JUDGMENT R.R. Rastogi, J. - The petitioner No. 1 is a co-operative society registered under the Co-operative Societies Act, 1965 (hereinafter referred to as the Society). It is asserted that the petitioner No. 2 Shri Atabal Singh Chauhan is the President, petitioner No. 3 is the Vice-President and petitioners Nos. 4 to 10 are members of the provisional committee of management of the society. It is claimed that under R. 405 of the U. P. Co-operative Societies Rules (hereinafter referred to as the Rules) the provisional committee of management of the society and its Chairman and Vice-Chairman were entitled to hold office till the committee of management was duly constituted in the first annual general meeting. By an order dated 9-12-1977 the State Government nominated 10 members of the Managing Committee of the Society acting under Section 34 of the Act. It is this order which is sought to be quashed in this writ petition. 2. On behalf of the petitioners the impugned order was challenged on various grounds, that is, firstly, that no such order could have been made by the State Government under Section 34 of the Act because the conditions required under sub-sec. (2) thereof were not fulfilled; secondly; that sub-sec. (2) of Section 34 is violative of Arts. 14, 19 (1) (g) and 31 of the Constitution; thirdly, that no reasons were given by the State Government in this order nor was there any application of mind. In fact it was only a mechanical order and was thus made in violation of the principles of natural justice; fourthly, that the impugned order was passed by the State Government in colourable exercise of its power, and lastly, that Section 34 is repugnant to Sections 28, 29 and 32 of the Act. 3. In order to appreciate the controversy we may refer to sub-sec. (2) of Section 34 under which the impugned nomination have been made by the State Government as also to sub-sec. (3) which is relevant. They read: "34. Nominees of the Government on the Committee of Management: (1) ..... (2) Notwithstanding anything contained in sub-sec. 3. In order to appreciate the controversy we may refer to sub-sec. (2) of Section 34 under which the impugned nomination have been made by the State Government as also to sub-sec. (3) which is relevant. They read: "34. Nominees of the Government on the Committee of Management: (1) ..... (2) Notwithstanding anything contained in sub-sec. (1), the State Government shall have the right to nominate up to two-thirds of the total number of members of the committee of Management including the Chairman, if - (a) the share of the State Government in the share capital of the society is not less than sixty per cent; or (b) the State Government has given loans or made advances to the society, or guaranteed the repayment of principal and repayment of interest on debentures issued by the society or guaranteed the repayment of principal and payment of interest on loans or advances of the society in amounts not less than sixty per cent, in the aggregate of the total amount so borrowed by the society: (c) the working capital provided to the society by the State Government or the Central Government by both is not less than sixty per cent of the amount of the total working capital (to be determined in the prescribed manner) of the society: Provided that in the case of a society formed with the object of running an undertaking for the manufacture; preservation, processing or distribution of goods, or mining, or general of distribution of electricity, and having a total working capital (to be determined in the prescribed manner) of not less than such amount as may be prescribed, not less than two members so nominated by the State Government shall be Government servants. (d) The right once accrued under sub-sec. (2) shall continue until the percentage of the amount referred to in cl. (a), cl. (b) or cl. (c) as the case may be, of that sub-section goes down to less than fifty. (4) .......... 4. It would be seen that sub-sec. (2) of Section 34 gives a right to the State Government notwithstanding anything contained in sub-sec. (1) to nominate up to two-third of the total members of the committee of management including the Chairman in the event of either of the three contingencies provided under cls. (4) .......... 4. It would be seen that sub-sec. (2) of Section 34 gives a right to the State Government notwithstanding anything contained in sub-sec. (1) to nominate up to two-third of the total members of the committee of management including the Chairman in the event of either of the three contingencies provided under cls. (a), (b) and (c) namely, if the share of the State Government in the share capital of the society is not less than sixty per cent, or if the State Government has given loans or made advances to the society or guaranteed the repayment of principal and repayment of interest on debentures issued by the society or guaranteed the repayment of principal and payment of interest on loans or advances of the society in amounts not less than sixty per cent in the aggregate of the total amount so borrowed by the society; or in the working capital provided to the society by the State Government or the Central Government by both is not less than sixty per cent of the amount of the total working capital to be determined in the prescribed manner. This right shall continue unless the percentage of the amount referred to in these clauses, as the case may be, goes down to less than fifty. 