B S DWARAKNATH PRESIDENT MALAKPET GROUP TODDY TAPPERS CO OPERATIVE SOCIETY LTD Vs. GOVERNMENT OF ANDHRA PRADESH

JUDGEMENT

(1.) The Malakpet Toddy Tappers Co-operative Society Limited, Hyderabad, consisted of 87 members. It was registered as a Co-operative Society under the Andhra Pradesh Co-operative Societies Act 1964. Once it was so registered it becomes a body corporate under section 9 of that Act. Section 9 ot the Act reads thus:

(2.) As a body corporate it becomes a legal person. In the words of Salomon v. Salmon & Co., "The corporation is not a mere aggregate of shareholders. The company is at law a different person altogether from the subscribers to the memorandum. The property of the company is not in law the property of the shareholders. The debts and liabilities of the company are not attributed in law to its members. The company may become insolvent, while its members remain rich. Contracts may be made between the company and a shareholder, as if between two persons entirely distinct from each other. The shareh Iders may become so reduced in number that there is only one of them left but he and the company will be distinct persons for all that".

(3.) The memebers of a body corporate may become such members with limited or unlimited liability. All that depends on the incorporating charter which in this case is the Co-operative Societies Act Section 5 of the Andhra Pradesh Co-operative Societes Act, 1964 declares that a society may be registered with limited or unlimited liability. Under section 5 of the Act, the present society was registered with limited liability. The society which became a body corporate was not only different from its members but the liability of its members for the debts of the body corporate was also limited by the numbers of shares a member was holding and the value of those shares. It follows that the liability of the aforesaid 87 members of the Malakpet Toddy Tappers Co-operative Society Limited, Hyderabad, was limited by and could never exceed the value of the number of shares held by each one of them.