Section 13
of Co-Operative Societies Act 1948
Section 13
A registered society which has as one of its objects the disposal of any article produced or obtained by the work or industry of its members, whether the produce of agriculture, animal husbandry, forestry, fisheries, handicrafts or otherwise, may provide in its by-laws or may otherwise contract with its members—
(a)
that every such member who produces any such article shall dispose of the whole or any specified amount, proportion or description thereof to or through the society; and
(b)
that any member who is proved or adjudged, in such manner as may be prescribed by the rules, to be guilty of a breach of the by-laws or contract shall pay to the society as liquidated damages a sum ascertained or assessed in such manner as may be prescribed by the aforesaid rules.
(2)
No contract entered into under the provisions of this section shall be contested in any court on the ground only tbat it constitutes a contract in restraint of trade.