G. T. NANAVATI, S. H. SHETH, J. ( 1 ) THIS group of petitions raise common questions of law. The facts which have led to the emergence of the controversy are as follows. In 1974 the Parliament amended the Companies Act 1956 and inserted sec. 58a. Sec. 58a read with sec. 642 empowered the Central Government to make rules in relation to the deposits which a company might receive from its shareholders or the public. Sec. 58a came into force on 1/02/1975. On 3rd February 1975 the Cenentral Government made Rules which are known as the Companies (Accep- tance of Deposits) Rules 1975 They were amended from time to time. However on 30/03/1978 Rule 3a was inserted and it came into force on 1/04/1978. Under this rule a company is required to deposit or invest a sum which shall not be less than ten per cent of the amounts of its deposits maturing during the year ending on the 31st March next year. The modes of deposits or investment have been specified in that rule. Several companies which have filed these petitions felt aggrieved by this rule because a part of the deposits which they might accept from their members or the public would not be available for being ploughed into business. ( 2 ) THE averments made in Special Civil Application No. 1138 of 1978 bring out clearly the result which follows from the implementation of rule 3-A. Prior to 31/03/1978 Arvind Mills Limited-the petiti- oner in Special Civil Application No. 1138 of 1978-accepted deposits amounting to Rs. 1 9 69 402 which would mature during the year commencing on 1/03/1978 and ending on 31/03/1979. Accor- ding to the petitioner it was required to deposit or invest under rule 3 a sum of Rs. 10 96 940 on or before 30/06/1978. The grieva- nce which the petitioners are making is that the rule-making authority can make rules prescribing the limit upto which the manner in which and the conditions subject to which the deposits may be invited or acce- pted by a company. 10 96 940 on or before 30/06/1978. The grieva- nce which the petitioners are making is that the rule-making authority can make rules prescribing the limit upto which the manner in which and the conditions subject to which the deposits may be invited or acce- pted by a company. However in the name of prescribing conditions subject to which deposits may be invited or accepted by a company the rule-making authority cannot lay down a restrictive and onerous condition such as one incorporated in rule 3a which either wholly or partly depri- ves a company of the benefit of a part of the deposits already accepted by it. The petitioners therefore contend that it is beyond the power of the rule-making authority to make rule 3a which forces or compels a company to invest or deposit in any one of the three kinds of securities specified in rule 3a a part of the deposits accepted by it. The purpose of accepting the deposits is defeated when a company which accept deposits is required to part with what it has legitimately received from the public or its members. Principally upon this grievance all these petitions have been founded. ( 3 ) THERE are certain petitions not all - in which the constitutional validity of sec. 58a has been challenged. However in all the petitions rule 3-A has been challenged on the ground that it is ultra vires sec. 58a of the Companies Act 1956 and Art. 14 of the Constitution. ( 4 ) THE contentions which arise from the pleadings are as follows: (1) Sec. 58a of the Companies Act 1956 is ultra vires Arts. 245 and 246 of the Constitution. (2) Rule 3a of the companies (Acceptance of Deposits) Rules 1975 is ultra vires sec. 58a of the Companies Act 1956 inasmuch as it transgresses the scope and ambit of sec. 58a. (3) In any case Rule 3a is ultra vires sec. 58a to the extent to which it is made to apply to the deposits accepted by a company prior to 1/04/1978 and maturing thereafter. (4) Rule 3a violates Art. 14 and is arbitrary because it defeats and frustrates the very purpose of allowing a company to receive deposits from its members or the public. 58a to the extent to which it is made to apply to the deposits accepted by a company prior to 1/04/1978 and maturing thereafter. (4) Rule 3a violates Art. 14 and is arbitrary because it defeats and frustrates the very purpose of allowing a company to receive deposits from its members or the public. ( 5 ) BEFORE we proceed to examine these contentions it is necessary to state that no other contention has been raised by the learned Advo- cate-General who appears on behalf of the petitioners in some cases and by Mr. Nanavaty who appears on behalf of the petitioners in other cases. It appears that contention in regard to Art. 19 (1) (g) has been raised in some of the petitions but it has not been raised before us. It is also necessary to clarify that the first contention arises out of pleadings in some of the petitions and does not arise in all the petitions. ( 6 ) BEFORE we proceed to examine the contentions which have been raised before us it is necessary to have a look at sec. 58a of the Com- panies Act 1956 Sub-sec. (1) provides an under: the Central Government may in consultation with the Reserve Bank of India prescribe the limits upto which the manner in which and the conditions subject to which deposits may be invited or accepted by a company either from the public or from