Co-operative society liability under trust-related provisions cannot extend to pre-transfer acts of a private bank.

Section 63 of the Madhya Bharat Co-operative Societies Act, 1954 applies only to persons who, in relation to the society, have misapplied its money or property, retained it, or committed misfeasance or breach of trust. Acts done before the society came into existence, or before the bank's property vested in it, are not acts in relation to the society. Mere registration of the society did not itself create a trust or vest the bank's property; that interest arose only on transfer. Liability therefore could not be imposed for dealings with the private bank before transfer, and the impugned orders were without jurisdiction to that extent.

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Issues: Whether liability under Section 63 of the Madhya Bharat Co-operative Societies Act, 1954 could be imposed on the directors for acts done by them while the bank was still a private bank and before it was transferred to the co-operative society.

Analysis: Section 63 authorises the Registrar to proceed only against persons who have taken part in the organisation or management of the society and who have misapplied, retained, become liable or accountable for, or committed misfeasance or breach of trust in relation to, money or property of the society. The provision is directed to acts connected with the society itself. Acts done before the society came into existence, or before the bank's property vested in the society, cannot be treated as acts in relation to the society. A mere registration of the society did not by itself create a trust or vest any interest in the bank's property in the society; that interest arose only on transfer.

Conclusion: Liability could not be imposed under Section 63 for dealings with the private bank before its transfer to the society. The impugned orders were without jurisdiction to that extent, and the petitioners succeeded on this issue.

Ratio Decidendi: A coercive liability provision directed to misapplication or breach of trust in relation to a society cannot be invoked for pre-transfer acts done in relation to a predecessor private concern, because such acts are not acts in relation to the society or its property.

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