ORDER : 1. Section 128A of the Karnataka Co-operative Societies Act, 1959 (for short ‘Act of 1959’) has a weird history to tell. It successfully withstood the challenge to its constitutional validity in 1986. However, the said provision is omitted vide Ordinance No. 8 of 2009. On 29.03.2010, provision (re-numbered as 128-A) makes a comeback. And on 01.07.2020, said provision is once again omitted. On 27.07.2023, Section 128-A again finds its place in the Act of 1959, vide Act No. 27/2023. 2. But for a hyphen between ‘128’ and ‘A’, the provision is a replica of Section 128A, which has been declared ‘intra vires’ in PCLD Bank Vs. State of Karnataka, ILR 1986 Karnataka 427. However, in this batch of petitions, the provision once again faces the challenge to its constitutional validity. 3. Some of the petitioners are the Primary Co-operative Societies registered under the Act of 1959, others are the members or office bearers of the Primary co-operative societies. 4. Quite obviously, the State and the interveners (Federal Societies) have raised the following preliminary objections to the maintainability of the Writ Petitions. (a) The identical provision (Section 128-A) as it stood in 1986, is held to be constitutional by the Division Bench in PCLD Bank, supra. Thus, the principle of res judicata applies, as such the Writ Petitions are not maintainable. (b) The Writ Petitions are premature; there is no cause of action as the Registrar of co-operative societies (‘Registrar’ for short) has not implemented the Regulations under Section 128-A of the Act of 1959. The right to challenge will accrue only in case, the Regulations violate the fundamental rights of the members of the Society. 5. Section 128-A of the Act of 1959 was introduced by way of amendment vide Act No. 27/2023. The amended provision reads as under: “128-A. Constitution of a common cadre: 1. The right to challenge will accrue only in case, the Regulations violate the fundamental rights of the members of the Society. 5. Section 128-A of the Act of 1959 was introduced by way of amendment vide Act No. 27/2023. The amended provision reads as under: “128-A. Constitution of a common cadre: 1. Notwithstanding anything contained in this Act, the rules or the bye-laws, where the Registrar, in the interest of the co-operative movement, considers that the creation of a common cadre of employees for any class of co- operative societies is necessary, he shall authorize one or more federal societies to which such class of co-operative societies is affiliated to exercise the power of appointment, transfer and disciplinary action in respect of such categories of employees of that class of co-operative societies as may be specified by him and make such regulations as may be necessary for carrying out the said purpose. Where such federal society is so authorised by the Registrar, the affiliated co- operative societies shall not have powers to deal with such categories of employees except to the extent the regulations may permit. 2. The Registrar shall have the power to require the affiliated co-operative societies to make contribution of such sum every year towards expenditure, as the federal society is likely to incur or has incurred for the purpose. If any co- operative society fails to pay the said sum to such authority as may be specified by the Registrar and within the time fixed by him, the Registrar may on the application of the authority, and after such enquiry as he may consider necessary, make an order requiring the co-operative society to pay the amount, and every such order shall be enforceable against the co-operative society as if it were an award under Section 71.” 6. The 97th amendment to the Constitution of India, came into effect on 15.02.2012. The relevant amendments for the discussion in these petitions are the amendment to Article 19(1)(c) and the introduction of Article 43-B. 7. On the plea of res judicata. The plea of res judicata is not available. It is indeed true that the constitutional validity of Section 128-A was upheld by the Division Bench of this Court, in 1986, in PCLD Bank supra. Said provision was omitted later, and re-introduced in 2023. On the plea of res judicata. The plea of res judicata is not available. It is indeed true that the constitutional validity of Section 128-A was upheld by the Division Bench of this Court, in 1986, in PCLD Bank supra. Said provision was omitted later, and re-introduced in 2023. However, significant developments have taken place since the validity of the said provision was upheld in 1986. 8. The 97th amendment to the Constitution of India, amended Article 19(1)(c) of the Constitution of India in 2012. The expression “co-operative societies” was introduced in Article 19(1)(c). And a whole new Article 43-B is also introduced. The Act of 1959 is amended. But for these amendments, the challenge to the constitutional validity of Section 128-A would have been hit by the principle of res judicata. However, post the judgment in PCLD Bank supra, the right to form a co-operative society is a ‘fundamental right’. Further, there is also a constitutional mandate on the State in the form of Directive Principle in Article 43-B of the Constitution of India, to promote voluntary formation, autonomous functioning, and democratic control in Co-operative Sector. In addition, the Act of 1959 itself is amended incorporating the constitutional aspirations envisaged in Article 43-B of the Constitution of India. 9. The premise on which the challenge is leveled has undergone a huge change, since the judgment in PCLD Bank supra in 1986 because of the 97th amendment to the Constitution of India which came into effect in 2012. The second challenge is a post-97th amendment to the Constitution of India. Thus, the second challenge is on a new legal ground which was not legally available at the time of the first challenge. For this reason, even the plea of constructive res judicata is not available. These subsequent changes in the regime of law will obliterate the technical plea of res judicata. Thus, the petitions merit consideration on merits. 