its members. This is the most material part of the section which requires our conside- ration. Sub-sec. (2) lays down the procedure which is necessary to be followed before a company or any person on behalf of a company invites deposits from the members of the public or from its shareholders It inter alia requires that an advertisement shall be published showing the financial position of the company and that it shall be issued in such form and in such manner as may be prescribed. Sub- sec (3) provides for matters relating to the renewal after sec. 58a came into force of the deposits which were received before that section came into force. Sub- sec. (4) requires a company under the circumstances specified therein to repay the deposits to the depositors within thirty days or such other time as the Central Government may allow in that behalf. Sub-sec. 58a came into force of the deposits which were received before that section came into force. Sub- sec. (4) requires a company under the circumstances specified therein to repay the deposits to the depositors within thirty days or such other time as the Central Government may allow in that behalf. Sub-sec. (5) lays down consequences of failure on the part of a company to repay the deposits in accordance with the provisions of sub-sec. (3) or sub-sec. (4) of sec. 58a. sub-sec. (6) lays down consequences if a company acce- pts or invites any deposit in excess of the limit prescribed under sub- sec. (1) or in contravention of the manner or condition prescribed under that sub-section or in contravention of the provisions of sub-sec. (2 ). Sub-sec. (7) excludes from the operation of sec. 58a banking companies and such other companies as the Central Government may after consul- tation with the Reserve Bank of India specify in that behalf. It also lays down that except the provisions relating to advertisement contained in clause (b) of sub-sec. (2) nothing in sec. 58a shall apply to such classes of financial companies as the Central Government may after con- sultation with the Reserve Bank of India specify in that behalf. Sub-sec. (8) which was inserted in 1977 empowers the Central Government to grant extension of time to a company or a class of companies in respect of matters specified therein. The rule-making power is found in sub- sec. (1) of sec. 58a which we have extracted above. Sec. 642 also confers upon the Central Government rule-making power. Sub-sec. (1) of sec. 642 provides: (1) In addition to the powers conferred by sec. 641 the Central Government may by notification in Official Gazette make rules: (a) for all or any of the matters which by this Act are to be or may be prescribed by the Central Government; and (b) generally to carry out the purposes of this Act. Sub-sec. (2) of sec. 642 empowers the Central Government to make a rule under sub-sec. (1) for punishing a person who contravenes the pro- visions of sub-sec. (1 ). Sub-sec. (3) requires the Central Government to lay on the table of the House the rules which it makes under the Act. ( 7 ) WE now turn to the Rules. Sub-sec. (2) of sec. 642 empowers the Central Government to make a rule under sub-sec. (1) for punishing a person who contravenes the pro- visions of sub-sec. (1 ). Sub-sec. (3) requires the Central Government to lay on the table of the House the rules which it makes under the Act. ( 7 ) WE now turn to the Rules. Rule 2 (b) defines deposit in the following terms: deposit means any deposit of money with and includes any amount borrowed by a company but does not include. . . . . . . . . . . . . . . . . . . . It is not necessary to reproduce in this judgment what is excluded from the concept of deposit. Rule 2 (c) defines depositor in the following terms: depositor includes any person who has given a loan to a company. Rule 2 (d) defines the expression free reserves. Rule 3 lays down the manner of acceptance and renewal of deposits by companies Rule 3 (2) provides: on and from the commencement of these rules no company shall accept (1) any deposit against an unsecured debenture or any deposit from a share. holder or any deposit guaranteed by any person who at the time of giving such guarantee is a director of the company. . . . . . . . . . . . . . . . We now turn to rule 3a which makes provision for maintenance of liquid assets. It reads as follows: 3 (1) Every company shall before the 30th day of April of each year deposit or invest as the case may be a sum which shall not be less than ten per cent of the amount of its deposits maturing during the year ending on the 31st day of March next following in any one of more of the following methods namely: (a) in a current or other deposit account with any scheduled bank free from charge or lien; (b) in unencumbered securities of the Central Government or of any State Government; (c) in unencumbered securities mentioned in clauses (a) to (d) and (ee) of sec. 20 of the Indian Trust Act 1882 (2 of 1882) sub-rule (2) of Rule 3a provides: the amount deposited or invested as the case may be under sub-rule (1) shall not be utilised for any purpose other than for the repayment of deposits maturing during the bear referred to in that sub-rule provided that the amount remaining deposited or invested as the case may be shall not at any time fall below ten per cent of the amount of deposits maturing