JUDGMENT 1. We had earlier heard the arguments made by both the parties and the learned Advocate General wanted time, which was granted to him more than once to enable him to consult and advise the State Government. The learned Advocate General gave out that he does not want to make any more submissions that is. why the orders being dictated orally in the Court today. 2. In all these identical writ petitions a common question is involved and, therefore, they are being disposed of by a common order. 3. It will be proper to set up the issue which is involved in each of the writ petitions. The main dispute is about validity of the Recruitment and Service Conditions of the Managers of Agriculture Credit Cooperative Societies Rules, 1977 (for short 'the Rules'). It will be proper to give the history of the Rules before we set out the facts in one of the three cases and the source of the rule-making authority. Section 148 of the Cooperative Societies Act, 1965 (for short the Act') vests power in the State Government to frame rules for the whole or any part of the State and for any class of co-operative societies, after previous publication, and such rules can be framed to carry out the purposes of the Act. Whereas Sub-section(1) of Section 148 confers the general rule making power on the State Government, its sub-section 2 specifies the matters in which the rules can be framed. Clause (xxx) of Sub-section 2 of Section 148 provides that the State Government can also frame rules relating to the qualifications of a Manager, Secretary, Accountant or any other officer or an employee of the society and the conditions of their service including discipline and control. In exercise of the powers under Section 148 of the Act, the Cooperative Societies Rules, 1966 were framed (for short, 'the General Rules'). Under Section (sic Rule) 41 of the General Rules, the Registrar framed service rules for managers of the Agriculture Co-operative Credit Society, which were redesignated as Service Rules for Manager of Agriculture Cooperative Credit Society, 1966(for short, the Original Rules'). In Hindi the rules were known as d`f"k _.knk=h lgdkjh lfefr;ksa ds O;oLFkkidksa ds lsok fu;e] 1966 1966 The original rules die not provide any separate fund for payment of salaries to the Managers. In Hindi the rules were known as d`f"k _.knk=h lgdkjh lfefr;ksa ds O;oLFkkidksa ds lsok fu;e] 1966 1966 The original rules die not provide any separate fund for payment of salaries to the Managers. The original rules were repealed by d`f"k _.knk=h lgdkjh lfefr;ksa ds O;oLFkkidksa ds lsok fu;e] 1966 1969 (for short 'the 1969 Rules'). Neither in the original Rules nor in the Rules of 1969 there was any provision for a common cadre for the whole of State and there was also no provision of any cadre authority. The appointments to the various posts in the Primary Agriculture Credit Cooperative Societies (for short 'PACS') were made under the 1969 Rules by a selection committee constituted under Rule 5 of these Rules. The committee so constituted consisted of the Chairman of the Central Cooperative Bank as the Chairman, the Chairman of the District Cooperative Bank as Member. The Assistant Registrar as Member and the Executive Officer was to be the Member Secretary of the Selection Committee. As provided by Rule 6 of the 1969 Rules, the appointment orders were to be issued by the Executive Officer of the Central Cooperative Bank in accordance with the merit list. There was a provision of probation period, confirmation etc. 4. It may be stated that there is a three-tyre (sic tier) structure for advancing loans in the PACS. They federate into Central Cooperative Societies in each of the districts and each of the District Central Cooperative Society then federate into the Rajasthan State Cooperative Bank Ltd. 5. It will appear from the perusal of the Rules of 1969 that the selection and appointment of Managers was to be made in each district by the Executive Officer of the Central Cooperative Bank of the district. Under Rule 10 of the Rules of 1969 ordinarily a Manager was not to be transferred from one PACS to another PACS and the transfer could be made in special circumstances by the Executive Officer of the Central Cooperative Bank of the distract after the permission for transfer was recorded by the Chairman of the Bank. So far as the payment of salary to the aforesaid manager of the PACS is concerned the Registrar in exercise of Rule 41 of the Rules constituted a separate fund for payment of salary etc. and the fund was designated as "Manager's Salary Fund for Managers under Central Cooperative Bank Rules, 1969". So far as the payment of salary to the aforesaid manager of the PACS is concerned the Registrar in exercise of Rule 41 of the Rules constituted a separate fund for payment of salary etc. and the fund was designated as "Manager's Salary Fund for Managers under Central Cooperative Bank Rules, 1969". 