10. On the plea that the Writ Petitions are premature for want of cause of action: (a) Section 128-A of the Act of 1959 enables the Registrar to frame Regulations in respect of three matters namely, recruitment, transfer, and disciplinary action concerning the employees of co-operative societies. The Registrar may confer the power on these three matters on a Federal Society to which such co-operative societies are affiliated. The Registrar may confer the power on these three matters on a Federal Society to which such co-operative societies are affiliated. Before the introduction of Section 128-A of the Act of 1959, the power to recruit, transfer, and hold disciplinary action is with co-operative societies. Section 128-A which confers the power on the Registrar to frame Regulations on certain matters which are within the powers of the Primary co-operative societies, has immense potential to take away those rights hitherto exercised by the petitioners. Thus, there is a cause of action to the petitioners to file a Writ Petition. Indeed, the Regulations under the impugned provision have not yet been brought into action. However, the State admits that the Regulations are framed, and but for the interim stay order, the Regulations would have come into force. This being the position, the contention that the Writ Petitions are premature holds no water. (b) More than anything else, when the challenge stems from the premise that the State has no power to authorise the Registrar to confer such power on federal Society, the petitioners need not wait for the Regulations to be framed under the impugned provision. Thus, there is cause of action and Writ Petitions are not pre-mature. (c) The reliance placed by the respondents on the judgment of the Hon’ble Apex Court in Kusum Ignots and Alloys Ltd. vs. Union of India, (2004) 6 SCC 254 is not of much avail to the respondents as the Constitution Bench of the Hon’ble Apex Court in earlier judgment in K.K. Kochunni vs. State of Madras, AIR 1959 SC 725 is not brought to the notice in Kusum Ignots supra. In K.K. Kochunni supra, the Hon'ble Apex Court has held that the Writ Petition challenging the constitutional validity of a provision is maintainable, even before overt action is taken pursuant to the provision under challenge. Therefore, this Court is of the view that the petitions are not premature and there is a cause of action as the petitioners contend that the provision conferring the power on certain matters specified in Section128-A of the Act of 1959 on the Registrar itself is unconstitutional. 11. On the challenge to the constitutional validity: Now the question is whether Section 128-A of Act of 1959 violates the rights guaranteed under Article 19(1)(c) of Constitution of India? 12. 11. On the challenge to the constitutional validity: Now the question is whether Section 128-A of Act of 1959 violates the rights guaranteed under Article 19(1)(c) of Constitution of India? 12. The learned counsel for the petitioners urged that: (i) Article 19(1)(c) is amended pursuant to the 97th amendment to the Constitution of India. In addition to making the right to form a co-operative society, a fundamental right by inserting the expression “co-operative societies” in Article 19(1)(c), a new Article 43-B is also introduced. The said Article enjoins the State to endeavor to promote voluntary formation, autonomous functioning, democratic control, and professional management of Co-operative Societies. (ii) Pursuant to the 97th amendment to the Constitution of India, in 2013, the Act of 1959 is suitably amended. The introductory portion of the Act of 1959 incorporated the very object envisaged in Article 43-B of the Constitution of India. (iii) The fundamental right to form a co-operative society includes certain fundamental aspects of management of a co-operative society. The right to recruit, transfer the employees, and the right to initiate disciplinary proceedings are fundamental aspects associated with the formation of a co-operative society, and if such rights are taken away, then it violates the fundamental right guaranteed under the Constitution of India. (iv) The restrictions in the impugned provision are not reasonable to claim protection under Article 19(4) of the Constitution of India and that Section 128-A of the Act of 1959 confers unguided excessive power on the Registrar to make Regulations in respect of matters enumerated therein and as such said provision is arbitrary and unconstitutional. (v) The amendment does not seek to achieve the object sought to be achieved and there is no rational nexus between the object and the amendment. (vi) The petitioner Societies are not “Assisted Societies” and there is no Government investment in the petitioner Societies. Thus, the State cannot interfere in the matter of recruitment, transfer and disciplinary action. 13. Sri Shashikiran Shetty, the learned Advocate General, appearing for the respondent State, urged that: (i) Post 97th constitutional amendment, the law similar to the one under challenge is held to be valid by the Madras High Court in C. Manoharan vs. State of Tamil Nadu, 2019 SCC Online Mad 7136. (ii) The Society not being a citizen cannot maintain the petition complaining of violation of fundamental rights. (ii) The Society not being a citizen cannot maintain the petition complaining of violation of fundamental rights. (iii) Though, right to form a co-operative society is a fundamental right, said right stands exercised and fulfilled on its formation. There is no fundamental right to recruit, transfer and hold disciplinary action against the employees. (iv) The autonomous functioning recognized under the Act of 1959 cannot be construed to hold that the State has no control over matters like recruitment, transfer, or a matter concerning disciplinary action against employees of a co-operative society. (v) The State has the power to impose reasonable restrictions under Article 19(4) of the Constitution of India. (vi) The word “public order” in Entry No. 1 of VII Schedule is wide enough to take care of the public safety of members of political society. Section 128-A which is introduced by way of an amendment, has the solemn object of curbing financial irregularities in the co-operative societies, and ensuring public safety. 14. The learned Senior Counsel Sri M.R. Rajgopal appearing for the interveners Federal Societies urged that: (i) The provision is inserted to curb the menace of misappropriation of funds in co-operative societies. (ii) The provision though will take away the power to recruit, transfer, and to hold disciplinary action, it is only a reasonable restriction and it will not violate the fundamental right to form the co-operative society. The right to form a co-operative society is very much intact and the restrictions sought to be imposed will not come in the way of the co-operative society carrying out its business. (iii) The large-scale misappropriation of funds at the level of Primary co-operative societies necessitated the amendment in the form of Section 128-A and the amended provision seeks to serve the object behind the amendment which aims at curtailing financial misappropriation. (iv) There is a presumption to the Constitutional validity of a provision or a law, and it is presumed that the parliament or legislature has the necessary wisdom to bring the law in the best interest of citizens and such legislative wisdom cannot be lightly brushed aside. A strong case is to be made out to strike down a provision as unconstitutional, and the Courts should be extremely slow in striking down a law. (v) Section 128-A has enough inbuilt safeguards. The power conferred on the Registrar is not an absolute power without any restriction. A strong case is to be made out to strike down a provision as unconstitutional, and the Courts should be extremely slow in striking down a law. (v) Section 128-A has enough inbuilt safeguards. The power conferred on the Registrar is not an absolute power without any restriction. The Registrar can frame regulations only in the interest of Co-operative movement and not otherwise. In addition, such power is given to the highest authority of the State under the Act of 1959, and the highest authority is presumed to have the necessary wisdom and experience to discharge the obligations in accordance with law. Mere absence of guidelines for framing the Regulations cannot be termed as excessive delegation and on that score, the provision cannot be struck down. 15. It is a settled position of law that there is a presumption in favour of the constitutional validity of the law. The burden is on the person who questions the constitutional validity to demonstrate that the law is ultra vires. 