until the 31st day of March of that year. ( 8 ) HAVING referred to sec. 58a and the relevant rules we now turn to examine the first contention which has been raised by Mr. Nanavaty in the petitions in which he appears on behalf of the petitioners. Accor- ding to him sec. 58a is ultra vires Arts. 245 and 246 of the Constitu- tion because the subject-matter of sec. 58a squarely falls within the scope and ambit of Entry 30 in the State List. Entry 30 in the State List in the Seventh Schedule reads as follows: Money-lending and money-lenders; relief of agricultural indebtedness. The question which we are required to consider is whether acceptance of deposits by a com- pany from its members or the public constitutes money-lending and brings into existence money-lenders. On behalf of the Union of India it has been contended by Mr. Chandrashekhar that the subject-matter of sec. 58a squarely falls within the scope and ambit of Entries 43 and 44 in the Union List in the Seventh Schedule. Entry 43 reads as follows: Incorporation regulation and winding up of trading corporations including ban- king insurance and financial corporations but not including cooperative societies. Entry 44 reads as follows: in corporation regulation and winding up of corporations whether trading or not with objects not confined to one State but not including universities. It has been submitted by Mr. Chandrashekhar that sec. 58a applies to non-banking non-financial companies and that it does not regulate the deposits from a money-lender. According to him a depositor is not a money-lender. It regulates as submitted by Mr. Chandrashekhar finan- cial activities of a company. In our opinion acceptance of deposits by a company from its members or the public does not constitute money- lending on the part of the depositors though it may mean borrowing by the company. According to him a depositor is not a money-lender. It regulates as submitted by Mr. Chandrashekhar finan- cial activities of a company. In our opinion acceptance of deposits by a company from its members or the public does not constitute money- lending on the part of the depositors though it may mean borrowing by the company. Assuming however that the depositors are money- lenders their activities are not regulated in any manner whatsoever by sec. 58a. It subjects-the financial transactions of a company to social control. Therefore subject-matter of sec. 58a in so far as trading corpo- rations are concerned falls squarely within the expression regulation. . . . . of trading corporations within the meaning of Entry 43 in the Union List in the Seventh Schedule. In case of corporations which may be trading corporations or which may not be trading Corporations it falls squarely within the expression regulation. . . . . of corporations used in Entry 44 in the Union List in the Seventh Schedule indeed if its obje- cts are not confined to one State. ( 9 ) MR. H. M. Mehta has invited our attention to the decision of the Madras High Court in Mayavaram Financial Corporation Ltd. v. Reserve Bank of India 41 Company Cases 890. The question which arose in that case was whether the subject-matter of Non-Banking Financial Com- panies (Reserve Bank) Directions 1966 issued under secs. 45-J to 45-L of the Reserve Bank of India Act 1934 fell within the scope and ambit of Entries 38 and 36 in the Union List or entrenched upon Entry 30 in the State List. It was held in that case that the said directions fell within Entries 38 and 36 of the Union List and not within the scope and ambit of Entry 30 in the State List. It is not necessary to make any detailed reference to that decision because sec. 58a makes it abundantly clear that it does not seek to control the money-lender but seeks to control the borrower. It therefore cannot fall within the scope and ambit of sec. 30 in the State List. In our opinion it falls squarely within Entries 43 and 44 of the Union List and therefore it was within the legislative competence of Parliament to enact it. The first contention raised by Mr. It therefore cannot fall within the scope and ambit of sec. 30 in the State List. In our opinion it falls squarely within Entries 43 and 44 of the Union List and therefore it was within the legislative competence of Parliament to enact it. The first contention raised by Mr. Nanavaty in the petitions in which he appears therefore fails and is rejected. ( 10 ) THE second contention which has been raised on behalf of all the petitioners is that Rule 3a is ultra vires sec. 58a. The learned Advocate-General advanced this contention and divided it in two parts: (i) Application of Rule 3a in regard to deposits accepted after 1/04/1978 when the rule came into force and which would necessarily matured thereafter. (ii) Rule 3a in so far as it was made applicable to deposits which were accepted prior to 1/04/1978 by a company but which would mature after 1/04/1978. ( 11 ) LET us now examine the first part of the contention which has been raised by the learned Advocate-General. Sec. 58a enables the Cen- tral Government to prescribe three matters indeed in consultation with the Reserve Bank of India: (i) the limits upto which the deposits may be invited or accepted by a company either from the public or from its members; (ii) the manner in which the deposits may be invited or