JUDGMENT

1. This appeal which raises an important question of jurisdiction arises out of a suit for a declaration that certain bonds alleged to have been executed by the plaintiff in favour of defendant No. (1) were not executed by him and that they were forgeries. The defendant, relying upon certain rules framed by the Local Government under the authority of Section 43 of the Co-operative Societies Act, pleaded that the Civil Court had no jurisdiction to hear and determine this suit, and that the only remedy open to the plaintiff was by way of a reference to the Registrar who could either decide the dispute himself or refer it to the arbitrament of one or more arbitrators whose decision is final, and not liable to be questioned in a Civil Court except on proof of the receipt of a corrupt gratification by the latter. This plea was given effect to by the Court of first instance, but did not find favour with the District Judge who on appeal came to the contrary conclusion, and remanded the case for decision on the merits. The defendant has now preferred a second appeal to this Court, and the sole point involved for determination here is whether the District Judge was right in holding that the suit was cognizable by a Civil Court.

2. Rule 18 of the Rules made by the Local Government under the Co-operative Societies Act (published in Punjab Government Gazette, dated the 23rd June 1917) and invoked by the defendant in support of his contention is in the following terms:

3. (a) Any dispute concerning the business of a Co-operative Society between members or past members of the society or persons claiming through them, or between a member or past member or persons so claiming and the Committee or any officer shall be referred to the Registrar. Reference may be made by the Committee or by the Society by resolution in general meeting or by any party to the dispute, or if the dispute concerns a sum due to the society by any member of the society.

4. (b) The Rsgistrar may either decide the dispute himself or appoint an arbitrator or refer it to three arbitrators, of whom one shall be nominated by each of the parties and the third shall be nominated by the Registrar and shall act as Chairman. When any party to a dispute fails to nominate a suitable arbitrator within 15 days the Registrar may make the nomination. No legal practitioner may be nominated as arbitrator by any party.

5. (c) In such a proceeding the Registrar or arbitrator shall have power to administer oaths, to require the attendance of parties and witnesses, and to require the production of all necessary books and documents, by a summons delivered orally or sent by hand or by registered post or through the nearest Civil Court having jurisdiction in the area in which the society operates and shall further have power to order the expenses of determining the dispute to be paid either out of the funds of the society or by such party or parties to the dispute as he may think fit.

6. (d) The Registrar or arbitrator shall hear the evidence of the parties and witnesses-who attend, and upon that evidence and after consideration of any documentary evidence produced by either side, a decision or award shall be given in accordance with justice, equity and good conscience and shall be reduced to writing. In the absence of any party, duly summoned to attend, the dispute may be decided against him in default. Where three arbitrators are appointed, the opinion of the majority shall prevail.

7. (e) Any person duly summoned by the Registrar or arbitrator to appear before him or to produce any document and failing to do so shall be liable to the penalties prescribed in paragraph 7 (2) of the Second Schedule of the Civil Procedure Code, 1908.

8. (f) Any party aggrieved by an award of an arbitrator may appeal to the Registrar in person or by agent within one month of the date of the award.

9. (g) An arbitrators award, if no appeal has been made within a month, on a decision of the Registrar originally or