16. In the light of the contentions raised, the primary question that needs consideration is: Whether the right to form a co-operative society under Article 19(1)(c) which admittedly is a fundamental right extends only till its formation and registration? Whether the right to form a co-operative society under Article 19(1)(c) within its amplitude also includes the right to recruit and transfer the employees, and to initiate disciplinary action against its employees? (a) If the ‘fundamental right’ to form a co-operative society is only a right that ends or stands exercised or fulfilled once a co-operative society is formed, and does not extend beyond such formation or registration, then the right to recruit, transfer and initiate disciplinary action over the employees of the co-operative society cannot be a fundamental right associated with the fundamental right to form a co-operative society. And in that event, the challenge to Section 128-A is not tenable. (b) If the formation of a co-operative society which is admittedly a fundamental right, also encompasses within its fold the right to carry out certain fundamental aspects like recruitment, transfer, and disciplinary action over employees, then the restrictions imposed in Section 128-A will have to be shown as reasonable to save the provision. 17. (b) If the formation of a co-operative society which is admittedly a fundamental right, also encompasses within its fold the right to carry out certain fundamental aspects like recruitment, transfer, and disciplinary action over employees, then the restrictions imposed in Section 128-A will have to be shown as reasonable to save the provision. 17. Amendment to Article 19(1)(c) has taken place simultaneously with insertion of Article 43-B, and a lot of emphasis is laid on Article 43-B, falling in part IV of the Constitution of India. It is necessary to refer to some of the judgments of the Hon'ble Apex Court on the Directive Principles of the State Policy. 18. In Pathumma vs. State of Kerala, AIR 1978 SC 771 the seven- Judge Constitutional Bench of the Hon'ble Apex Court has held that while deciding the reasonableness of restrictions imposed in Article 19(5), the Court has to bear in mind the Directive Principles of the State Policy. In paragraphs No. 9 and 10, the Hon’ble Apex Court has held as under: “9. In fact in the case of His Holiness Kesavananda Bharati Sripadagalavaru v. State of Kerala (1973) 4 SCC 225 : 1973 Supp SCR 1 all the Judges constituting the Bench have with one voice given the Directive Principles contained in the Constitution a place of honour. Hegde and Mukherjee, JJ. as they then were have said that the fundamental rights and the Directive Principles constitute the “conscience” of our Constitution. The purpose of the Directive Principles is to fix certain social and economic goals for immediate attainment by bringing about a non-violent social revolution. Chandrachud, J. observed that our Constitution aims at bringing about a synthesis between “Fundamental Rights” and the “Directive Principles of State Policy” by giving to the former a place of pride and to the latter a place of permanence.” 10. In a later case State of Kerala v. N.M. Thomas, (1976) 2 SCC 310 : 1976 SCC (L&S) 227 one of us (Fazal Ali, J.) after analysing the judgment delivered by all the Judges in the Kesavananda Bharati case on the importance of the Directive Principles observed as follows: “In view of the principles adumbrated by this Court, it is clear that the Directive Principles form the fundamental feature and the social conscience of the Constitution and the Constitution enjoins upon the State to implement these directive principles. The directives thus provide the policy, the guidelines, and the end of socio-economic freedom, and Articles 14 and 16 are the means to implement the policy to achieve the ends sought to be promoted by the directive principles. So far as the Courts are concerned where there is no apparent inconsistency between the directive principles contained in Part IV and the fundamental rights mentioned in Part III, which supplement each other, there is no difficulty in putting a harmonious construction which advances the object of the Constitution. Once this basic fact is kept in mind, the interpretation of Articles 14 and 16 and their scope and ambit become as clear as day.” 19. In Kasthurilal vs. State of Jammu and Kashmir, (1980) 4 SCC 1 the Hon’ble Apex Court has held as under: “12.......The directive principles concretise and give shape to the concept of reasonableness envisaged in Articles 14, 19, and 21 and other Articles enumerating the fundamental rights. By defining the national aims and the constitutional goals, they set forth the standards or norms of reasonableness that must guide and animate governmental action. Any action taken by the Government to give effect to anyone or more of the directive principles would ordinarily, subject to any constitutional or legal inhibitions or other overriding considerations, qualify for being regarded as reasonable, while an action that is inconsistent with or runs counter to a directive principle would prima facie incur the reproach of being unreasonable.” (Emphasis supplied) 20. In the light of the law laid down in the above referred cases, this Court has to necessarily read the fundamental right to form a co-operative society conferred under Article 19(1)(c) through the prism of Article 43-B. If not, the true flavor, fragrance, and dimension of fundamental right guaranteed under Article 19(1)(c) will be obscured. 