5. In exercise of the powers conferred under Section 130 of the Act the State Government framed the U. P. Co-operative Societies Rules. Under Rule 13 the Registrar may frame model bye-laws for each class of society or societies and make such changes therein from time to time as he may consider necessary. In exercise of this power bye-laws of the petitioner society were framed. Bye-law 5 provides for the categories of members. They are three; ordinary, nominal and associate. In the category of ordinary members State Government and Central Government are also included. Bye-law 6-Ka says that the primary members will be those members who would sign the application for registration of the society and thereafter a person willing to become a member of the society shall have to make an application on prescribed form to the Secretary of the society and: - "Aise Prarthana Patra Kee Swikriti Ya Aswikriti Ka Adhikar Dugdha Sangh Kee Committee Ko Hoga." In other words the discretion to accept or to reject an application is vested in the committee of management. Further, such an application would be required to pay an admission fee of Rs. 5. Bye-law 13 provides for the capital of the society which would, inter alia, be in the form of admission fee, share capital, loans and advances, Government grants etc. Bye-law 14 says that each share of the society shall be of the value of Rupees 100 which can be purchased by ordinary members as mentioned in bye-law 5 (1) (a) (b) (c) and (d). We may also refer to Bye-laws 15 and 16. Bye-law 15 says that in accordance with the agreement executed between the State Government and the society shall have a right to refund the share capital of the State Government and this the society can do at any time it likes. Bye-law 16 says that the ordinary members as per details given in Bye-law 5 Ka (1) shall have to purchase at least one share. It would appear from a resume' of some of the bye-laws as made above that the State Government can become an ordinary member of the petitioner society and secondly that in case the society so desires it can pay back the share capital of the State Government. 5-A. Now the first question that falls for consideration before us is as to whether the State Government could make an order under Section 34 (2) of the Act. It has been stated in the counter-affidavit of Sri Sundar Lal Verma, who is an Upper Division Assistant in Pashudhan Anubhag-4, Civil Secretariat, Lucknow that the State Government has got major shares in all the co-operative societies and in the petitioner society it has more than sixty per cent shares and as such it has got a right to nominate two-third of the total number of members of the committee of management. In para 19 it has been stated that on that account the State Government nominated 10 out of the total 15 members of the society. In rejoinder affidavit in reply to para 19 aforesaid of the counter-affidavit, it has been stated by Atbal Singh, petitioner No. 2 that the State Government has less than 50 per cent shares in the society and it has no right to nominate two-third of the members of the Managing Committee of the society. In rejoinder affidavit in reply to para 19 aforesaid of the counter-affidavit, it has been stated by Atbal Singh, petitioner No. 2 that the State Government has less than 50 per cent shares in the society and it has no right to nominate two-third of the members of the Managing Committee of the society. In the supplementary counter-affidavit filed by Devi Prasad Sahu, Upper Division Assistant in Pashudhan Anubhag-4, Uttar Pradesh Sashan, Lucknow, it has been stated in paragraph 5 that the total share capital of the petitioner society as per the balance-sheet as on 30th June, 1977 was Rs. 89,200 out of which the share capital contributed by the State Government was Rs. 81,690 and by the other members Rs. 7,600. Thus the percentage of shares held by the State Government in the petitioner society comes to 91.4 per cent and the requirement of Section 34 (2) of the Act was clearly fulfilled. Further in para 6 it has been stated that the total investment of the State Government in the petitioner society comes to Rs. 10,41,500 including the share capital of Rs. 81,600. In supplementary rejoinder-affidavit Atbal Singh has stated in paragraph 3 that the share capital of the society is Rupees 1,33,438 out of which the share capital of the members of the society is Rupees 67,438 and that of the State Government is Rs. 66,000. It would appear, therefore, that least according to the petitioners themselves the share capital of the State Government in the petitioner society is Rs. 66,000. However, we have to see as to what was the total share capital of the petitioner society as on 30th June, 1977. For this purpose the most reliable document will be the balance-sheet of the petitioner society as on that date. The statement made by Sri Devi Prasad Sahu in the supplementary counter-affidavit is on the basis of that balance-sheet. At the time of the arguments the original