6. Again the Registrar in exercise of its powers under Rule 41 of the General Rules framed the Rules which as said earlier are known as the Rules. Sub-rule 2 of Rule 2 of the Rules defines Bank as "District Central Cooperative Bank under whose jurisdiction Agriculture Cooperative society of the District functions". Rule 2(3) defines society as PACS by whatever name it is registered. Sub-rule 4 of Rule 2 defines "Cadre Authority" which is Rajasthan Credit Institutions Cadre Authority Ltd., Jaipur. Sub-rule 5 of Rule 2 defines Secretary, Cadre Authority as Chief Executive of the Rajasthan Credit Institutions Cadre Authority Ltd., Jaipur. Sub-rule 6 of Rule 2 defines "General Manager" as a General Manager of the Central Cooperative Bank. Sub-rule 8 of Rule 2 defines "Manager" as one appointed by the Cadre Authority under these rules in an Agriculture Cooperative Credit Society and would be an employee of the Rajasthan Credit Institutions Cadre Authority Ltd., Jaipur and would work as the Chief Executive in the Society. Rule 3 of the said Rules provides for two time scales for the Managers. Rule 5 provides for payment of salaries to the Managers of the PACS and it has been provided therein that the salaries to the Managers would be paid from the Managers Fund established at the level of the Cadre Authority through the Central Co-operative Banks. The Accounts of the Managers Salary Fund in the Central Cooperative Bank will be operated by the General Manager of the Central Cooperative Bank Ltd. Rule 6 of the said Rules provides for payment of salaries to the Managers from the said Managers Fund. Vide clause (1) of this rule it has been provided that 3/4th of the margin of interest received by the society on short term and medium term loans disbursed to members will be deposited by the society in the account of the Cadre Authority in the name of Managers Salary Fund Account required to be maintained in the District Central Cooperative Banks. The concerned Central Cooperative Bank will have powers to deduct one percent from the loan amount at the time of giving the loan to the society for being deposited in the Managers Salary Fund. 7. It is case of the petitioners that there is a great difference between the mode of payment and use of fund for payment of salary to the Managers in the 1969 Rules which were repealed the Rules. So far as 1%9 Rules are concerned in the Managers Salary Fund which was created vide Rule 4 of those Rules, the mode of realisation of the fund as provided vide Rule 5 and the duty of the Managers in respect of this fund and its powers to spend from this fund was provided vide Rule 6. Rule 9 of the said Rules provides that the fund would only be utilised for payment of salary and Dearness Allowance to the Managers. The essential and the main feature of this scheme under the aforesaid salary fund Rules was that 3/4 of the difference of interest margin received by the society during the year on the short term and medium term loans obtained from the Bank and disbursed to its members shall be deposited in the Manager Salary Fund by the society but the amount so deposited by the society will not be in excess of the amount payable to the Manager from out of the Manager Salary Fund. There is a note appended after clause (a) of rule 4 of the said Rules that the society will deposit Rs. 1.50 out of the two percent margin of the interest earned by it from its members in the Managers Salary Fund. In other words the case of the petitioners is that under the Rules of 1%9 the scheme was that the society concerned was to make only contribution regarding salary and the D.A. payable to the Managers appointed in the society and not more than that and the PACS were to receive interest on the excess amount if any deposited in the aforesaid fund. But the aforesaid essential main features of the scheme in the Rules of 1%9 changed completely in the Rules. But the aforesaid essential main features of the scheme in the Rules of 1%9 changed completely in the Rules. The main difference in the scheme under the Rules of 1%9 as well as in the Rules according to the petitioners is that under the New Scheme the society is obliged to make contribution to the extent of 3/4th of the margin of interest money earned by it in the course of its transactions in obtaining short term and medium term loans from the Rajasthan State Cooperative Bank Ltd. and disbursing the same to its members, even when the actual payment required to be made to the Manager appointed under the Rules in the society is far less as compared to the contribution made by the society. The other differences have also been done in the two schemes under Rules of 1%9 as well as in the Rules. 