21. At this juncture, it is also necessary to refer to the relevant portion of objects and reasons behind the 97th amendment of the Constitution as well as the 2013 amendment to the Act of 1959. The relevant portion of the statement of objects and reasons for the 97th amendment to the Constitution of India is as under: “STATEMENT OF OBJECTS AND REASONS” The co-operative sector, over the years, has made significant contributions to various sectors of the national economy and has achieved voluminous growth. The relevant portion of the statement of objects and reasons for the 97th amendment to the Constitution of India is as under: “STATEMENT OF OBJECTS AND REASONS” The co-operative sector, over the years, has made significant contributions to various sectors of the national economy and has achieved voluminous growth. However, it has shown weaknesses in safeguarding the interests of the members and fulfillment of objects for which these institutions were organised. There have been instances where elections have been postponed indefinitely and nominated office bearers or administrators remaining in-charge of these institutions for a long time. This reduces the accountability of the management of co-operative societies to their members. Inadequate professionalism in management in many of the co- operative institutions has led to poor services and low productivity. Co-operatives need to run on well established democratic principles and elections held on time and in a free and fair manner. Therefore, there is a need to initiate fundamental reforms to revitalize these institutions in order to ensure their contribution in the economic development of the country and to serve the interests of members and public at large and also to ensure their autonomy, democratic functioning and professional management. 2. The “co-operative societies” is a subject enumerated in Entry 32 of the State List of the Seventh Schedule of the Constitution and the State Legislatures have accordingly enacted legislations on co-operative societies. Within the framework of State Acts, growth of co-operatives on large scale was envisaged as part of the efforts for securing social and economic justice and equitable distribution of the fruits of development. It has, however, been experienced that in spite of considerable expansion of co-operatives, their performance in qualitative terms has not been up to the desired level. Considering the need for reforms in the Cooperative Societies Acts of the States, consultations with the State Governments have been held at several occasions and in the conferences of State Co-operative Ministers. A strong need has been felt for amending the Constitution so as to keep the co-operatives free from unnecessary outside interferences and also to ensure, their autonomous organisational set up and their democratic functioning. 3. The Central Government is committed to ensure that the co-operative societies in the country function in a democratic, professional, autonomous and economically sound manner. A strong need has been felt for amending the Constitution so as to keep the co-operatives free from unnecessary outside interferences and also to ensure, their autonomous organisational set up and their democratic functioning. 3. The Central Government is committed to ensure that the co-operative societies in the country function in a democratic, professional, autonomous and economically sound manner. With a view to bring the necessary reforms, it is proposed to incorporate a new Part in the Constitution so-as to provide for certain provisions covering the vital. aspects of working of co- operative societies like democratic, autonomous and professional functioning. A new article is also proposed to be inserted in Part IV of the Constitution (Directive Principles of State Policy) for the States to endeavor to promote voluntary formation, autonomous functioning, democratic control and professional management of cooperative societies. The proposed new Part in the Constitution, inter alia, seeks to empower the Parliament in respect of multi-State co-operative societies and the State Legislatures in case of other co-operative societies to make appropriate law, laying down the following matters, namely: (a) provisions for incorporation, regulation and winding up of co-operative societies based on the principles of democratic member-control, member- economic participation and autonomous functioning. (b) xxx (c) xxx (d) xxx (e) xxx (f) xxx (g) xxx (h) xxx (i) xxx 4. It is expected that these provisions will not only ensure the autonomous and democratic functioning of cooperatives but also ensure the accountability of management to the members and other stakeholders and shall provide for deterrence for violation of the provisions of the law. 5. The Bill seeks to achieve the above objectives.” (Emphasis supplied) 22. The statement of objects and reasons is explicit. The 97th amendment to the Constitution is aimed to strengthen the Co-operative Sector, which has played a significant role in the economy of the nation. Some of the objects of the 97th amendment are crystalysed in Article 43(B) Said Article directs the State to promote voluntary formation, autonomous functioning, democratic control, and professional management of co-operative societies. 23. In tune with such Directive Principle, the Act of 1959 is amended in 2013. Article 19(1)(c) is not the only provision amended in terms of the 97th Amendment. A whole new Article in the form of Article 43-B is inserted. Pursuant to that the Act of 1959 is also amended in sync with the 97th amendment to the Constitution. 23. In tune with such Directive Principle, the Act of 1959 is amended in 2013. Article 19(1)(c) is not the only provision amended in terms of the 97th Amendment. A whole new Article in the form of Article 43-B is inserted. Pursuant to that the Act of 1959 is also amended in sync with the 97th amendment to the Constitution. 24. The newly inserted Article 43-B reads as under: 43-B. Promotion of Co-operative Societies - The State shall promote voluntary formation, autonomous functioning, democratic control and professional management of Co-operative Societies. The very phrase found in Article 43-B is introduced by way of amendment of the Act of 1959. 25. Now the question is what actually these amendments mean and how it will impact co-operative societies. The expression “autonomous functioning” speaks about the autonomy of a co-operative society in its functioning. The plain dictionary meaning of the word “autonomous” (as in Merriam- Webster dictionary) is as follows: (a) “having the right or power of self- government (b) undertaken or carried on without outside control: Self contained (c) existing or capable of existing independently (d) responding, reacting, or developing independently of the whole 26. The portion of the statement of the object specifically lays emphasis by saying “A strong need has been felt for amending the Constitution so as to keep the Co-operatives free from unnecessary outside interferences and also to ensure their autonomous organisational set-up and their democratic functioning”. In the context of what is stated above, the expression “autonomous functioning” apart from self-control and self-governance also means less interference by outsiders. 