Decided on October 09,1967

K. SUKUMARAN Appellant
P.K. NADARAJAN Respondents


- (1.) WHETHER S. 60 of the Travancore-Cochin Co-Operative societies. Act applies to the dispute in question is the question to be decided in this civil revision petition.
(2.) THERE are two Full Bench decisions on the point, one, of the Madhya Pradesh High Court in Gokul Prasad Moujilal Bharat v, lakmanasingh Mahasingh (AIR. 1962 M. P. 265) and two, of the Madras High Court in M. S. Madhava Rao v. D. V. K. Surya Rao, Member of the Pithapuram co-Operative Bank, Pithapu-ram (AIR. 1954 Mad. 103 ). The suit in the case before me was by a shareholder of a co-operative bank against its office-bearers for a declaration that they are disqualified to be members of the executive of the bank on the allegation that they committed fraud, misappropriation, etc. In a case involving a dispute in an election to a co-operative society the Madras high Court held in its Full Bench decision that the dispute was one touching the business of the society, while, in a similar case, the Madhya Pradesh High court held that it was not. The Madhya Pradesh High Court refused to follow the decision of the Madras High Court. The High Courts of Bombay and Allahabad also held the Madras view, while the Calcutta High Court held the Madhya Pradesh view. The lower court has followed the Full Bench decision of the Madhya Pradesh High Court and has also referred to a decision of mine in coir Industrial Co-Operative Society, Chingoli v. Govindan (1962 KLT. 400), wherein I made a distinction between the expression 'for the purpose of the business' and the expression 'touching the business' of a co-operative' society. To be more precise, I said that a line should b2 drawn as to where a transaction intended for the purpose of the business' commences 'touching the business' of the society. I also gave some illustrations, from which it is clear that the transaction must really touch the business of the society and it should not be far-fetched or be divorced from the business of the society. I did not also disagree with the Madras Full Bench decision. On the other hand, I referred to that decision, with approval. I may also mention that the Madras decision was followed by a division Bench of the Travancore-Cochin High Court in C. J. Joseph v. Registrar of Co-operative Societies, Trivandrum (AIR 1957 TC. 274 ). Both the Full Bench decisions were cited before my learned brother. Mathew J. , in Vasu Pillai v. Registrar of Co-operative societies (1965 KLT. 447); and my learned brother preferred the Madras view and declined to follow the Madhya Pradesh decision. Besides this decision, the counsel of the petitioner draws my attention to the decision of the Supreme Court in pentakota Sriramulu v. Co-operative Marketing Society Ltd. , Anakapalli (AIR. 1965 SC. 621), wherein also S. 51 of the Madras Co-operative Societies Act corresponding to S. 60 of the Travancore-Cochin Act came up for consideration. Their Lordships of the Supreme Court observed that in a case where the excess of prices over the controlled price received by an executive of a co-operative society was not entered in the account of the society, the dispute 'touched the business of the society'. The present case is a similar one, in which allegations of fraud, mis-appropriation, etc. are made against the members of the executive of the society and a declaration is also sought that they are unfit to remain in their position on that ground.
(3.) THE above decision makes it clear that the present case falls within the mischief of S. 60 of the Travancore-Cochin Co-operative societies Act and the suit before the civil court is incompetent. THE civil revision petition is allowed; and the order of the lower court is reversed. However, I direct both parties to bear their respective costs. Allowed.;

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