8. Under the Rules the Rajasthan Credit Cooperative Institutions Cadre Authority Ltd. (for short 'the Cadre Authority') has been created. The object of the Cadre Authority is to create a common cadre of Managers for all the Primary Agriculture Co-operative Credit Societies(PACS) in the State. Under the provisions of the said Cadre Authority the Managers are no longer employees of the concerned co-operative Societies in which they have been appointed but be- come employees of the Cadre Authority subject to its discipline and control. It is the case of the petitioners that the registration of this Cadre Authority is absolutely illegal because Section 4 of the Act clearly provides the societies which may be registered and classified under the Act. The said Section permits registration of such societies only which has as its objects the promotion of economic interest of its members in accordance with the cooperative principles of a cooperative society established with the object of facilitating the operation of such a society. According to the petitioners the Cadre Authority is not a society having any object contained in Section 4 clause (a) to (i) and, therefore, could not have been registered. The object of the Cadre Authority is quite foreign to the objects mentioned in Section 4 and the Authority has been illegally registered. The common eadre of Managers visualised by the Cadre Authority is absolutely illegal and ultravires to the Act and the Rules. 9. The object of the Cadre Authority is quite foreign to the objects mentioned in Section 4 and the Authority has been illegally registered. The common eadre of Managers visualised by the Cadre Authority is absolutely illegal and ultravires to the Act and the Rules. 9. The question, therefore is as to whether Cadre Authority could be registered as Society and whether there could be a common cadre ; or in other worms a centralised services could have been provided under the Cadre Authority. It may be stated that the similar question had arisen in the case of Phool Chand v. State of Rajasthan and others, reported in 1985 RLR 365 , wherein a Division Bench of this court has held that the Rules are valid. It will appear from the perusal of the aforsaid case that the challenge to the Rules was that they were ultravires of clause (xxx) of Sub-section 2 of Section 148 of the Act, but it does not appear from its perusal that there was any challenge to the Rules on the ground that there could not be a centralised service or a common cadre for all the Managers in the PACS aroughout the State of Rajasthan. it will appear from the aforesaid case of Phool 1 reported in 1985 RLR 365 Chand that the power of the Registrar to frame Rules under Sub-rule 1 of Rule 41 of the General Rules was challenged. It was contended that under Section 148 only State Govt. was empowered to frame the rules and the power could not be further delegated to the Registrar by the State Govt. The learned Judges said that under Sub-sec.(2) of Section 147 of the Act, the Govt. was empowered by notification in the official gazette to delegate all or any of the powers exercised by it under the Act or the Rules and on delegation the powers may be exercised by the Registrar and in view of the learned Judges, therefore, the Govt. could have delegated its powers to the Registrar and the Registrar in turn could have framed the Rules in exercise of the powers conferred on him under Rule 41 of the General Rules. could have delegated its powers to the Registrar and the Registrar in turn could have framed the Rules in exercise of the powers conferred on him under Rule 41 of the General Rules. It can, therefore, be said from the perusal of the aforesaid file that there was no challenge to the Rules on the ground that the Cadre Authority could not be a society which could be registered under Section 4 of the Act because its object was not one of the objects specified therein. It will also appear that in the aforesaid case the challenge was not on the ground that each cooperative society, PACS in this case, being an autonomous body there could be no centralised services or a common cadre and providing of a common cadre was in colourable exercise of the powers of the Registrar. Before us the challenge is on the ground that providing common cadre of Managers in PACS is against provisions and objects of the Act and the General Rules and no authority was vested in the Registrar to pro- vide central service or a common cadre. There is no dispute that in the rules a common cadre of Managers in PACS has been provided. There is also no dispute that the discipline and control so far as the Managers in the PACS in the various PACS in Rajasthan is concerned has been vested in the Cadre Authority. The question is as to whether is it permissible under law ? Whether the rules are a valid piece of legislation ? Under Sub-section (1) of Section 4 of the Act only such a cooperative society which has as its objects the promotion of the economic interests of its members in accordance with the cooperative principles, or a cooperative society established with the object of facilitating the operation of such society, may be registered. Sub-section 2 of Section 4 vests powers in the Registrar to classify societies of the nature specified in Sub-section (1) with reference to its objects, area of operation, membership or any other prescribed matter, into such classes or sub-classes as may be prescribed, sub-section (4) of Section 4 provide that a list of all societies so classified shall be published by the Registrar from time to time, in the prescribed manner. Under Rule 9 of the General Rules, classification and sub-classification of the societies has been made and they are ;(1) Agricultural Marketing Society (2) Consumer Society (3) Cooperative Bank;(a) (Apex Bank) Society (b) Central Bank (c) Other Banks (4) Farming Society; (a) Collective Farming Society (b) Joint Farming Society (5) Housing Society; (a) Tenant Ownership Housing Society (b) Tenant Co- partnership Housing Society (c) Other Housing Societies (6) Processing Society; (a) Agriculture Processing Society (b) Industrial Processing Society, (7) Producers';(a) Industrial Producers' Society (b) Labourers' Industrial Society (c) Agricultural Producers' Society, (8) Resource Society; (a) Urban Credit Resource Society (b) Non-Credit Resource Society (c)Service Co-operative Society (9) General Society; (a) Social (b) Commercial and (c) Others. 