ORDER [ENTITY], J.
1. As the questions that arise for determination in these cases are inter connected? we propose to dispose of them by a common order.
2. As on 1-11-[SECTION]56 on which day the new State of Karnataka comprising of the areas specified in [SECTION] of the [ACT] come into being, there were co-operative laws regulating the establishment, functioning and control of co-operative societies in the respective erstwhile areas of the new State. The new State by virtue of the powers derived by [SECTION] and [SECTION] to the [ACT], enacted the uniform Karnataka Co-operative Societies Act, [SECTION]59 (Karnataka Act 11 of [SECTION]59) ('the Act') repealing all the corresponding enactments referred to in [SECTION] of that Act. The Act came into force from 1st June, [SECTION]60.
3. [SECTION] of the Act containing [SECTION] as originally enacted made special provisions for the establishment of Land Mortgage Banks, their area of operation, control and all other incidental matters. Broadly the said chapter provided for the establishment of an apex Bank then called the 'State Land Mortgage Bank', later as State Land Development Bank from 26-6-[SECTION]65 but is now called as 'the State Agricultural and Rural Development Bank' ('Apex Bank') from 9-1-[SECTION]84 and one Land Mortgage Bank for each revenue Taluk called as 'Primary Land Development Bank' of the Taluk (PLD Bank) from 26-6-[SECTION]65, but is now called as Agricultural and Rural Development Bank of the Taluk (ARD Bank) from 9-1-[SECTION]84 to achieve the purposes and objects enumerated therein. This chapter with the Rules made thereunder as also under [SECTION] of the Act and other provisions of the Act to the extent they were not - in derogation of the special provisions governed the societies or Banks established arid functioning under the Act. Both these 'societies' as separate organisations were free to make appointments of the personnel required and deal with them subject to rules made by Government under the Act.
4. The Karnataka Co-operative Societies (Amendment)' Act of [SECTION]75 (Karnataka Act 39 of [SECTION]75) ([SECTION]75 Act) that came into force on and from 23-9-[SECTION]75 (vide Notification No. RDC 322 CEA 75 dated 23-9-[SECTION]75) inter alia incorporated [SECTION] empowering Government to constitute an authority or authorities on matters of recruitment, training and disciplinary control of such class of employees of co-operative societies prescribed by Rules but in receipt of financial aid from Government. In other words this Section empowered Government to establish a Common Cadre Authority ([ACT]) for certain class of co-operative societies. The Karnataka Co-operative Societies (Amendment) Act of [SECTION]76 (Karnataka Act [SECTION] of [SECTION]76) ('[SECTION]76 Act') which came into force from 20-1-[SECTION]76 [vide : [SECTION]] incorporated [SECTION] of the Act empowering Government to give directions for reservations to members of scheduled castes, scheduled tribes and backward classes. With the object of effectuating the purposes of [SECTION] Government in its Notification Nos. (i) RDC 37 CLM 76 dated 26-3-[SECTION]77 and (ii) RDC 21 CLM 78 dated 16-8-[SECTION]78 published in the Karnataka Gazette dated 31-3-[SECTION]77 and 28-8-[SECTION]78 respectively framed [SECTION] & [SECTION], the first one in respect of the class of societies referred to in [SECTION] and the second one in respect of [ENTITY] only.
5. In [CASE NUMBER] dated 24-8-[SECTION]78 (Annexure-A in W.P. No. 3598 of [SECTION]79) Government constituted a 'Common Cadre Authority' for recruitment, training and disciplinary control of all the employees of [ENTITY] ([ACT]) for the State. With the prior approval of Government sanctioned in its order No. RDC 37 CLM 80 dated 30-1-[SECTION]81 (published in the Karnataka Gazette dated 26-2-[SECTION]81) the [ACT] had framed regulations called 'the Regulations regarding recruitment, emoluments, terms and conditions of service including the disciplinary control of the employees of PLD Banks in the State' (Regulations) which have come into force from 1-10-[SECTION]78 (vide Regulation No. 2).
