The Secretary Of The North Arcot ... vs Philo Josephine on 15 December, 1972
The Full Bench in Madhava Rao v. Surya Rao expressed its view that in order to find out the business of the Society one has to look into the provisions of the Act and the rules and by-laws framed by the Society and that all that is permitted to be done by the by-laws which are intra vires of the Act, by the provisions of the Act and the rules must be deemed to be the business of the Society. Rule 85 of the Tamil Nadu Co-operative Societies Rules, 1963 provides that no society shall appoint any person as its paid employee in any category of service without obtaining from him security in such form and according to such standard as the Registrar may fix for such category of service under the Society or under the class of Societies to which it belongs. The receipt of security deposits from paid employees and naturally the refund of such deposits, even though the rule does not mention about the refund of security deposits, would be the business of the Society authorised by the rules of the Act. In this view, there is no escape from the conclusion that the return of security deposit is a dispute touching the business of the Society and therefore, within the purview of Section 73 of the Act. The suit is, therefore not maintainable. The contention of the learned Counsel for the petitioner will have to be accepted and this petition allowed.