accepted by a company; and (iii) the conditions subject to which the deposits may be invited or accepted by a company either from the public or from its members. No dispute has been raised before us in relation to the limit or the ma- nner. The controversy which has been seriously raised before us relates to the amplitude of the expression conditions subject to which deposits may be invited or accepted by a company either from the public or from its members. The learned Advocate-General has argued that if we con- jointly read these three factors then it becomes quite clear that the limit which the Central Government may prescribe for a company has relation to the deposits themselves. Similarly the manner which the Central Gove- rnment may prescribe for a company to invite or accept deposits necessarily has reference to the deposits. According to him therefore the condi- tions subject to which deposits may be invited or accepted by a company must necessarily have relation to deposits and nothing else. Similarly the manner which the Central Gove- rnment may prescribe for a company to invite or accept deposits necessarily has reference to the deposits. According to him therefore the condi- tions subject to which deposits may be invited or accepted by a company must necessarily have relation to deposits and nothing else. In other words according to the learned Advocate-General the conditions contemplated by sec. 58a are as between a company and its depositors and no condi- tions as between a company and the Central Government. ( 12 ) THE next argument which he has raised is that a condition which can be prescribed under sec. 58a read with sec. 642 must be a condi- tion which must be operative in presentii and not a condition which will be operative in futuro. He has also tried to fortify the argument which he has raised by stating that conditions contemplated by sec. 58a (1) are the conditions of acceptance or invitation and nothing else. He has invited our attention in that behalf to a few decisions to which we are shortly referring. On behalf of the learned Attorney-General it has been argued by Mr. Chandrashekhar that there is no justification for confining the width and amplitude of the expression conditions to a narrow area as has been argued by the learned Advocate-General. According to him expression conditions should receive an extensive connotation because sec. 58a enacted by Parliament is a social control measure intended to protect the depositors against the risk which is attendant upon the depo- sits which they make with a company. In case a company fails to discha- rge its obligations and is driven to winding up proceedings there must be some kind of protection for small depositors. According to Mr. Chandra- shekhar what has been done by the Central Government by making Rule 3 is to provide a cover of protection for small depositors who deposit their moneys for a short-term-extending from six months to thirty-six months. They do so in order to earn sumptuous interest. A company pays it in order that it is able to receive short-term finance for being ploughed into the business and for discharging its immediate obligations. ( 13 ) WE see no reason why the expression conditions subject to which should be narrowly construed so as to have reference only to deposits alone. A company pays it in order that it is able to receive short-term finance for being ploughed into the business and for discharging its immediate obligations. ( 13 ) WE see no reason why the expression conditions subject to which should be narrowly construed so as to have reference only to deposits alone. In a social control measure it is necessary to discover its object and to so construe it that it serves its purpose if it is otherwise lawful and valid. It is difficult to uphold the argument advanced by the learned Advocate-General that the condition contemplated by rule 3-A is not a condition connected with the deposits. Though it may ex facie appear that it has nothing to do with deposits which a company accepts on a closer scrutiny we find that it has a very deep connection with those de- posits. There is no doubt about the fact that any condition prescribed un- der sec. 58a must he fair and reasonable condition. It should also be a relevant condition. Any statutory condition which plays a protective role for the depositors in relation to the deposits which they make with a company necessarily has deep connection with the deposits. It is not an ex- traneous condition at all nor it is an irrelevant condition. It is wrong to say that such a condition is not a condition imposed in presentii but that it is a condition imposed in futuro. It cannot be gainsaid that the expre- ssion conditions subject to which implies a condition precedent. Does rule 3a impose a condition precedent or a condition subsequent ? In our opinion imposition of a condition under Rule 3a is anterior to the acce- ptance of deposits but its implementation is posterior. Therefore when a company seeks permission of the Central Government to accept deposits from its members or from the public it is subjected in presentii to the condition contemplated by rule 3a. Acceptance of that condition by a Company is prior to its acceptance of the deposits. However compliance with that condition must in the very nature