10. It will appear that the various societies have been classified as above. A look at the certificate of registration of the Cadre Authority will show that the certificate was issued by the Registrar on 11th October, 1976 which reads as under: "COOPERATIVE DEPARTMENT RAJASTHAN CERTIFICATE OF REGISTRATION" Certified that the application made by the Rajasthan State Cooperative Bank Ltd., Jaipur and various Central Cooperative Banks under section 6 of the Rajas- than Cooperative Societies Act, 1965 (Act No. 13 of 1965) for the Registration of a Co- operative Society under the name of Rajasthan Cooperative Credit Institutions Cadre Authority Ltd. Post Office, Jaipur, Distt. Jaipur, has been accepted and the society is hereby registered at No. 3010L on the 11th day of October, 1976 Under section 8 of the said Act subject to the conditions stated in the said application and the provisions of the said Act and Rules made there- under and the bye-laws of the society. The registration certificate is issued under my seal and signature on this 11th day of October, 1976. Sd- Jugal Kishore Sharma It. Registrar (BKg.) Sahkari Samiti, Rajasthan Jaipur." 11. If we look at the bye-laws of the Cadre Authority it will appear that its objects are enumerated in clause (6) and its objects are (a) to create, maintain and supervise the cadre of key personnel of Banks like General Manager/Managers/Executive Officer/Asstt. Sd- Jugal Kishore Sharma It. Registrar (BKg.) Sahkari Samiti, Rajasthan Jaipur." 11. If we look at the bye-laws of the Cadre Authority it will appear that its objects are enumerated in clause (6) and its objects are (a) to create, maintain and supervise the cadre of key personnel of Banks like General Manager/Managers/Executive Officer/Asstt. Executive Officer/Branch Manager/Accountants/Loan Supervisors or such officers as may be included by the Registrar from time to time, (b) To raise funds for meeting the object of the society, (c) To regulate service conditions of cadres of key personnel of Banks as per rules approved by the Registrar concerning recruitment promotion, transfer, punishment, dismissal and termination of services, provident fund and gratuity ect.,(d) To prescribe, with the prior approval of the Registrar the rate of contribution to be made by the Banks to each such funds created for respective cadres and to maintain and operate such special funds as per conditions prescribed by the Registrar, (e) To make training arrangements for the various cadres controlled by the society, and (f) To undertake such other activities as may be conducive to the attaining of the above objectives. Clause(9) of the bye-laws deals with 'Membership' and under it the Membership of the society contains; A-Class Members-The Rajasthan State Co-operative Banks Ltd., Jaipur, B-Class Members- The Central Cooperative Banks in the State and C- Class Members-The Government of Rajasthan. It will, there fore, be clear from the reading of clause 9 of the bye-laws of the Cadre Authority that PACS are not the members of the society. An identical issue had arisen before the Apex Court in the case of A. P. Co-op Bank v. C. P. Co-op. L. M. Bank, AIR 1974 S.C. 1692 . The impugned rules in the aforesaid case was Rule 17. The said rule was framed in exercise of the powers conferred under sub-section (1) of Section 13 read with Section 115 of the Andhra Pradesh Cooperative Societies Act, 1964. L. M. Bank, AIR 1974 S.C. 1692 . The impugned rules in the aforesaid case was Rule 17. The said rule was framed in exercise of the powers conferred under sub-section (1) of Section 13 read with Section 115 of the Andhra Pradesh Cooperative Societies Act, 1964. Section 115 of the Andhra Pradesh Cooperative Societies Act provided that the subject to the provisions of the Act, the Board shall have such powers over Mortgage Banks including power of appointment, transfer and disciplinary action in respect of the employees of the Mortgage Bank as may be prescribed and with the previous approval of the Registrar make such regulations as may be necessary for carrying out or any of the purposes of the Chapter. 