balance-sheet as also the share registers were shown to us. The first register is for the co-operative year 1972-73 and there were 20 members of the society. This register was duly audited in August, 1974. The second register is for the co-operative year 1973-74 and that was also duly audited. There were 26 members in that year. The first register is for the co-operative year 1972-73 and there were 20 members of the society. This register was duly audited in August, 1974. The second register is for the co-operative year 1973-74 and that was also duly audited. There were 26 members in that year. The third register shown to us was for the relevant year, that is, 1976-77 in which we found that there were 47 members. All the relevant entries were made in that register. At present there are 115 primary societies who have made deposits in the petitioner society but only 47 have been made members of it. These are the own registers of the petitioner society and in our opinion they can be relied upon for the decision of the question under consideration. Thus, as per the balance-sheet and as per this register the total share capital of the petitioner society as on 30th June, 1977 was Rs. 89,200 out of which the share capital of the State Government is Rs. 81,600 and that of other members is Rs. 7,600. On behalf of the petitioner strong reliance was placed on the annual progress report for the year 1976-77 issued by Dugdha Shala Vikash Vibhag, Uttar Pradesh, Lucknow. It was pointed out that in this report as would appear from Annexure 9.2 at page 40 there were 114 primary societies which were members of the petitioner society and their share capital in the petitioner society was Rs. 67,348. We do not think that any reliance can be placed on this document because it is not known as to on what basis it was prepared. However, these figures do not tally with the petitioner Societys own balance-sheet and registers. What transpires in this behalf is that even though 114 primary societies wanted to become members of the petitioner society and also made necessary deposits the application of only 47 was accepted by the Secretary of the Society as contemplated by bye-law 6 referred to above. Those 47 societies, therefore, become members of the petitioner society and the value of only their share could be added to the share capital of the society. The applications of the remaining societies were not accepted by the Secretary and the deposits made by them were kept in 'Amanat Khata. Those 47 societies, therefore, become members of the petitioner society and the value of only their share could be added to the share capital of the society. The applications of the remaining societies were not accepted by the Secretary and the deposits made by them were kept in 'Amanat Khata. Obviously, those societies would neither be treated as members of the petitioner society nor the deposits made by them could be added to its share capital. And for this anomalous situations none else, but the petitioner is responsible. Our conclusion, therefore, is that the share capital of the State Government in the petitioner society as on 30th June, 1977 was more than sixty per cent and thus under Section 34 (2) of the Act it could nominate two-third members of the committee of management including the Chairman and the Vice-Chairman. 6. Then we come to the main argument advanced before us by Shri G. C. Bhattacharaya, learned counsel for the petitioners. According to Shri Bhattacharya Section 34 is violative of Art. 14 of the Constitution inasmuch as it does not provide any guidelines and because the State Government has got arbitrary and unlimited powers and further these provisions are against the object which the Act seeks to secure. It was emphasised that there was no rational nexus between the power given to the State Government and the object which the Act seeks to achieve. We are unable to agree with these submissions. 7. As observed by a Full Bench of this Court in Civil Misc. Writ Petn. No. 7632 of 1971 (FB) U. P. State Co-operative Land Development Bank Ltd. v. State of U. P. as per decision dated 16-5-1973 - "The principles that men rule and not capital and one member one vote are not applicable to co-operative societies where liability of members is limited by shares, in such co-operative societies capital must have a say in the management. The idea of nomination of chairman and members of the committees of management by the Government which is a share-holder or gives aid to the societies, is also not a new one. Cl. (g) of sub-sec. (2) of Section 43 of the Cooperative Societies Act, 1912 empowered the provincial (now State) Government to make rules which may 'provide for the appointment, suspension and removal of the members of the committee. Cl. (g) of sub-sec. (2) of Section 43 of the Cooperative Societies Act, 1912 empowered the provincial (now State) Government to make rules which may 'provide for the appointment, suspension and removal of the members of the committee. This provision negatived the so-called democratic principles of election of the members of the committee of management." In our opinion these observations of the Full Bench provide a complete answer to the objection taken by Sri Bhattacharya that the provisions contained in S 34 run counter to the object of the Act which is democratisation and de-officialisation in the case of co-operative movement. 