27. The expression “democratic control” speaks about the control of a co-operative society by the Elected Body/Board. Said control cannot be interpreted to say that the Board will have no power to recruit, transfer, and hold a disciplinary inquiry when those functions are undoubtedly essential in the management of a co-operative society. The interpretation that the right to form a co-operative society is only confined to the formation and registration of a co-operative society and not beyond, will defeat the purpose of 97th amendment of the Constitution of India. Thus, the expression democratic control would also mean control over recruitment, transfer and disciplinary action. Of course, such control cannot be expanded to say that the absolute control vests with the co-operative society. The right may be subjected to regulations which are reasonable. Thus, the expression democratic control would also mean control over recruitment, transfer and disciplinary action. Of course, such control cannot be expanded to say that the absolute control vests with the co-operative society. The right may be subjected to regulations which are reasonable. For example, generally speaking, the State may certainly fix the qualifications for certain important posts, frame guidelines for transfer of employees within various branches of a co-operative society if it is having more than one branch. 28. Indeed it is true, that dimensions and contours of a fundamental right to form a co-operative society are not elaborated in Article 19(1)(c). However, Article 43-B which is simultaneously introduced by way of the 97th Constitutional amendment is a pointer and the guide to the nature of fundamental right guaranteed in Article 19(1)(c). As already noticed, the statement of objects and reasons for 97th amendment unequivocally speak about the need to strengthen the co-operative movement and the sector by providing autonomy in its functioning and ensuring democratic control and professional management. Had the parliament intended to make the formation of a co-operative society a fundamental right and confine the said fundamental right only to the extent of formation and registration of a co-operative society, there was no need to introduce Article 43-B of the Constitution of India. 29. Article 43-B of the Constitution of India imposes obligation on the State to endeavor to promote voluntary formation, autonomous functioning, democratic control, and professional management of co-operative societies. It also goes without saying that the four components envisaged in Article 43-B are supplemental to each other and aim at promoting and strengthening Co-operative Sector. And one of the ways to achieve it is to ensure less Government control. 30. Since the whole amendment is aimed at providing functional autonomy and to strengthen the Co-operative Sector by promoting voluntary formation, it is imperative that the association of people who have come together to form a co-operative society should have a say in crucial matters relating to recruitment, transfer and disciplinary action against the employees. 31. Keeping in mind the Directive Principles contained in Article 43-B, this Court is of the view that the fundamental right to form a co-operative society does not stop and stands fulfilled on the mere formation and registration of a co- operative society. 31. Keeping in mind the Directive Principles contained in Article 43-B, this Court is of the view that the fundamental right to form a co-operative society does not stop and stands fulfilled on the mere formation and registration of a co- operative society. The fundamental right to form a co-operative society in its fold also includes a right to autonomous functioning. The view that there is no fundamental right over the matter pertaining to recruitment, transfer and disciplinary action of employees of the co-operative society would defeat the object of Article 43-B of Constitution of India. However, the right of autonomous functioning can certainly be subjected to certain regulations and reasonable restrictions. However, the regulations and restrictions cannot encroach upon certain basic aspects of the formation of a co-operative society and autonomous functioning envisaged under Article 43-B of the Constitution of India. 32. The next question is; whether Section 128-A of the Act of 1959 which is under challenge imposes only a reasonable restrictions which are permissible under Article 19(4) of the Constitution of India? 33. The provision under scrutiny enables the Registrar to create a common cadre of employees for any class of co-operative societies. It also enables the Registrar to authorize a Federal Society to exercise the power of recruitment, transfer, and disciplinary action in respect of such class of employees of co-operative societies as he may specify and to make such regulations necessary to carry out the said purpose. 34. The provision also provides that once the power is conferred on a federal society to recruit, transfer, and initiate disciplinary action in respect of employees of a Primary co-operative society then those Primary Co-operative Societies which are affiliated to the said Federal Society shall not have the power over the matters conferred on the Federal Society. 35. As can be noticed, once the Registrar frames Regulations under Section 128-A, the right of the Primary co-operative society over recruitment, transfer and disciplinary action gets extinguished. Does this amount to a reasonable restriction or unreasonable restriction infringing upon the fundamental right is the question. 36. 35. As can be noticed, once the Registrar frames Regulations under Section 128-A, the right of the Primary co-operative society over recruitment, transfer and disciplinary action gets extinguished. Does this amount to a reasonable restriction or unreasonable restriction infringing upon the fundamental right is the question. 36. The learned Advocate General appearing for the respondent-State as well as the learned Senior counsel appearing for the intervening applicants would urge that the Registrar has framed the Regulations only to regulate the recruitment of the Chief Executive Officer of a co-operative society and the rest of the employees of the co-operative society are not covered under the Regulations. Thus, it is urged that Section 128-A in its operation is made applicable by the Registrar only concerning the recruitment, transfer, and disciplinary action against the Chief Executive Officer of a co-operative society. Thus, the restrictions are reasonable. There is no invasion of the fundamental right guaranteed under Article 19(1)(c) and there is no interference in the autonomous functioning of a co-operative society. 37. It is an admitted position that the Chief Executive Officer of a co-operative society is head of the rest of the employees of a co-operative society. The post of Chief Executive Officer is very much recognized in the Act of 1959 and his rights, duties, and responsibilities are also statutorily defined. When the members of a group come together with the object of forming a co-operative society to achieve the purpose set out in the bye-law, and when the law recognizes that those persons have autonomy in the functioning of the Society, the right to choose the suitable person to manage and run the co-operative society, is also a facet of the fundamental right to form the co-operative society and the autonomous functioning of a co-operative society. 38. 