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The Secretary of the North Arcot District Co-operative Supply and Marketing Society Vs. Philo Josephine - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
CourtChennai High Court
Decided On
Reported in(1973)2MLJ284
AppellantThe Secretary of the North Arcot District Co-operative Supply and Marketing Society
RespondentPhilo Josephine
Cases ReferredMadhava Rao v. Surya Rao
Excerpt:
- .....herein. the plaintiff-respondent an employee of the society filed a suit for recovery of security deposit made by her, when she joined the society. she resigned her job and claimed that a sum of rs. 250 which had been deposited by her as security should be returned to her. the society while accepting that the respondent had deposit-edasum of rs. 250 towards the security deposit, contended that the suit is not maintainable in the civil court, and that the respondent should have taken proceedings under the tamil nadu co-operative societies act by filing a petition under section 73 of the act.2. the question for consideration is' whether the claim for refund of security deposit is one that falls under section 73 of the act. section 73 of the act (liii of 1961) provides that if any.....
Judgment:

P.S. Kailasam, J.

1. The Secretary of the North Arcot District Co-operative Supply and Marketing Society, Vellore, the defendant in the suit, is the petitioner herein. The plaintiff-respondent an employee of the Society filed a suit for recovery of security deposit made by her, when she joined the society. She resigned her job and claimed that a sum of Rs. 250 which had been deposited by her as security should be returned to her. The society while accepting that the respondent had deposit-edasum of Rs. 250 towards the security deposit, contended that the suit is not maintainable in the civil Court, and that the respondent should have taken proceedings under the Tamil Nadu Co-operative Societies Act by filing a petition under Section 73 of the Act.

2. The question for consideration is' whether the claim for refund of security deposit is one that falls under Section 73 of the Act. Section 73 of the Act (LIII of 1961) provides that if any dispute touching the business of a registered society arises, the Registrar may decide the dispute. The section also exempts disputes regarding the disciplinary action taken by the society or its committee against the paid servant of the society from the operation of the section. The point, therefore, that falls to be decided is whether the relief for refund of security deposit would be touching the business of the registered Society.

3. In The Tanjore Co-operative Marketing Federation Ltd. v. R. Krithivasan : AIR1951Mad352 , the Court held that it was not satisfied that, when an ex-employee asked for the refund of his security deposit and for the arrears of salary, that was a matter relating to the business of the society. The learned Judge proceeded to observe that the business of the society was not the taking of security deposits, but the carrying on of some kind of co-operative business. This view supports the contention of the respondent that the matter does not fall within Section 73 of the Act and the civil Court has jurisdiction. It may also be mentioned that in Narayanan Nair v. The Secretary, Triplicane Urban co-operative Society Ltd. : AIR1948Mad343 , it was held that where an employee of a Co-operative Society sued the Co-operative Society for damages for wrongful dismissal, it could not be held that the action was touching the business of the Society and that the civil Courts had jurisdiction. So far as this view is concerned, it can be supported on the basis that disputes regarding the disciplinary action taken by the Society or its committee against paid servants of the Society is exempted from the operation of Section 75 of the Act, and there can be no dispute that regarding such disputes a suit in a civil Court is maintainable. A Full Bench of this Court in a decision in Madhava Rao v. Surya Rao : AIR1954Mad103 , in considering the words ' affairs ' and ' business ' held that the decision in Tanjore Co-operative Marketing Federation Ltd. v. R. Krithivasan : AIR1951Mad352 , took a narrow view of the word c business ' and did not lay down the law correctly. The Full Bench has, therefore overruled the decision in Tanjore Co-operative Marketing Federation Ltd. case : AIR1951Mad352 . Ramamurti, J. in The North Arcot District General Co-operative Stores Ltd., represented by its Secretary v. A.K. Thiruvenkadnsami Chettiar S.A. No. 532 of 1961, which arose out of a claim for damages for wrongful dismissal of a servant of the Go-operative Society, after referring to the decision of this Court in The Tanjore Co-operative Marketing Federation Ltd. v. R. Krithivasan : AIR1951Mad352 and the Full Bench decision in Madhava Rao v. Surya Rao : AIR1954Mad103 expressed his view that the Full Bench did not accept the view of Govinda Menon, J., that a claim for refund of the security deposit would not be governed by Section 51 of the Act, but added that the Full Bench did not express any dissenting view about the portion of Govinda Menon, J's judgment relating to the claim for arrears of salary. This distinction is of no help in this case, as the claim is for refund of the security deposit and is specifically overruled by the Full Bench decision in Madhava Rao v. Surya Rao : AIR1954Mad103 . The decision in Tanjore Co-operative Marketing Federation Ltd. v. R. Krithivasan : AIR1951Mad352 is no longer good law.

4. Mr. Krishnaswamy, learned Counsel for the respondent submitted that the view expressed by the Full Bench is in the nature of obiter dicta and this Court is not bound to follow it. The learned Counsel submitted that the matter which arose for consideration by the Full Bench in Madhava Rao v. Surya Rao : AIR1954Mad103 was a dispute relating to the election of directors by its general body and the observation made in that connection will not be an authority for the proposition that the claim for refund of security deposit would be touching the business of the Society. There may be some substance in this contention. But this plea will have to be rejected on the ground that the employment of the servants of the Society, the receipt of security deposits from them are covered by the rules framed under the Tamil Nadu Co-operative Societies Act, 1961. The Co-operative Society is en-joined by the Co-operative Societies Act, rules and by-laws to carry out the purposes of the Act, and whatever acts they are enjoined to carry out under the Act, rules or by-laws will be the business of the Society. The Full Bench in Madhava Rao v. Surya Rao : AIR1954Mad103 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.

5. Accordingly, this petition is allowed. There will be no order as to costs.

6. The Co-operative Society contested the suit only regarding the forum. In fact it has made it clear in its written statement that it had received the deposit of Rs. 250. Having succeeded in their legal contention, it is hoped that the Cooperative Society will refund the deposit amount. In case of the Society failing to do so, the respondent will be at liberty to take proceedings under Section 73 of the Act.


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