The main legal point established in the judgment is that employees of a Co-operative Society are liable to be insured under the Employees' State Insurance Act, and the decision of the Employees Insurance Court did not operate as res judicata.

1. In both these cases a common question arises Are the employees of a Co-operative Society, deemed to be registered under the Kerala Co-operative Societies' Act, 1969, liable to be insured under the provisions of the Employees' State Insurance Act, 1948? It is contended by the Employees' State Insurance Corporation that they are liable to be so insured. The stand taken by the employers in these two cases is that there is no scope for such coverage since the employees are members of the Society and as such there cannot be an employer-employee relationship between them and those employed by them. This seems to have appealed to the Employees' Insurance Court with the result that the applications by the employers have been allowed in both the cases. In M.F.A. No. 404 of 1978 there is a further question to which we will refer later.

2. A Society registered under S.7 of the Kerala Co-operative Societies Act is a body corporate known by the name under which it is registered, having perpetual succession and a common seal and with power to hold property, enter into contracts, institute and defend suits and other legal proceedings and to do all things necessary for the purposes for which it is constituted. S.9 provides so. It is a legal entity distinct from its shareholders. The shareholders may, no doubt, be interested in the proper governance of the Cooperative Society and its proper functioning, but that is not to say that they are owners of the Co-operative Society. That this is the position was held by this Court as early as in 1964 in the decision in Kerala State Handloom Ltd v State of Kerala (1964 KLJ. 175). There the question arose under the Industrial Disputes Act and the contention that there cannot be an employer-employee relationship between a Co-operative Society and its employees, who are members of the society was negatived in that case on the same reasoning as we have pointed out here. But, nevertheless the decision of the Employees' Insurance Court is sought to be supported by the learned counsel appearing for the respondent in M. F. A. No. 404 of 1978 on the authority of the decision of the High Court of Madras in S. A. Co.-op. Motor

Transport Soc.Syed v. Batcha (1964 (1) LLJ. 280). A Division Bench of the High Court of Madras no doubt considered more or less a similar situation in that case. The society which was the appellant before the Court in that case was one the membership of which was restricted to ex-servicemen and for getting employment in the society its membership was made a condition precedent. Some of the employees were retrenched and the claim made by the member-employees for retrenchment compensation under S.25F of the Industrial Disputes Act was negatived. When consequently the question of entertaining the dispute arose under S.33C (2) of the Industrial Disputes Act before the Labour Court, the court held that it had jurisdiction. The matter ultimately reached the High Court and in this context the High Court found:

"The object of the society among others is to carry on the business of running for hire, goods and passenger transport services. All the shareholders are interested in running the above services. They are members of the society and owners of the concern."

On this approach, the court found that there could be no industrial dispute as the controversy was not between the workmen and the employer since the employees cannot be workmen as defined under the Act. With great respect to the learned judges of the Division Bench, we cannot agree with the statement of the law that the members of the society are owners of the concern. That was a case of a Co-operative Society registered under the Madras Cooperative Societies Act 6 of 1932. The provision for registration of a Co-operative Society under that Act is in S.9.

3. In the Bank Nationalisation case R. C. Cooper v. Union of India (AIR. 1970 SC. 564) the locus standi of a shareholder to challenge the Banking Companies (Acquisition and Tra