The general meeting of a Co-operative Society has the final authority to pass resolutions, subject to the Act, Rules, and Bye-laws, and can authorize the payment of honorarium to its members for services rendered to the Society, even if not specified in the Bye-laws.

Headnote:
CO-OPERATIVE SOCIETY - HONORARIUM - PAYMENT TO MEMBER - GENERAL MEETING RESOLUTION - VALIDITY - MAHARASHTRA CO-OPERATIVE SOCIETIES ACT, 1960 - SECTIONS 64, 65(2), 72, 88.
Fact of the Case:

Petitioners, members of the Managing Committee of a Co-operative Housing Society, challenged proceedings under section 88 of the Maharashtra Co-operative Societies Act, 1960, seeking to recover honorarium paid to one of the petitioners for services rendered to the Society. The Society had passed resolutions authorizing the payment, but the Registrar and Joint Registrar objected, citing sections 64 and 65(2) of the Act.
Finding of the Court:

The Court held that the general meeting of the Society had the final authority under section 72 of the Act, subject to the Act, Rules, and Bye-laws. Sections 64 and 65(2) did not prohibit the payment of honorarium as part of construction costs, as authorized by the general meeting. The Registrar had no power to conclude that there was misapplication or breach of trust, and the inquiry under section 88 was not maintainable.
Issues: 1. Whether the general meeting of a Co-operative Society can pass a resolution to pay honorarium to its member for services rendered to the Society. 2. Whether sections 64 and 65(2) of the Maharashtra Co-operative Societies Act, 1960, prohibit the payment of honorarium as part of construction costs.
Ratio Decidendi: 1. The general meeting of a Co-operative Society has the final authority under section 72 of the Maharashtra Co-operative Societies Act, 1960, subject to the Act, Rules, and Bye-laws. 2. Sections 64 and 65(2) of the Act do not prohibit the payment of honorarium as part of construction costs, as authorized by the general meeting.
Final Decision: The petition was allowed, and the orders passed by the Joint Registrar, Inquiry Officer, and Maharashtra State Co-operative Tribunal were set aside. The proceedings under section 88 against the petitioners were quashed.

JUDGMENT

VAIDYA J.-The above petition under Article 226 of the Constitution of India is directed against the proceedings under section 88 of the Maharashtra Co-operative Societies Act, 1960. It involves an important question as to whether in exercise of its powers under section 72 of the Maharashtra Co-operative Societies Act, 1960, the general meeting of a Co-operative Society can pass a resolution to pay honorarium to its member for services rendered by him to the Society.

2. The few facts relevant to the case may be stated as follows:

Respondent No.6, the Navjivan Co-operative Housing Society Ltd., having its office at Lamington Road, was registered on December 12, 1955, under the Bombay Co-operative Societies Act, 1925. It is deemed to be registered under the Maharashtra Co-operative Societies Act, 1960. It is governed by its registered bye-laws. It is one of the largest Co-operative Housing Societies in the State of Maharashtra. It has a membership of 1800 members. It has provided residential accommodation to about 1,600 families in four housing schemes at Mahim, Matunga, Chembur and Lamington Road. The total cost of this project came to about Rs. 4 crores, Every colony started and built up by respondent No.6 is having residential flats, shopping centre, a library-cum-community hall, a temple, garages, a high school, a milk centre and number of other common amenities for residential houses.

3. Petitioner No. 1 Kumari Jethi T. Sipahimalani, has been the Chairman of the Society. She was once the Deputy Chairman of the Former Sind Legislative Assembly and also a Member of the Maharashtra Legislative Council. Petitioner No.2, Principal Lalsingh H. Ajwani, was till recently the Principal of the National College, Bandra. He also happens to be a Member of the Sahitya Academy of India. Petitioner No.3, Balram B. Motwani, is a journalist and Deputy Editor of 'Hindusthan' a Sindhi daily. Petitioner No. 4 Smt. Thakuri S. Jagtiani, claims to be an eminent Social Worker in Bombay. Petitioner No.5, Dr. Kewalram H. Khilnani, also claims to be a noted educationst and a leading social worker. All these petitioners were members of the Managing Committee of respondent No. 6, Co-operative Housing Society, during the years 1963-64 and 1964-65. Petitioner No.6, Mangharam N. Thadani, was an advocate of this Court and was, during the above years, Hon. General Secretary of the Navjivan Co-operative Housing Society Ltd., respondent No.6 herein. In fact, he was its Hon. General Secretary since its inception. At the time of the filing of the petition, he was Chairman of the Bombay Co-operative Housing Federation Ltd., Member of the Maharashtra Co-operative Housing Advisory Council, and Member of the Advisory Committee, Mahalashtra State Co-operative Bank Ltd.

4. The petitioners commanded confidence of the majority of the members of the Society and were elected as members of the Managing Committee. The first Scheme of the Housing Society consisting of 280 flats with a shopping centre, a library-cum-community hall, a temple, garages arid a high school, a milk centre and number of other common amenities was completed at Mahim in 1959. The second scheme was at Tulsi Pipe Road, Matunga. It consisted of 86 flats, a shopping centre, a library room, a temple and other common amenities. The third scheme of respondent No. 6 was at Chembur. It was completed in 1963, consisting of 51,6 residential flats, 16 shops, a school-cum-community hall, 12 garages, a temple, a charitable dispensary, a diagnostic centre and other common amenities for the residents of the colony. The fourth scheme of the respondent No, 6, which was nearing completion when the petition was filed and which has been completed during the pendency of this petition, is situated on a large plot of land at Lamington road. It provides 724 residential flats, 350 offices, a school-cum-community hall, a shopping centre, garages and several other common amenities.

5. All these schemes are the result of

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