Judgment :- 1. The Travancore Central Cottage Industries Marketing Society No. 2502, a Society registered under the Travancore Co-operative Societies Act (V of 1112) is the appellant. The Society was the 2nd defendant in the court below. The plaintiff sued for recovery of a sum of Rs. 3041-8-0 from the defendants and by sale of certain movables entrusted by the 1st defendant to the 2nd defendant for sale. The plaintiff's case is that the 1st defendant borrowed a sum of Rs. 2000 from the plaintiff on the security of ivory articles entrusted by him to the 2nd defendant. The third defendant who was the Secretary of the 2nd defendant's Society undertook to repay the sum from the sale proceeds of the articles, after deducting commission for sales. The 2nd defendant contested and the main contentions were that by its constitution the Society could not give a guarantee of this kind, that the alleged letter of guarantee did not cast any liability on the 2nd defendant, and that the 3rd defendant was incompetent to bind the Society. The trial court overruled these contentions and decreed the suit against the 2nd defendant also; hence this appeal. 2. Ext. B dated 4-12-1946 is the alleged letter of guarantee given by the 3rd defendant to the plaintiff. The circumstances under which Ext. B was given may be briefly stated. The 1st defendant requested the plaintiff for a loan on the security of certain ivory articles which he had entrusted to the 2nd defendant for sale. As the articles intended to be pledged were then in the possession of the 2nd defendant, the plaintiff sent a letter Ext. III dated 29-11-46 to the 2nd defendant. Ext. III reads as follows: "We hold an application from Mr. P. Vasudevan Achari, Proprietor, Sri Ram Fine Arts and Ivory Works Trivandrum, for a goods loan accommodation in our bank to the extent of Rs. 2300 on the strength of his Ivory goods worth above Rs. 3000 accepted by you for sale. Hence kindly let us know whether you will be responsible for the amount and whether you will undertake to remit to us the proceeds of the articles as and when they are sold and thus to close his goods loan a/c with us within six months from date. 3000 accepted by you for sale. Hence kindly let us know whether you will be responsible for the amount and whether you will undertake to remit to us the proceeds of the articles as and when they are sold and thus to close his goods loan a/c with us within six months from date. Please also note that we must have the privilege to inspect the said goods in your show room within office hours, with a day's notice". 3. The 3rd defendant who was Secretary of the 2nd defendant's Society sent a reply to the same on the same date and Ext. IV is the office copy of the reply. Ext. IV stated "We beg to acknowledge receipt of your letter No 8537 dated 29-11-1946, regarding the proposed goods loan account of Mr. Vasudevan Achary. We shall have no objection in keeping the goods on your behalf and selling them for you under the following conditions: (1) The valuation of the goods should be done by you. We will sell the goods at the prices proposed by you for each item (ii) We will keep the articles on your behalf. An account will be opened in your name. The sale proceeds will be remitted to you weekly or fortnightly or monthly as the sale amount justify. (iii) We will charge 10% commission on sales. (iv) We will not be responsible for any damage of the goods due to long keeping etc. (v) We cannot undertake to sell them in six months. But we will be prepared to give you back the goods together with the accounts of the goods sold whenever you want them, provided you give us reasonable convenience. (vi) We shall have no objection in your inspecting your goods during office hours". 4. The plaintiff apparently was not satisfied with Ext. IV and this led to further discussions between the agent of the plaintiff's Bank and the 3rd defendant as a result of which the latter gave the letter Ext. B which is extracted below: "Further to our personal talk and previous correspondence we write to inform that you can advance an amount not less than Two Thousand and Three Hundred only to Mr. P. Vasudevan Achari on the security of this ivory goods entrusted with us for sale. We undertake to remit the amount by instalments (each instalment being due when the sales exceeds Rs. P. Vasudevan Achari on the security of this ivory goods entrusted with us for sale. We undertake to remit the amount by instalments (each instalment being due when the sales exceeds Rs. 300) within the course of an year". 