38. Though, it is urged that the Registrar in his discretion keeping in mind the interest of the co-operative movement has only decided to confer the power of recruitment of the Chief Executive Officer of a co-operative society, and has not disturbed the power of the co-operative society to recruit other employees, the said contention does not come to the aid of the State in a challenge to the provision resting on a premise that the provision has conferred unguided power on the Registrar to frame Regulations curtailing the right to recruit, transfer and disciplinary action of any class of employees of a co-operative society. Thus, for the State to defend the provision, it is of no defence to contend that the provision though confers the wide power, the authority under the impugned provision is exercising self-restraint on the power conferred. 39. This being the position, this Court cannot conclude that the vast unguided powers conferred on the Registrar of co-operative societies under Section 128-A are reasonable. On the other hand, the said powers encroach upon the rights of the members of the co-operative society who enjoy a certain degree of autonomy in the functioning of a co-operative society which extends to recruitment and transfer of employees which are essential and fundamental to the functioning of the co-operative society. This Court is of the view that the power to recruit, transfer, and disciplinary action is fundamental in character in running the co- operative society cannot be taken away by the State and such power cannot be conferred on a third party (Federal Society) which has no role in the formation of a co-operative society. 40. In the backdrop of Article 19(1)(c) read with Article 43-B, and for the reasons assigned above, the powers conferred on the Registrar under Section 128-A, will impose prohibition on the matters covered in the Regulations framed under the provision. It is evident in Section 128-A (1) which says “Where such federal society is so authorized by the Registrar, the affiliated co-operative societies shall not have powers to deal with such categories of employees except to the extent the regulations may permit”. Thus, the Regulations cease to be regulations and they amount to prohibition on the matters covered by the Regulations, and thus they become unreasonable, manifestly arbitrary and encroach upon the fundamental rights. 41. Thus, the Regulations cease to be regulations and they amount to prohibition on the matters covered by the Regulations, and thus they become unreasonable, manifestly arbitrary and encroach upon the fundamental rights. 41. The contention of the State that huge money flowing from the Government schemes payable beneficiaries are routed through Primary co-operative societies is not a ground to take away the power of recruitment of employees of co-operative society. At the end of the day, the co-operative society is nothing but a self-help group which has the protection under Article 19(1)(c) of Constitution of India. 42. Though, the learned Advocate General appearing for the respondent-State and the learned Senior counsel appearing for the respondent urged that the right to file a Writ Petition complaining about violation of Article 19(1)(c) of the Constitution of India is not available to the Societies on the premise that the fundamental right under Article 19 is guaranteed to the citizens and not to the Societies or juristic persons. It is to be noticed that the fundamental right is conferred on the citizens who form the Society. The said fundamental right to form a co-operative society has to be exercised only by the members. After the registration of the co-operative society, the members collectively pursue the activity of the co-operative society in the name of the co-operative society. In the case of Akshay N. Patel v. Reserve Bank of India, (2022) 3 SCC 694 the Hon’ble Apex Court has considered on merit the petition filed by the Managing Director of a Corporation challenging the constitutional validity. In the said judgment, in paragraph No. 11, the Hon’ble Apex Court has observed that over the years shareholders and business persons have filed petitions in their individual capacity alleging infringement of the fundamental right to carry on business or a profession of their choice. This being the position, this Court is of the view that a Writ Petition filed by the members of the co-operative societies along with the co-operative societies complaining the infringement of fundamental rights under Article 19(1)(c) of the Constitution of India is maintainable. 43. This being the position, this Court is of the view that a Writ Petition filed by the members of the co-operative societies along with the co-operative societies complaining the infringement of fundamental rights under Article 19(1)(c) of the Constitution of India is maintainable. 43. Sri M.R. Rajgopal, the learned Senior counsel appearing for the interveners placed reliance on the judgment of Akshay N. Patel supra to contend that the restrictions imposed under Section 128-A of the Act of 1959 are reasonable and they pass the four-pronged approach laid down in the case of K.S. Puttaswamy vs. Union of India, (2017) 10 SCC 1 . The four tests evolved are as under: “319. This discussion brings out that the following four subcomponents of proportionality need to be satisfied: 319.1 A measure restricting a right must have a legitimate goal (legitimate goal stage). 319.2 It must be a suitable means of furthering this goal (suitability or rational connection stage). 319.3 There must not be any less restrictive but equally effective alternative (necessity stage). 319.4 The measure must not have a disproportionate impact on the right holder (balancing stage).” 44. After having considered the impugned provision in the backdrop of the aforementioned tests, this Court is of the view that there are no justifiable reasons to hold that the provision is less restrictive and without any alternative. And the impugned provision also does not seem to achieve the object of the amendment. On the other hand, the provision that authorises the Registrar to confer the power of recruitment, transfer, and disciplinary action on the Federal Society, taking away such power from the co-operative society runs directly contrary to Article 43-B of the Constitution. Section 128-A confers power on the Registrar over the matters specified therein. Once such power is exercised by the Registrar, then the co-operative society loses its power over the matter of recruitment, transfer, and disciplinary action concerning its employees. Thus, Section 128-A cannot be construed as a Regulation. On the other hand, it is a total restriction amounting to prohibition on three matters specified in it and these three matters are essential and fundamental to the functioning of the Society. This being the position, the impugned provision which takes away the essential and fundamental aspects of the management cannot be said to be proportional, reasonable, rationale. On the other hand, it is a total restriction amounting to prohibition on three matters specified in it and these three matters are essential and fundamental to the functioning of the Society. This being the position, the impugned provision which takes away the essential and fundamental aspects of the management cannot be said to be proportional, reasonable, rationale. Here again at the cost of repetition this Court would quote what is held in Kasthurilal supra: “Any action taken by the Government to give effect to anyone or more of the directive principles would ordinarily, subject to any constitutional or legal inhibitions or other overriding considerations, qualify for being regarded as reasonable, while an action that is inconsistent with or runs counter to a directive principle would prima facie incur the reproach of being unreasonable.” Thus, this Court is of the view that the action contemplated in Section 128-A of the Act of 1959 is inconsistent and runs contrary to the mandate of Article 43-B of the Constitution of India. Thus, it is unreasonable. 