8. In the case of U. P. State Land Development Bank (supra) the competence of the U. P. Legislature to enact Section 34 of the Act as amended by the U. P. Co-operative Societies (Amendment) Act, 1972 (U. P. Act No. 1 of 1972) was questioned. It appears that the learned single Judge was inclined to accept this contention but when his attention was drawn to a decision of a Division Bench of this Court in U. P. Co-operative Federation Ltd. Lucknow v. State of U P. (Writ Petn. No. 4700 of 1970, decided on 8-12-1970) (All) where the provisions of the unamended S- 34 were held to be constitutionally valid, he referred the following question for the opinion of a larger Bench: - "Where the first proviso to Section 34 sub-sec. (2) of the U. P. Co-operative Societies Act of 1965 and Sections 4 and 5 of the U. P. Co-operative Societies (Amendment) Act, 1972 in respect of Co-operative Societies doing banking and financial business, are within the legislative competence of the State Legislature." When the matter came up before the Full Bench the petitioner challenged the provisions of Section 30 (1) and Section 34 in so far as they empower the State Government to nominate, in the circumstances set out therein, the Chairman and/or members of the committee of management. The Full Bench was of opinion that the impugned provisions substituted by Sections 39 (1) and 34 were within the legislative competence of the State Legislature. Thereafter, when the case came up again before the learned single Judge, an attempt was made to challenge the validity of the Amendment Act by reference to Article 14 of the Constitution on the ground that it did not provide guideline for the exercise of power by the State Government. Thereafter, when the case came up again before the learned single Judge, an attempt was made to challenge the validity of the Amendment Act by reference to Article 14 of the Constitution on the ground that it did not provide guideline for the exercise of power by the State Government. This contention was repelled by the learned single Judge and he held: - "The power which the State Government exercises under Section 34 of the Act is on the basis of capital subscribed by it to co-operative societies. The extent of the power quo-nomination of members of the committee of Management and Chairman, vary with the share capital or loan or guarantee subscribed or given by the State Government. The powers so exercised cannot be said to be one which the State Government exercises in discharge of its sovereign function. It is one which is integrally connected with its status of, creditor or a subscriber of the co-operative society. It is difficult to see as +o how Art. 14 can possibly apply to exercise of Such a power. In my view, Art. 14 of the Constitution applies only to such acts as are referable to the exercise of sovereign power by the State Government. This apart even if it would be assumed that a challenge to this section can be entertained on the basis of Art. 14 of the Constitution, the grievance that Sec, 34 violates Art. 14 appears to be without substance on merits. As has been seen Section 34 confers powers of nomination on the State Government. This power is undoubtedly much wider than the power enjoyed by the other members of the society but the other members of the society cannot be put on the same footing as the State Government The State Government can legitimately be treated differently from other members or bodies as it constitutes a class by itself." We entirely agree with the view taken by the learned single Judge that Section 34 does not violate Art. 14 of the Constitution, mainly because the power exercised by the State Government under this section is not in discharge of its sovereign function but is one which is integrally connected with its status as a creditor or a subscriber of the co-operative society. Under Section 34 of the Act the State Government does not make any order against any person so that it be necessary to give an opportunity of hearing to such person. There is absolutely no question of the principles of natural justice being attracted when the State Government chooses to exercise the right for nomination of members of the committee of management. As has been emphasised by the Full Bench in the aforesaid decision capital must have a say in the management and when the liability of members of a co-operative society is limited by shares, each member is entitled to see that his interest in such a society or company is properly safeguarded. It is for this purpose that the State Government, which can be an ordinary member of a co-operative society, as was in the present case, has been given a right to have its nominees in the committee of management. The proportion of such nominees depends on the extent of shares held and thus, where the share capital subscribed or loan guaranteed or given by the State Government exceeds sixty per cent the State Government can nominate two-third of the members of the Committee of Management as also the Chairman and the Vice-Chairman. The submissions made on behalf of the petitioner in this behalf are based on irrelevant aspects and to our mind Section 34 in no way violates Art. 14 of the Constitution. There is absolutely no fundamental right involved. If at all it involved violation of some statutory right but that would not attract Art, 14. We have already shown that if the society so desires it can repay the share capital of the State Government and thus eliminate the so-called interference by the State Government in its affairs but so long as the State Government is share-holder of the society, it can with full justification safeguard its interest therein. The State Government, therefore, under Section 34 exercises a right and not a power and hence there is no question of any discrimination. 