The commission earned on illegal transactions did not cease to be 'business' within the ambit of section 51 of the Co-operative Societies Act, and the dispute arose from the earning of higher commission in the course of business and was thus 'touching the business of the Society'.

CHANDRA REDDY, CJ.

( 1 ) THIS appeal is filed against the Judgment of our learned brother, Bhimasankaram, J. The Anakapalle Co-operative Marketing Society, Ltd. , is the appellant before us. This society was constituted mainly for the purpose of affording credit facilities to its members and to arrange for the sale of their agricultural produce at a reasonable price. The first respondent was the President of the Society for sometime prior to 1951. The Society had a license as a commission agent under the madras General Sales-tax Act and was earning commission on the turnover of its sales. Under its by-laws, its business extended to the sale of jaggery belonging to members as well as non-members. In October, 1950, the Gur Control Order was promulgated by the Central Government fixing the maximum price of jaggery in different parts of the country. Having regard to the fact that the prices fixed for the Andhra State were lower than those fixed for other States, merchants from other parts of the country came to the Andhra State for purchasing stocks of jaggery at lower rates. This led to a sharp rise in the price and as the members of the Society thought that it would not be feasible to obtain higher prices if the sale transactions were put through the Society they began to sell their stocks in open market.

( 2 ) FINDING that this deflected the business to the market and consequently the society could not earn any commission, representations were made to the Government officials to keep the prices down to the level of those fixed in the Gur Control order. Since no steps were taken by the officials concerned in that behalf, it is said that the members resorted to the following device. When jaggery belonging to a member was sold by the Society, the owner would be present and there would be a private arrangement between him and the purchaser whereby a price in excess of what was purported to be sold by the Society would, in fact be paid for it. The difference between the ceiling price and the agreed price would be given direct to the seller by the purchaser. The seller would pay commission to the Society on the extra price also. This state of affairs was disclosed to the Sales-tax Department when they happened to inspect the accounts of the Society. When the matter was brought to the notice of the Co-operative Department, the Registrar directed its supersession, one of the grounds thereto being contravention of the Gur Control order. Thereafter, the Registrar appointed one of the Deputy Registrars to act as an arbitrator under section 51 of the Madras Co-operative Societies Act (VI of 1932 ). When that Officer started the enquiry under section 51 of the Act the President and some of the Directors who had participated in the activities mentioned above, approached this Court for relief under Article 226 of the Constitution of india.

( 3 ) THE main ground urged in support of the petition was that as the commission was earned on illegal transactions, the provisions of section 51 could not be availed of by the Society for the reason that such transactions could not be regarded as busi ness within the purview of section 51. The argument as elaborated was that if transactions involve a violation of a statutory prohibition against charging prices in excess of the price fixed in the Gur Control Order, they could not come within the definition of business under section 51 of the Madras Co-operative Societies Act. This prevailed with the learned Judge with the result that he decided that section 51 was inapplicable to the present case. The reasoning of the learned Judge in that behalf is as follows :-"the claim is for commission stated to have been collected on the basis of prices over and above the awful maxunum price. Threre can be little doubt that the Gur Control Order was passed in the public interest, that is to say, in order that the commodity may be made available to consumers in sufficient quantities at a reasonable prices. A trans

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