45. There is yet another reason to hold that Section 128-A does not pass the test of reasonableness and rationality. The Primary co-operative society being an Independent Body Corporate Entity which is founded on the principle of voluntary formation agreed upon by a group of persons has certain objectives to be achieved. The Board of Directors are chosen in a democratic process to run the co-operative society and will know the requirements of the co-operative society and those persons are best suited to judge as to who is suitable to be recruited as the employee of a co-operative society. However, this power of recruitment is sought to be conferred on a Federal Society which is a different entity altogether. No doubt, the Primary co-operative society may be a member of a Federal co-operative society and that by itself does not give any control over the administration of a Primary co-operative society. However, this power of recruitment is sought to be conferred on a Federal Society which is a different entity altogether. No doubt, the Primary co-operative society may be a member of a Federal co-operative society and that by itself does not give any control over the administration of a Primary co-operative society. Thus, the whole idea of conferring the power to recruit an employee of a co-operative society on an entirely different Society (Federal Society) undermining the power to recruit the suitable person to meet the requirement of a co-operative society does not gel with philosophy of Article 43-B. This is more so, as the nature of the business of the Federal Society and the nature of the business of the affiliated Primary Society may be entirely different and it is quite possible that the Federal Society may not be in a position to judge the requirement of a Primary Society. 46. Likewise, in a situation where a Primary co-operative society has more than one branch, then also a decision to transfer the employee of a Primary co-operative society from one branch to another branch is a decision to be taken by the co-operative society in which, such employee is sought to be transferred. Which of its employee is to be transferred, when and to which branch, are the decisions that falls within the domain of the master and that Society will be in the best position to take appropriate action by assessing the performance of its employee. Federal Society will not have requisite information in this behalf and conferring such power to the Federal Society on the face of it is unreasonable. Such power may turn out to be a counter- productive as well. 47. Section 128-A on its plain reading would also suggest that the Registrar is competent to frame Regulations transferring an employee of a co-operative society from one co-operative society to another co-operative society. In such an event, it amounts to changing the master of an employee who is transferred from one co-operative society to another. Such transfer would be absolutely illogical given the fact that different co-operative societies may have different types of business and work culture. Such a wide power violates the protection of autonomous functioning and democratic control which is enjoined in Article 43-B of the Constitution of India and sought to be achieved through Article 19(1)(c). Such transfer would be absolutely illogical given the fact that different co-operative societies may have different types of business and work culture. Such a wide power violates the protection of autonomous functioning and democratic control which is enjoined in Article 43-B of the Constitution of India and sought to be achieved through Article 19(1)(c). Viewed from this angle, the impugned provision cannot be said to be a reasonable restriction on the fundamental right conferred under Article 19(1)(c) of the Constitution of India. 48. This Court has referred to the judgments cited by the respondent-State in the case of State of Andhra Pradesh vs. McDowell and Company, (1996) 3 SCC 709 . The principle laid down in the said judgment is noted. The Hon'ble Apex Court has held that the constitutional validity of a provision can be struck down only on two grounds namely; lack of legislative competence or violation of any of the fundamental rights under Part III of the Constitution of India. This Court is of the view that the challenge to the validity of Section 128-A falls under the second category. Reliance is also placed by the State on the judgment of Daman Singh vs. the State of Punjab, (1985) 2 SCC 670 . The said judgment is rendered before the 97th Amendment of the Constitution. Hence, cannot be made applicable to the present case. The judgment of the Hon'ble Apex Court in Arup Bhuyan vs. State of Assam, (2023) 8 SCC 745 has no application to the questions involved in the present case. In the case of H.S. Mohan Reddy vs. the State of Karnataka, W.P. No. 2710/2020 the Division Bench of this Court was dealing with a question as to whether the right to vote in a co-operative society is a fundamental right and whether Section 128-A of Act of 1959 is violative of Article 19(1)(c). The principle laid down in the said judgment has no application to the case on hand. 49. The interveners have relied upon the judgment of the Hon'ble Apex Court in the case of the State of Uttar Pradesh vs. Deoman Upadhya, (1960) SCC Online SC 8. Said judgment does not deal with the question of violation of fundamental rights guaranteed under Article 19(1)(c) of the Constitution of India and is of no assistance to the interveners. 49. The interveners have relied upon the judgment of the Hon'ble Apex Court in the case of the State of Uttar Pradesh vs. Deoman Upadhya, (1960) SCC Online SC 8. Said judgment does not deal with the question of violation of fundamental rights guaranteed under Article 19(1)(c) of the Constitution of India and is of no assistance to the interveners. The judgment in M/s. Laxmi Khandsari and Others vs. State of U.P and Others, (1981) 2 SCC 600 relied on by the respondents does support the contention of the petitioners. In the said judgment the Hon'ble Apex Court has held that the onus of proving that the restrictions are reasonable is on the State. The Hon'ble Apex Court has held that if the restrictions imposed are in furtherance of Directive Principles then, the restrictions would be manifestly reasonable. Converse if it is, if the restrictions imposed run contrary to Directive Principles, then such restrictions are unreasonable. In the instant case, this Court has noticed and held that the restrictions are in conflict with the Directive Principles. 