9. This matter may be examined from yet another aspect. As required by Section 29 of the Act the Committee of Management in which vests the management of the society is to be constituted in accordance with the provisions contained in the Act, the rules and the bye-laws. 9. This matter may be examined from yet another aspect. As required by Section 29 of the Act the Committee of Management in which vests the management of the society is to be constituted in accordance with the provisions contained in the Act, the rules and the bye-laws. Bye-law 34 provides for the constitution of the committee of management of the petitioner society. It says that the committee shall consist of 151 members including the Chairman and the Vice-Chairman. The break-up of the) members is given in clauses Ka to Cha. In clause Cha it is provided that there shall be two nominees of the State Government in case it is a member of the society. Then comes bye-law 35-Ka which says that notwithstanding, the provisions contained in bye-law 34, the State Government shall have a right to make the nomination of the members of the committee of management including the Chairman in the circumstances specified in that bye-law. It would appear that the society as well as its members are bound by its bye-laws and there is a clear provision that the State Government shall have a right to make the nomination of the members of the committee of management in accordance with Section 34 of the Act. This being the position we do not think that the petitioner society can have any grievance against the nomination of members to its committee of management by the State Government. 10. Coming to the next argument advanced on behalf of the petitioners it was submitted by Sri Bhattacharya that Section 34 of the Act violates Article 19 (1) (f) and (g) of the Constitution. In view of the decision which we have taken above that under Section 34 of the Act the State Government, merely exercises a right and not a power and that the power to exercise such right has been given to it by the Legislature and the exercise of such right is not in its capacity as a sovereign but in the status of a creditor or a share-holder, this limb of the attack as well is not of any consequence. Apart from this imposition of reasonable restriction on fundamental rights is justified. Apart from this imposition of reasonable restriction on fundamental rights is justified. In P. Bala Kotaiah v. Union of India ( AIR 1958 SC 232 ) where the services of the appellant were terminated by the orders of the railway authorities under Rule 3 of the security rules, the view taken was that the impugned order did not prevent the appellants from continuing to be communist or trade unionist. They have no doubt a fundamental right to form association under Article 19 (1) (c), but they have no right to be continued in employment by the State and when their services were terminated by the State Government they cannot complain of the infringement of their constitutional rights and no question of violation of Art. 311 arises. Reference may also be made to a Division Bench decision of this court in Sultan Singh v. Assistant Registrar, AIR 1972 All 159 : (1971 All LJ 943). In that case one of the contentions raised on behalf of the petitioner was that Section 17 (2) of the Act and Rule 44B of the Rules contravened Article 19 of the Constitution inasmuch as they deprived the petitioners of the fundamental right to be ordinary members of two banks and to participate in their affairs. That contention was repelled and it was observed (at p. 952 of All. L. J.): - "We cannot see how a citizen enjoys a fundamental right to participate in the affairs of a co-operative society. This is a right which belongs only in the rules of the society It is from the rules of the society that the status of membership arises and the rights pertaining to such status are enjoyed. There is no title in the native (sic) of a fundamental right to such status and rights." The contention that this Act is a piece of colourable legislature designed to effectuate the political ends of the party in power was also repelled. 