators however did nob accede to the prayers made by the petitioners in the matter of summoning witnesses and production of documents.
3. An award against the plaintiff Samitys followed; and the suit out of which this application has arisen was thereupon instituted by the Samitys calling into question the reference to arbitration, as also the appointment of the arbitrator and the procedure adopted by the arbitrator. The allegation of the plaintiffs in the suit pointed clearly to the fact of the abuse of the power of the arbitrator, who had fixed a liability of Rs. 82,081-12-6, so for as the plaintiffs were concerned and a declaration was prayed that the award was invalid, void and without jurisdiction, and not enforceable in law. Prayer was also made in the suit for setting aside the award. The defendant in the suit, the Dacca Co-operative Industrial Union Limited, raised the defence that the civil Court had no jurisdiction to entertain the suit, which was considered by the Court below at their instance, before evidence was gone into, on the merits of the case, as in the words used by the learned Subordinate Judge as ' a point which cuts to the merits of the suit.' The learned Judge has held by his order, recorded on 23rd January 1933, that the jurisdiction of the civil Court was not ousted to consider the points whether the appointment of the arbitrator was valid, and whether the arbitrator abused his power or not. It has further been stated by the learned Judge in his order that those points could not be decided at the present stage ,and a final decision on the question of jurisdiction as raised by the defendant, could not be given before evidence in support of the allegations of fact made in the plaint have been considered in the light of facts proved in the case, and that the issue on the question of jurisdiction was to be further considered after evidence in the case has been adduced. The question for consideration in this rule is whether the Court below was right in holding that the civil Court had jurisdiction to entertain the suit. It may be stated at the outset that we are not very much impressed with the reasons given by the learned Judge in the Court below for over-ruling the contention of the petitioners in this Court that Rule 22(6) framed by the Local Government Under Section 43, Co-operative Societies Act, was not ultra vires. As it is however not necessary for us to give our decision on that question, in the case before us, we refrain from expressing any opinion on the same.
4. On the question of jurisdiction of the civil Court, we are clearly of opinion that there is nothing contained in Rule 22(6) to which reference has bean made above, which would lead to the conclusion that the civil Court had no jurisdiction to entertain the suit as framed. It would not be right to hold, on the definite allegations of fact made in the plaint before the Court, that there was any admission of fact which could oust such jurisdiction. The power to appoint the arbitrator was questioned by the plaintiffs, on averments of fact; the exercise of jurisdiction by the arbitrator was questioned; it was definitely alleged that the arbitrator had abused his powers; and that a decision was given by the arbitrator against the plaintiffs after following a procedure which was wholly irregular and illegal. In our judgment, the decision of the arbitrator, which it appears was affirmed on appeal to the Assistant Registrar, Co operative Societies, could not be treated as conclusive between the parties concerned, in view of the allegation made in the plaint filed before the Subordinate Judge in the Court below; nor are we in a position to hold that on the allegations in the plaint the plaintiffs were debarred from asserting their rights before a Court of civil judicature. A question of jurisdiction was involved on the facts stated in the plaint before the Court, and it was for the Court to decide whether the decision of the arbitrator given against the plaintiffs, the petitioners in this Court, was one made with jurisdiction. An Order if made by a person appointed as arbitrator, who could not be appointed such an arbitrator under the law: or an order made by such an arbitrator, in the abuse of the powers conferred upon him is a nullity, and cannot affect the rights and obligations of the parties. In the case before us, regard being had to the facts alleged in the plaint, the Court below has rightly held that the decision on the question of jurisdiction of the civil Court to entertain the suit, as raised by the defendants, petitioners in this Court, depended on the consideration of facts, and such decision could only be given after evidence has been adduced by the parties. The suit as instituted by the plaintiffs was maintainable, and could not be thrown out at the present stage.
5. In view of the conclusion we have arrived at as mentioned above, this rule must be discharged, and the order of the Court below passed on 23rd January 1933 affirmed ; and we direct accordingly. The petitioners are to pay the costs of the opposite parties in this rule; the hearing fee is assessed at two gold mohurs.