50. The learned Advocate General appearing for the respondent- State stressed on the judgment of the Division Bench of Madras High Court in C. Manoharan supra. In the said case, the constitutional validity of Section 75(3) of the Tamil Nadu Co-Operative Societies Act was under challenge. Section 75(3) of the said Act provided for constitution of Common Cadre Committee. It is urged that the though language employed in the said provision differed from the language employed in Section 128-A of Act of 1959, in substance the provision is pari materia with Section 128-A of Act of 1959. Thus, learned Advocate General would contend that the said judgment has persuasive value and it is held that Article 43-B of Constitution of India cannot be applied to strike down Section 75(3) of the Tamil Nadu Co-operative Societies Act. 51. This Court has considered the said judgment. The Division Bench of Madras High Court has held that Directive Principles of the State Policy are not justifiable and the Court would not normally issue directions for implementation except in cases relating to environmental issues and other issues of public importance. 51. This Court has considered the said judgment. The Division Bench of Madras High Court has held that Directive Principles of the State Policy are not justifiable and the Court would not normally issue directions for implementation except in cases relating to environmental issues and other issues of public importance. The Court also held that the autonomy recognised under Article 43-B does not extend to enable the co-operative society to take law unto themselves and frame their own policy for recruitment, transfer and to regulate their business as per their whims and fancies. 52. The judgments of the Hon’ble Apex Court on Directive Principles of the State Policy referred to by this Court are not brought to the notice of the Madras High Court. With due respect, this Court is not persuaded to follow the said judgment. 53. The further reliance on the full Bench judgment of Madras High Court in S. Bagavathy vs. State of Tamil Nadu, 2007 (2) CTC 207 is also not helpful to the respondent-State. In the said judgment, the Madras High Court was dealing with the question of constitutional validity of the Tamil Nadu Protection of Interests of Depositors (in Financial Establishments) Act, 1997. Suffice it to say that the questions involved in the said case were entirely different and the petitioners in those case did not have the benefit of the amended Article 19(1)(c) and 43-B of Constitution of India. 54. Learned Senior counsel Sri Satyanarayana Rao, appearing for the intervening respondent urged before this Court that the petitioners cannot claim the benefit of amended Article 19(1)(c) and 43-B of Constitution of India. Learned Senior counsel placed reliance on the judgment of the Hon’ble Apex Court in the case of Union of India vs. Rajendra N. Shah, 2021 SCC Online SC 474 and urged that the 97th amendment of Constitution of India is declared unconstitutional and the petitioners cannot claim fundamental right to form a co-operative society. The said contention cannot be accepted. The Hon’ble Apex Court has held that part IX-B of Constitution of India introduced in 97th amendment is unconstitutional in so far as the State Co-operative Societies Act. The said Chapter is held to be valid and applicable to Multi State Co-operative Societies Act. The amendment to Article 19(1)(c) and introduction of Article 43-B of Constitution was never under challenge in the said proceeding and those amendments are intact. 55. The said Chapter is held to be valid and applicable to Multi State Co-operative Societies Act. The amendment to Article 19(1)(c) and introduction of Article 43-B of Constitution was never under challenge in the said proceeding and those amendments are intact. 55. Before concluding, it is necessary to refer to State of Madras vs. V.G. Row, AIR 1952 SC 196 . The Apex Court has held as under: “It is important in this context to bear in mind that the test of reasonableness, wherever prescribed, should be applied to each individual statute impugned, and no abstract standard, or general pattern, of reasonableness can be laid down as applicable to all cases. The nature of the right alleged to have been infringed, the underlying purpose of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing conditions at the time, should all enter into the judicial verdict. In evaluating such elusive factors and forming their own conception of what is reasonable, in all the circumstances of a given case, it is inevitable that the social philosophy and the scale of values of the judges participating in the decision should play an important part.” 56. This Court has also kept in mind the principle laid down by the Hon’ble Apex Court in the case of V.G. Row supra and has considered the challenge in the context of 97th amendment to the Constitution of India and in the context of amendment by Act No. 27/2023 to the Karnataka Co-operative Societies Act, 1959. 57. Before concluding, this Court would like to place its appreciation for the assistance rendered by the learned counsel for the petitioners, learned Advocate General for the State, learned Government Advocate and the learned Senior counsel for the interveners. 58. For the aforementioned reasons, this Court concludes as under: (a) The right to form a co-operative society which is a fundamental right under Article 19(1)(c) of Constitution of India, within its fold includes right to recruit, transfer the employees of a co-operative society and to initiate disciplinary action against its employees. (b) The State is competent to impose reasonable restrictions on the fundamental right to form a co-operative society and even on the matters relating recruitment, transfer, and disciplinary action against the employees of a co-operative society. (b) The State is competent to impose reasonable restrictions on the fundamental right to form a co-operative society and even on the matters relating recruitment, transfer, and disciplinary action against the employees of a co-operative society. However, the State cannot completely prohibit or take away the right of a co-operative society to recruit, transfer, and to initiate disciplinary action on its employees. (c) Section 128-A of the Act of 1959 which empowers Registrar to completely take away the right of a co-operative society to recruit, transfer or hold disciplinary enquiry against its employees is ultra vires the Constitution of India. 59. Hence, the following; ORDER: (a) Writ Petitions are allowed. (b) Section 128-A of the Karnataka Co-operative Societies Act, 1959 introduced by Act No. 27 of 2023 is ultra vires the Constitution of India and struck down. (c) No order as to costs.