P L D 1964 Dacca 222 (PLP)

(a) otherwise than out of profits certified by the audit officer to have been actually realised ; or (b) without the previous sanction of the Registrar, if the audit officer reports that any asset is bad or doubtful and also recom mends that such sanction is necessary Provided that the audit officer shall not so recommend if such asset is adequately covered. (3) Subject to the provisions of subsection (2), after the pro portion required by subsection (2) of section 56 has been carried to the reserve fund from the net profits of any year, the balance of such profits, together with undistributed profits of past years if any, may, to such extent and under such conditions as may be prescribed, be distributed as dividend among the members or paid as bonus or remuneration to a member or employee for any specific service rendered to the society. (4) No contribution under section 58 shall be paid otherwise than out of profit actually realised."

5. This is a provision in bar which applies to Co‑operative Societies with unlimited liability as well as such societies in general. Under subsection (1) it prohibits (i) distribution of profits in the case of the former absolutely and (ii) division of any part of the funds by way of dividend or bonus or otherwise among the members save as otherwise provided in subsection (2) in the case of the latter. Under subsection (2) all Co‑operative Societies, whether with limited liability or otherwise, are debarred from paying any dividend or bonus (i) except out of the profits and (ii) unless such profits have been certified by the Audit Officer to have been actually realised or in the cases coming within the scope of clause (b) sanction of the Registrar has been obtained. The disputed payments in the present instance do not appear to come within the mischief of any of the aforesaid restrictions contemplated by section

57. Obviously this was not a case of division of the fund of the Society among its members nor can it be treated as payment of bonus, firstly because there was admittedly no profit out of which alone bonus might be paid, and secondly, because bonus, in my view, is not, or does not include honorarium, Bonus is an "allowance over and above the ordinary dividend of a Company either In the form of extra money payment or otherwise". . It is inextricably related to and dependent upon profits and the scheme of the relevant Act, too, appears to be "no profit, no bonus". An honorarium on the other hand, means voluntary donation either in consideration of service which admit of no compensation in money or in gratitutd for services rendered. Prima facie, it implies a gratuitous payment but it also means a fee for services rendered. In the present case the disputed payments were obviously made to an unsalaried employee or functionary as such for service rendered by him, which were, in fact, recognised as laudable and earned him thanks in the Bank's Account Report, Exh.

2. These were also made independently of profits and not out of profits, of which indisput ably there was none during the relevant period, and were thus in the nature of reward, emolument or remuneration as distinct from bonus. And I have already observed that this was not a case of division of the fund of the Society and its members. That is because the payments in question were made to an employee as such and even the fact that the employee concerned happened also to be a member, cannot, in my opinion, make any difference. Thus neither subsection (1) nor subsection (2) of section 57 of the Co‑operative Societies Act, 1940; appears to be applicable to the disputed payments made in this case.

6. The only question that remains to be seen is whether the said payments were authorised, i.e., could be made within the frame work of section 20 which precisely is the provision relied upon in that behalf. That section runs as follows: "20. (1) The final authority of every Co‑operative Society shall vest in the general body of members in General Meeting. Provided that, in such circumstances as may be prescribed, the final authority may vest in the delegates of such members, elected in the prescribed manner and assembled in General Meeting. (2) The General Meeting shall be summoned and shall exercise its authority in such manner as may be prescribed."

7. Again under bye‑law 34 (I), the supreme authority on all matter relating to the administration of the Bank is the general body of members meeting periodically for the purpose of main taining a general supervision over the business of the Bank, and in particular, over the acts of the Managing Committee. The general body is also specifically declared to be "competent to take all steps that may be considered necessary in the interest of the Bank." Obviously it is in exercise of this authority that the general body of the members in their meeting accepted the recom mendation of the Board of Directors and granted the disputed honoraria on the same footing as salary is sanctioned and dis bursed to the paid staff, for which, too, no specific provision is made, in the Act, bye‑law or rules. As already found, the dis puted payments do not come within the mischief of section 57 and no other provision in any of the said enactments could be shown to stand in their way either. So where, as in this case, a statutory body is vested with supreme authority in respect of the purpose for which it is set up or of any specified matter relating thereto and does something connected with such purpose or specified matter, that act so done can be successfully impeached only if it can be shown to be hit by any provision in the statute under which it is set up or the bye‑laws or rules enacted thereunder. That is, because of the act being in excess of the power conferred but where no question of such excess is involved, the act in question must prevail as competent and valid. In my opinion, therefore, it was within the competence of the General Meeting to sanction the disputed honoraria and that in drawing the same, the defend ant‑petitioner committed no irregularity or illegality.

8. The suit appears to have thus been correctly decided by the learned Appellate Court and its decision calls for no interference. This Revision, is, therefore, dismissed. In the circumstances of the case, I, however, make no order as to costs. S. Q./K. B. A. Petition dismissed.