6. After its constitution by Government, the [ACT] had sought to interfere with the recruitment, transfers and disciplinary control of employees of the [ENTITY] in diverse ways. Some of the [ENTITY], their Presidents or their employees as the case may be have approached this Court under [SECTION] of the [ACT] in Writ Petitions Nos. 3598, 11694, [SECTION]803, of [SECTION]79, 13336, 21034 30711 of [SECTION]81 and 7666 of [SECTION]83 challenging the validity of [SECTION] in whole or [SECTION], [SECTION], [SECTION] or the actions taken thereunder by the [ACT] against them or their employees. During the pendency of these cases before this Court, the. Karnataka Co-operative Societies (Amendment) Act of [SECTION]84 (Karnataka Act 5 of [SECTION]84) ([SECTION]84 Act) which came into force from 9-1-[SECTION]84 substituted [SECTION] with a new Section from that day empowering the Registrar of Co-operative Societies (Registrar) to exercise that power on complying with the reqirements stipulated thereto. With this brief statement of legislation and facts that are relevant to the Writ Petitions, we will notice the facts in Writ Appeal No. 1211 of [SECTION]85.
7. At Coondapur, Holalkere and K. R. Nagar Towns which are also the Taluk Head Quarters of those revenue taluks of Dakshina Kannada, Chitradurga and Mysore Districts, there are [ENTITY] for those taluks constituted and functioning under [SECTION] of the Act. In these three [ENTITY] prior to 18th June, [SECTION]84 [ENTITY], [ENTITY] and [ENTITY] were working as the Secretaries of the said Banks respectively. In order No. [ACT]/EST/TR/8399-8410-84-85 dated 18-6-[SECTION]84 (Annexure-C) the [ACT] transferred those three Secretaries from their respective Banks to other Banks and that order which gave rise to Writ Petition No. 16346 of [SECTION]84 by [ENTITY] before this Court out of which W.A. No. 1211 of [SECTION]85 arises before us reads thus :
ORDER The following transfer and postings of common cadre authority, officials are transferred in the interest of bank work :
They should report for duty at their new place of postings forthwith. The President of the concerned Primary Co-operative Land Development Banks are requested to relieve the transferred officials immediately.
Sl.No. Name of the Employee Name of the PLD Bank Remarks
[ENTITY], Secretary, PLDS Coondapur Secretary PLDE Holalkere Vice Sri [ENTITY], Transferred
2. [ENTITY], PLDB, Holalkere Secretary Secretary, PLDB, Gowribidanur Vice Sri [ENTITY], transferred
3. [ENTITY] Secretary, PLDB K.R. Nagar.
Secretary PLDB, Coondapur Vice [ENTITY], transferred Sd/-
For Member Secretary, Common Cadre Authority."
In pursuance of the said order of transfer [ENTITY] who is appellant No. 2 in W. A. No. 1211 of [SECTION]85 got himself relieved at ARD Bank K. R. Nagar, reported for duty at ARD Bank, Coondapur which accepted the said order of transfer, relieved [ENTITY] and gave him posting as its Secretary. On such relief from ARD Bank Coondapur, [ENTITY] reported for duty at ARD Bank, Holalkere which did not accept the said order of transfer and refused to take him to duty and issued him an order on 26-7-[SECTION]84 as hereunder:
"HOLALKERE TALUK PRIMARY CO-OPERATIVE LAND DEVELOPMENT BANK LIMITED, HOLALKERE No. PCA & RDB/HRE/845/84-85 dated 26-7-[SECTION]84 ENDORSEMENT With reference to the duty report of Sri [ENTITY], dated 26-7-[SECTION]84, the Board of Directors have resolved to continue the present Secretary, viz., Sri. [ENTITY] as his service are required in the interest of Bank's work.
His duty report is not accepted.
[ENTITY] President The Holalkere Taluk Primary Co-operative Bank Limited Holalkere"
Without approaching the [ACT] for relief or with no alternative left as the case may be, [ENTITY], who is Respondent-1 in W.A. No. 1211 of [SECTION]85 moved this Court in Writ Petition No. 16346 of [SECTION]84 for a mandamus to the [ACT] to provide him the requisite place of work and salary and other incidental reliefs.