of things follow the accep- tance of deposits. Therefore condition which rule 3a contemplates is an anterior condition-a condition in presentii and a condition which has great relevance to the deposits which depositors make. Acceptance of that condition by a Company is prior to its acceptance of the deposits. However compliance with that condition must in the very nature of things follow the accep- tance of deposits. Therefore condition which rule 3a contemplates is an anterior condition-a condition in presentii and a condition which has great relevance to the deposits which depositors make. It is therefore difficult to uphold the narrow construction advanced by the learned Advocate General and to hold that rule 3a transgresses the ambit and scope of sec. 58a. ( 14 ) OUR attention has been invited by the learned Advocate General to the decision of the House of Lords in Chertsey Urban District Council v. Mixnams Properties Ltd. 1965 A. C. 735. The respondents who were the owners and occupiers of certain land which was used for caravan site for some years applied to the District Council under the Caravan Sites and Control of Development Act 1960 for a site licence as required under sec. 3 of the Act. The District Council issued the licence. However under sec. 5 (1) the District Council had the authority to subject the licensee of the site to conditions of tenancy. The District Council prescribed certain conditions which were challenged by the respondents in that case on the ground that they were ultra vires sec. 5 (1 ). It was contended on behalf of the respondents that conditions which sec. 5 (1) contemplated were limited to matters of town planning and public health. Upon construction of the expression conditions of tenancy used in sec. 5 (1) of the Cara- van Sites and Control of Development Act 1960 the learned Law Lords held that their was nothing in that Act suggesting any intention to authorise local authorities to go beyond laying down conditions relating to the use of the sites and that the general words of sec. 5 could not be construed as entitling them to do so. Expounding this subject further it has been laid down that permissible conditions must relate to the user of the licensed site and not to the user of the licensees legal powers of letting or licensing caravan sites Since the conditions complained of in that case went beyond the powers conferred by the Act upon the District Council they were held ultra vires and void. The conditions in dispute in that case stipulated that the site rents shall be agreed with the Council that security of tenure shall be granted to all caravan occupiers that site rules shall be restricted to items normally covered by a tenancy agreement and necessary for the good administration of the site that there shall be no restriction on caravan occupiers as to from whom they purchase the commodities which the require that no caravan occupier entering the site shall be charged any premium and that no restriction shall be imposed on caravan occupiers. These conditions related to the transactions between licensee of the site and the caravan occupiers They had nothing to do with anything between the District Council and the site licensee. While construing the expression conditions of tenancy used in sec. 5 (1) what has been observed in that decision is as follows: whether general words in an Act should be given a limited meaning is a question which frequently arises but so much depends on the particular circumstances that general statements of the law in other cases can be no more than guides. This observation made in that decision has some significance for the present case. Reference therein has been made to the decision of the Court of Appeal in Pyx Granite Co. Ltd. v. Ministry of Housing and Local Government (1958) 1 All E. R. 625 in which Lord Denning has observed that the expression such conditions as they think fit means valid condi- tions fairly and reasonably related to the permitted development. That statement of law was approved by the House of Lords in Fawcett Pro- perties Ltd. v. Buckingham County Council 1961 A. C. 636. ( 15 ) WE now turn to the decision of House of Lords in Fawcett Properties Ltd. v. Buckingham County Council 1961 A. C. 636. The subject- matter of that decision was town and country planning. In that case the question which arose E as whether a local planning authority which was empowered to develop land subject to such conditions as they think fit could impose any condition it thought fit. Construing that expression the House of Lords has laid down that it does not give the local planning authority an uncontrolled power to impose whatever conditions it likes. Construing that expression the House of Lords has laid down that it does not give the local planning authority an uncontrolled power to impose whatever conditions it likes. In exercising their discretion it has been further observed they must have regard to all relevant considerations and disregard all improper conditions and they must produce a result which does not offend against commonsense. In other words the conditions to be valid must fairly and reasonably relate to the permitted development and a public authority which is entrusted with that discretion must act reasonably. ( 16 ) THE next decision to which our attention