Judgment

JAGANMOHAN REDDY, :- In the three writ petitions filed by the respective respondents challenging the vires of R. 70 of the Andhra Pradesh Co-operative Societies Act, 1964 - hereinafter called the the act - the Andhra Pradesh High Court held that rule to be ultra vires the Board of Directors of the Andhra Pradesh Co-operative Central Mortgage Bank Ltd., - hereinafter referred to as the Central Land Mortgage Bank. These appeals are by special leave against that judgment.

2. The respondent in Civil Appeal No. 2229/72 is an Assistant Accountant in the Chittor Primary Co-operative Land Mortgage Bank Ltd. In Civil Appeal No.2230/72 the respondents are employees of the different Co-operative Land Mortgage Banks. The respondent in Civil Appeal No. 2231/72 is the Nellore Co-operative Land Mortgage Bank Ltd. In the first of the appeals the petitioner/respondent complained that when he was due for promotion for the post of an Accountant, under Rule 70 his right to promotion based on seniority had been taken away. According to him, but for Rule 70, he would have had a right to promotion under, Bye-law 10 on the basis of his seniority among the Assistant Accountants of that Bank. The petitioners/respondents in the second of the appeals had urged that a co-operative society was a body corporate and the ultimate authority over that Society was vested in its general body under Section 30 of the Act, and the Managing Committee thereof had the right to manage all its affairs including the power to appoint, transfer and dismiss its employees. That power of the Society is sought to be interfered with not only by vesting the Board with power of superintendence under Section 115 of the Act but also by Rule 70 made pursuant of that section. Not only Section 115 and Rule 70 but also S. 116A of the Act, according to them, were wholly ultra vires the State Legislature. The respondent in the third of the appeals apprehends that Rule 70 takes away its right of appointment, dismissal and control over certain of its employees which render them liable to be transferred by the Central Land Mortgage Bank to other mortgage banks elsewhere in the State, which is an interference with the right of management of the Primary Land Mortgage Banks. The High Court, while negativing the contention that Sections 115 and 116A of the Act were ultra vires the State Legislature, has, however, held as already adverted to, that Rule 70 was ultra vires of Section 130(1) read with Section 115 of the Act. Before us, the arguments were confined to the question whether the High Court was right in declaring Rule 70 of the Rules to be ultra vires of S. 115 of the Act.

2. The impugned Rule 70 is purported to be made under sub-s. (1) of Section 130 read with Section 115 of the Act. These two sections and the impugned rule are as follows :

S. 115 - "Subject to the provisions of this Act, the Board shall have such power of supervision over the mortgage banks including power of appointment, transfer and disciplinary action in respect of the employees of mortgage banks as may be prescribed and may, with the previous approval of the Registrar, make such regulation as may be necessary for carrying out all or any of the purposes of this Chapter."

S. 130 - (1)"The Government may, by notification published in the Andhra Pradesh Gazette, make rules for carrying out all or any of the purposes of this Act, for the whole or any part of the State and for any class of societies."

R. 70 - (1) The Board of Directors of Central Land Mortgage Bank hereinafter referred to as Board shall constitute a centralised service for the mortgage banks in the State and with effect from such constitution the Board shall have power to make appointments to the posts brought under centralised service and the mortgage banks shall have no power to make appointments to such posts.

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(13) The Board shall have power to call upon the mortgage banks to contribute to the cost of service rendered by the Central Mortga