JACKSON CO-OPERATIVE CREDIT SOCIETY LIMITED vs CO-OPERATIVE BANKS & SOCIETIES EMPLOYEESFEDERATION & ORS.

The Supreme Court clarified that the term 'capital' under the Payment of Bonus Act, 1965 is not explicitly defined and should be interpreted in its general sense, allowing for deductions of up to 8.5% of capital invested by a Co-operative Society as per Section 6(d) of the Bonus Act. The Court held that amounts carried forward to a reserve fund under Section 66 of the Maharashtra Co-operative Societies Act, 1960 are also deductible from gross profits. The judgment of the Bombay High Court was set aside, affirming the appellant's right to deduct these amounts before calculating bonus liabilities.