has been invited is in The Queen v. Mayor and Co. of Plymouth (1896) 1 Q. B. 158. It was a case under the Sea Fisheries Regulation Act 1888 Under sec. 6 (1) of that Act the committee could appoint such fishery officers as they deemed fit subject to any restrictions or conditions as to expenditure made by the council or council by whom a local fisheries committee is appointed. It was held in that decision that the restrictions and conditions as to expenditure in connection with the appointment of a particular officer could not be made after the officer had been appointed. ( 17 ) THE last decision to which our attention has been invited by the learned Advocate-General is in The Director Enforcement Directorate Cabinet Secretariat Deptt. Personnel and A. R. Government of India and Others v. Saroj Kumar Bhotika and Another AIR 1978 Cal. 65 . It was a case under Foreign Exchange Regulation Act. The question which arose was whether the Reserve Bank of India which allowing the sale of sha- res of a foreign concern could impose the condition that shares could not be allotted to a larger industrial house and persons connected therewith. Such a condition was infact imposed. It was held that that condition was liable to be struck down because i. had no rational or proximate nexus with the object of Foreign Exchange Regulation Act. Since it was not the object of the Foreign Exchange Regulation Act to prevent concentra- tion of economic power a condition imposed to achieve that object was not a valid condition. This decision has little application to the facts of the present case. Since it was not the object of the Foreign Exchange Regulation Act to prevent concentra- tion of economic power a condition imposed to achieve that object was not a valid condition. This decision has little application to the facts of the present case. ( 18 ) WE are unable to come to the conclusion that a condition which rule 3a prescribes is de hors the subject-matter of sec. 58a. We are also unable to come to the conclusion that it is not a fair and reasona- ble condition related to the deposits which a company accepts from a depositor. It is a fair and relevant condition which relates to deposits. In our opinion therefore rule 3a is not ultra vires sec. 58a and is therefore valid in so far as it is applicable to deposits which a company received or may receive after 1/04/1978 and which therefore necessarily mature thereafter. ( 19 ) SO far as its applicability to deposits which a company received prior to 1/04/1978 and which would mature thereafter is concerned the question now is to all effects and purposes academic. A company can receive deposits for a period commencing from six months to thirty- six months. Since 1st April 1978 thirty-two months have already passed. Therefore deposits which the petitioners received prior to 1st April for a period of thirty-two months or less have all matured and must have been repaid. For all purposes therefore its applicability is left only to depo- sits which the petitioners received prior to 1/04/1978 for a period exceeding 33 months the maximum being 36 months. We therefore asked Mr. Chandrashekhar whether any purpose would be served by our expressing our opinion on this question. Mr. Chandrashekhar told us that the Central Government shall not apply rule 3a to the petitioners in so far as the deposits which they accepted prior to 1/04/1978 and which matured or would mature after 1/04/1978 are concerned. Therefore in view of the statement which Mr. Chandrashakher has made on behalf of the Central Government it is not necessary to express any opinion on this question because the petitioners grievance in that behalf does not survive. ( 20 ) THE last contention which the learned Advocate-General has raised is that rule 3a is ultra vires Art. 14 of the Constitution. Chandrashakher has made on behalf of the Central Government it is not necessary to express any opinion on this question because the petitioners grievance in that behalf does not survive. ( 20 ) THE last contention which the learned Advocate-General has raised is that rule 3a is ultra vires Art. 14 of the Constitution. According to him rule 3a imposes an arbitrary condition or a condition which is extraneous to the subject-matter of acceptance of deposits by a company We are unable to uphold this argument raised by the learned Advocate- General. In our opinion acceptance of deposits by a company from the members of the public or from its members necessarily implies irs repay- ability to the depositors. What rule 3a provides is a cover of protec- tion indeed in a small measure - which will ensure the repayability of his deposit to a depositor. Ten per cent of the deposits which a comp- any is required to deposit in any one of the three modes specified in rule 3 is a recurring phenomenon. A company accepts deposits from its members or from the public and deposits ten per cent thereof say in a Scheduled Bank. It draws upon that amount when the deposits which it has accepted from its depositors become mature for repayment and pays them. In the meanwhile it may accept deposits from some other deposi- tors and will deposit ten per cent out of them say in a Scheduled Bank. Therefore it is a continuous flow of ten per cent of the deposits which a company may accept. It goes on drawing