Union funds cannot be used for speculative share purchases outside statutory and constitutional limits.

Union funds may be used only for the purposes permitted by the Trade Unions Act and the union constitution. Section 15 confines expenditure of general funds to statutory objects, while Section 16 separately regulates political funds; a purchase of shares in the open market was treated as speculative and outside those powers. The union constitution also required union money to be deposited and operated through a scheduled bank, which was inconsistent with using substantial funds to buy shares in the names of office-bearers. General body approval could not validate a transaction that was otherwise unauthorised. The share purchase was held illegal, and the Industrial Court's refusal of interim relief was set aside.

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Issues: Whether the purchase of shares by office-bearers from union funds was authorised by the Trade Unions Act, 1926 and the union constitution, and whether rejection of interim relief by the Industrial Court was sustainable.

Analysis: Section 15 of the Trade Unions Act, 1926 permits expenditure of general funds only for the objects specified in the Act, and Section 16 of the Trade Unions Act, 1926 separately deals with political funds. A purchase of shares in the open market was held to be a speculative activity and not an authorised expenditure or investment under the Act. Clause 14 of the union constitution required union monies to be deposited in a scheduled bank and operated in the prescribed manner, which was inconsistent with utilising a substantial amount for share purchase in the individual names of office-bearers. Approval by the general body could not legalise a transaction that was otherwise outside the statutory and constitutional limits.

Conclusion: The share purchase was unauthorised and illegal, and the Industrial Court erred in refusing interim relief.

Final Conclusion: The petition succeeded, the impugned interim order was set aside, and the Industrial Court was directed to decide the application afresh in accordance with the Court's observations.

Ratio Decidendi: Union funds can be applied only within the objects permitted by the Trade Unions Act and the union constitution, and speculative use of such funds lies outside those powers.

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