PENTAKOTA SRIRAKULU vs THE CO-OPERATIVE MARKETING SOCIETY LTD.

The Supreme Court held that the proceedings under Section 51 of the Madras Co-operative Societies Act, 1932, were valid as the dispute regarding the retention of money by the appellant, a member of the management, constituted a claim against a person in management for fraudulent retention of society funds. The Court clarified that the case did not fall under Section 49, as the nature of the dispute was not merely about the business of the society but involved allegations of illegal transactions. The appeal against the High Court's dismissal of the writ petition was therefore rejected, affirming the Registrar's authority to appoint an arbitrator under Section 51(2).