upon them for repaying its depositors and it goes on supplementing them by a fresh ten per cent of the deposits which it may again receive from its depositors. We find that the object of rule 3a is to protect the depositors of a company. It cannot. therefore be said that it is arbitrary and extraneous to the subject- matter of 6 acceptance of deposits by a company. It is quite rational and apposite. In our opinion therefore it is not ultra vires Art. 14. . ( 21 ) BEFORE we close it is necessary to refer to the judgment of the Allahabad High Court in Civil Miscellaneous Writ No. 8427 of 1978 and group decided by a Division Bench of that Court on 9th July 1979. It is quite rational and apposite. In our opinion therefore it is not ultra vires Art. 14. . ( 21 ) BEFORE we close it is necessary to refer to the judgment of the Allahabad High Court in Civil Miscellaneous Writ No. 8427 of 1978 and group decided by a Division Bench of that Court on 9th July 1979. The question which has been raised before us was the question which was raised before that High Court. While construing sec. 58a it has been observed by the learned Judges that there is no warrant for a narrow interpretation of the expression conditions subject to which deposits may be invited or accepted. It has also been observed in that decision that that expression does not appear to be confined to matters between the depositor and the company. It has next been observed in that decision that even if rule 3a is construed as a direction for the utilization of the funds received by the company in the shape of deposits it would still be within the scope of sec. 58a of the Act. However that is not the argument which has been raised by Mr. Chandrashekhar before us. Furthers according to Allahabad High Court the principal object underlying rule 3 is to safeguard the interests of the company and the depositors. On behalf of the Central Government it was argued in that case that ten per cent of deposits which provide an adequate quantum of liquid founds which serve as a cushion to meet its commitments during any year by way of return of deposits as they mature during that year or in so far as repayability of the deposit maturing during that year is concerned. Allahabad High Court therefore has held that rule 3a is not a gratuitous interference with the rights of the companies. They were also justified under sec. 642 of the Companies Act. In that case challenge under Art. 14 Art. 19 (1) (g) and Art. 301 was raised. So far as challenge under Art. 14 in concerned Allahabad High Court has turned it down. So far as justifiability under rule 3a is concerned all that can be said is that it will be valid if it is made generally to carry out the purposes of this Act as provided in clause (b) of sub-sec. (1) of sec. 642. So far as challenge under Art. 14 in concerned Allahabad High Court has turned it down. So far as justifiability under rule 3a is concerned all that can be said is that it will be valid if it is made generally to carry out the purposes of this Act as provided in clause (b) of sub-sec. (1) of sec. 642. ( 22 ) THERE is no doubt about the fact that rule 3a has been made to carry out the purposes of sec. 58a. The purpose which it carries out is that it ensures the repayability of the deposits which a company accepts from the public or its members. ( 23 ) AN attempt was made by Mr. Chandrashekhar to show that under sub-sec. (3) of sec. 64z this rule was placed by the Central Government before the Parliament. It only means that the Parliament applied its mind to it and considered it. It does not therefore mean that it has attained the status of a Parliament any statute. It remains all the same delegated piece of legislation. Therefore even though it was considered by the Parliament if it exceeds the amplitude of sec. 58a it must be struck down. But that is not the situation in this case. We have already recorded the conclusion that the language used in sec. 58a is wide enough to justify the validity of rule 3a. ( 24 ) IN the result since all the contentions raised on behalf of the petitioners fail all the petitions fail and subject to the statement made by Mr. Chandrashekhar in relation to the deposits which the petitioners received prior to 1/04/1978 and which matured or would mature thereafter are dismissed. Rule in each of the petitions is discharged with no order as to costs. ( 25 ) MR. A. C. Gandhi who appears on behalf of the petitioners and Mr. S. I. Nanavaty who appears on behalf of the rest of the petitioners apply for a certificate of fitness under Art. 133 (1) of the Constitution be enable the petitioners to appeal against this decision to the Supreme Court. These cases raise for the first time the question of interpretation of sec. 58a (1 ). It is an all-India statute. We therefore think that it is necessary for the Supreme Court to pronounce a final decision on this question. These cases raise for the first time the question of interpretation of sec. 58a (1 ). It is an all-India statute. We therefore think that it is necessary for the Supreme Court to pronounce a final decision on this question. We therefore grant in each of these cases a certificate of fitness under Art. 133 (1) of the Constitution in order to enable the petitioners to appeal against this decision to the Supreme Court. .