11. In view of the discussion above we do not agree with the submissions made on behalf of the petitioners that the impugned provision in any way violates Article 19 (1) (f) and (g) of the Constitution. With regard to Article 31 as well our view is the same since under Section 34 it is the exercise of a right and not a power which has been conferred by the legislature on the State Government. With regard to Article 31 as well our view is the same since under Section 34 it is the exercise of a right and not a power which has been conferred by the legislature on the State Government. We are not inclined to agree that the effect of this provision is wholesole nationalisation through backdoor. When the State Government makes nomination under Section 34 to safeguard its interest as a major share-holder or creditor and not as sovereign no question of nationalisation of a co-operative society arises. 12. According to Shri Bhattacharya since Section 34 did not make it obligatory on the part of the State Government to make nominations but left the matter to its discretion it was open to it to practice discrimination by making nomination in case of one society and not making any nomination in respect of another even though both were similarly situated. This submission too is unacceptable. Since the action of the State Government in making nomination under Section 34 is not referable to the exercise of its. sovereign power but is meant to safeguard its interest in the society and recourse to it is taken by it in the exercise of its rights in this; behalf no question of discrimination. arises. If it fails to take action under Section 34 in respect of any society it does so at its own risk and to its own detriment. 13. Shri Bhattacharya after referring to certain facts stated in the writ petition to the effect that the petitioners were compelled to file several writ petitions earlier also challenging actions taken by some officers of the Co-operative Department, urged that the impugned nominations had been made in furtherance of a scheme to deprive elected members of their right to manage the affairs of the petitioner society and the action of the State Government in this behalf was in colourable exercise of power. This contention too cannot be accepted for two reasons. Firstly, the nominations, as seen above, have not been made by the State Government in the exercise of any power and as such no question of colourable exercise of power arises. Secondly, the actions which were challenged in the earlier writ petitions were not actions of the State Government. Action of every officer of the Co-operative Department cannot be kept in par with an action of the State Government as such. Secondly, the actions which were challenged in the earlier writ petitions were not actions of the State Government. Action of every officer of the Co-operative Department cannot be kept in par with an action of the State Government as such. It has not been proved to our satisfaction that the State Government as such was responsible for the actions which were impugned earlier. 14. In regard to the other submissions made on behalf of the petitioners, in our opinion, they as well are not of much consequence. The State Government was not required to give any reason inasmuch as it was not passing any quasi-judicial order but it was in exercise of its rights as a creditor or guarantor that the members were nominated by it. There was no question of violation of any principles of natural justice as has been indicated above. 15. The last submission made by Shri Bhattacharya is that Section 34 is repugnant to Sections 28 and 29 of the Act. It was pointed out that Sections 28 and 29 make elaborate provisions to safeguard any mismanagement of the affairs of this society and as such there was no necessity to make a provision Such as the one contained in Section 34 to nominate members and Chairman of the society. A bare perusal of these sections makes it clear that the scope of Sections 28 and 29 is different than that of Section 34. The earlier two sections provide safeguards for the proper management of the society as such where as Section 34 entitles the State Government to make nominations to safeguard. Its own interest as a major share-holder or creditor. They operate in different fields and no question of Section 34 being repugnant to Sections 28 and 29 arises. 16. Before parting with the case we may point out that counsel for the petitioners cited several cases laying down the scope of Articles 14, 19 and 31 of the Constitution. The principles laid down in this regard are by now well settled. The crux of the problem is whether they are applicable to the facts of the instant case. 16. Before parting with the case we may point out that counsel for the petitioners cited several cases laying down the scope of Articles 14, 19 and 31 of the Constitution. The principles laid down in this regard are by now well settled. The crux of the problem is whether they are applicable to the facts of the instant case. In the view that nomination under Section 34 (2) of the Act is made by the State Government in the exercise of the rights conferred on it to safeguard its interest in the society as a major share-holder or creditor and not in the exercise of its sovereign power and that Articles 14, 19 or 31 of the Constitution are consequently not attracted, we have not found it necessary to deal with those cases. 17. In view of the foregoing discussion, the writ petition has no merits and it is accordingly dismissed. However, in the circumstances of the case there will be no order to costs.