5. It is on the basis of this letter that the 2nd defendant is sought to be made liable. Read in the light of the previous correspondence it is open to doubt whether Ext. B can be construed as a letter of guarantee. However the question is not of importance as the appellant must succeed on another ground, namely, that the 3rd defendant had no authority to bind the society. Ext. I contains the bye-laws of the Society and the powers of the officers of the Society are mentioned in bye-law No. 27 which is as follows: "The officers of the Society shall have the following powers: (1) The President shall have a general control over all the affairs of the Society; he shall also have power to appoint, fine, suspend or dismiss the employees of the Society (11) The Secretary shall be ex-officio Treasurer also and all documents shall be executed in his favour and by him. He shall be responsible for the executive administration of the Society subject to the control of the Board and shall have custody of all the assets, records, etc. of the Society. In any document executed by and on behalf of the Society, the President, the Secretary and two other members of the Board shall join." 6. The last clause makes it clear that without the junction of the President and two members of the Board the Secretary cannot execute any document for and on behalf of the Society. So far as Co-operative Societies registered under Act V of 1112 are concerned, the bye-laws take the place of the memorandum and Articles of Association of a joint stock company. The proposed bye-laws have to be produced along with the application for registration of the Society. Under S.10, registration of the Society will be made only if the proposed bye-laws are not contrary to the Act or to the rules. The bye-laws are also registered at the time of the registration of the Society and any subsequent amendment of the same has also to be registered. These bye-laws are not merely rules of internal management but these govern and regulate dealings of the. The bye-laws are also registered at the time of the registration of the Society and any subsequent amendment of the same has also to be registered. These bye-laws are not merely rules of internal management but these govern and regulate dealings of the. Society with outsiders. The Secretary is only an officer of the Society and he can bind the Society only when he acts within the scope of his authority as provided by the bye-laws. In dealing with this question the learned judge observed: "But I don't think Ext. B would come under the category of document contemplated in R.27. It is only a letter written in the ordinary course of administration. Secretary is the mouth piece of the board and under R.26 the board is responsible for the routine administration of the Society This is spoken to by Dw.1 also. (Dw.1 was for some time the President of the Society). An outsider like the plaintiff cannot therefore be blamed for having counted the Secretary as the person responsible for the routine administration of the Society, because the Secretary is held out to the outside world as the accredited agent of the society. If the society thinks that the Secretary has acted in excess of his authority it is up to them to proceed against him and not to penalise the plaintiff who acted in the bonafide belief that the Secretary is competent to represent the Society, I, therefore, hold that the Secretary is competent to execute a letter like Ext. B for the Society." 7. We are unable to uphold this view. The plaintiff was dealing with a registered society and was bound to ascertain the extent and scope of the powers of the officer who was acting on behalf of the society. Ext. B is not a letter written in the ordinary course of administration of the Society's affairs. An undertaking to discharge a debt of a member is not one of the objects of the Society and even if it were, the Secretary could not under bye-law 27 execute a deed undertaking such a liability. The plaintiff has acted with gross negligence in the matter and the 2nd defendant cannot be made liable under Ext. B. It was contended on behalf of the plaintiff-Respondent that the society had ratified the act of the 3rd defendant. The plaintiff has acted with gross negligence in the matter and the 2nd defendant cannot be made liable under Ext. B. It was contended on behalf of the plaintiff-Respondent that the society had ratified the act of the 3rd defendant. Reliance was placed on the fact that the sale proceeds of the articles were remitted by the 2nd defendant to the plaintiff. This does not amount to ratification of an undertaking to be liable for the 1st defendant's debt. The sale proceeds were normally due to the 1st defendant and all that the 2nd defendant did was to pay the same to the 1st defendant's nominee. 8. In view of the above conclusion the decree against the 2nd defendant must be set aside. We accordingly allow the appeal and modify the decree, directing that the suit as against the 2nd defendant will stand dismissed. The plaintiff will pay the costs of the 2nd defendant here and in the court below. Allowed.