2 AIR 1974 S.C.1692 Section 130(1) provided that the Government may by notification published in the Andhra Pradesh gazette make rules. for carrying out all or any of the purposes of the Act, for the whole or any part of the State and for any class of societies. Rule 70(1) and para 13 and 14 of the judgment reads as under : "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 appointment to the posts brought under centralised service and the Mortgage Banks shall have no power to make appointments to such posts." "(13) The Board shall have power to call upon the mortgage banks to contribute to the cost of service rendered by the Central Mortgage Bank by providing the services of members of the centralised service to work in the mortgage banks and the mortgage bank shall pay the cost at the rates prescribed from time to time by the Board. If any mortgage Bank fails to pay such contribution within the time fixed, the Registrar may, on the application of Central Mortgage Bank and after such enquiry as he may consider necessary make an order requiring the mortgage bank to pay the amount, and every such order shall be enforceable against the mortgage bank under Section 63(2) of the Act as if it was an award. (14) On constitution of centralised service all rights and privileges accrued and liabilities incurred by the employees in relation to his service in the mortgage bank shall stand vested with the Board." 12. The court said that the rule making power conferred on the Government for carrying out all or any of the purposes must be confined to the purposes as are enumerated or indicated in the preamble or in any of the provisions of the Act. The court further said that the only provision to which reference has been made specifically as empowering the Board of Directors of the Central Land Mortgage Bank to constitute a centralised service under Section 115 of the Act. But in view of the Court a careful reading of Section 115 however does not justify the the contention that the Central Mortgage Bank either has power to create a centralised cadre of service from amongst the employees of Mortgage Banks which are members of Central Mortgage Bank. That section merely confers powers of supervision on the Board of the Central Mortgage Bank over the mortgage banks which power includes the power of appointment, transfer and disciplinary action in respect of the employees of the mortgage banks. The court said:- "This power, therefore can in no circumstances be construed as empowering the Board of Directors of the Central Mortgage Bank to recruit employees for the mortgage banks or to make appointments to a common cadre created by it from out of the employees of the member mortgage banks. If the employees are appointed by the Central Mortgage Bank, their salaries and other emoluments should be paid by it." 13. The Court, therefore, agreed with the High Court that a centralised service or any cadre of employees of the mortgage banks cannot be created under Section 115 of the Act and further said that Rule 70 cannot vest such power in the Rules and therefore, Rule 70 is ultravires of the rules-making power of the State under Sub-sec.(1) of Section 130 of the Act. We have already referred to Section 4 of the Act and to the Bye-Laws of the Cadre Authority and we have no doubt that looking to the object of the Cadre Authority which have been dealt with in the earlier part of the order the Cadre Authority could not have been registered under Section 4 of the Act as a Cooperative Society. Such a Cooperative Society, in our opinion, cannot be registered under Section 4 of the Act whose objects are simply to create maintain and supervise the cadre of key personnel of banks like PACS etc. We have already said earlier that PACS are not even the members of the Cadre Authority under clause 9(10) and the Scheme of the Act will show that every society which is registered is a body cooperated by name and which is registered having perpetual and common seal and has powers to institute and defend suits and other legal proceedings for the purposes for which it was constituted. Under Section 29 of the Act the Final Authority, subject to the provisions of the Act and the Rules, vest in the general body of the members of the cooperative society. 14. We are, therefore, of the opinion that so far as the rules of the Cadre Authority are concerned it could be registered as a Co-operative Society under Section 4 of the Act and the Recruitment and Service Conditions of the Managers of Agriculture Cooperative Societies Rules, 1977 which have been framed by the Registrar in exercise of the powers under Section 148 of the Act and Rule 41 of the Cooperative Societies Rules, 1966 are beyond the powers of the rule making powers of the Registrar because under the scheme of the Act of the General Rules no centralised service or the common cadre could have been provided. 15. Consequently we hereby allow writ petitions and hold that the aforesaid rules are ultravires of the provisions of the Act and the General Rules. The Registration of the Cadre Authority as a cooperative society is also against the provisions of Section 4 of the Act. There can be no centralised service or a common cadre for the Managers etc., of the Primary Agriculture Cooperative Societies, i.e. PACS. Costs made easy.Petition allowed. *******