8. On 17-6-[SECTION]85, [ENTITY], J. disposed of the said Writ Petition and connected Writ Petitions by a common order. On an examination of the contentions urged by Respondent-1 and others, on similar facts, the Learned Judge declared that the transfer order made by the [ACT] was invalid and issued certain consequential detections. Aggrieved by this order, the ARD Bank Coondapur which was Respondent-8 and with the leave of the Court, [ENTITY] who was not a party to that Writ Petition have filed Writ Appeal No. 1211 of [SECTION]85 before us.
9. In pursuance of an interim order made in this appeal, the Registrar has made a further order of transfer thereafter. But, in the very nature of things, we must examine the appeal without reference to either of them.
10. We consider it more appropriate to deal with this Writ Appeal first and then take up the challenges to [SECTION] of the Act, [SECTION] and [SECTION] of the Rules, the regulations and the various orders in that order.
11. Sri [ENTITY] Learned Advocate appeared for the petitioners in Writ Petitions Nos. 3598, 11694, [SECTION]803 of [SECTION]79, 13336 and 21034 of [SECTION]81; Sri [ENTITY] Learned Advocate has appeared for the petitioner in Writ Petition Nos. 30711 of [SECTION]81; Sri [ENTITY], Learned Advocate has appeared for the petitioner in Writ Petition No. 7666 of [SECTION]83 and Sri [ENTITY], Learned Advocate has appeared for the appellants in W.A. No. 1211 of [SECTION]85. Sri [ENTITY], Learned High Court Government Advocate has appeared for the State of Karnataka and its subordinate authorities in all these cases. [ENTITY], [ENTITY], [ENTITY], [ENTITY], [ENTITY], [ENTITY], [ENTITY], [ENTITY] and [ENTITY], Learned Advocates have appeared for some of the respondents in the respective cases. We have also heard [ENTITY] and other Learned Counsel appearing in the batch of cases that were posted along with these cases, which we propose to hear and dispose of them separately.
12. Sri [ENTITY] has urged that the view expressed by the Learned Judge on the validity of the order of transfer made by the [ACT] is unsound and unsustainable.
13. [ENTITY] and [ENTITY] have sought to support the order of the Learned Single Judge.
14. We may at the very outset observe that respondents 2 to 4 in W.A. No. 1211 of [SECTION](SIC)5 (i.e., the State of Karnataka and its subordinates) instead of filing appeals against the order made by [ENTITY], J. in Writ Petition No. 16346 of [SECTION]84 and other cases that had created a vaccum and even disastrous results, have however, sought to support the order of [ENTITY], J. We are amazed and pained at this somewhat astonishing attitude of respondents 2 to 4. At the closing stages of the arguments Sri [ENTITY] producing a copy of the letter written by the Registrar in No. CRD/69/ KMC/84-85 dated 17-9-[SECTION]85 in which referring to the decision of this Court in the above cases he had stated that the [ACT] had ceased to exist from 9-1-[SECTION]84 even urged for affirming the view expressed by [ENTITY]. J. Added to this attitude or to crown the same, the State had chosen not to file its detailed return in these cases except in Writ Petition No. 11694 of [SECTION]79 which is as vague as it could be on the constitutionality of the provisions and had allowed these cases to drift for all these years. We need hardly say that these can hardly be relevant in deciding the issues that arise in the appeal and other Writ Petitions in their proper perspective.
15. Prior to or as on 18-6-[SECTION]84, the [ENTITY] of Coondapur, Holalkere and K.R. Nagar were manned by [ENTITY], [ENTITY] and [ENTITY] as their Secretaries respectively. In Order No. [ACT]/EST/TR. 8399-8410/84-85 dated 18-6-[SECTION]84 (Annexure-C) the [ACT] effected their transfers which we have earlier re-produced in its entirety. We have also noticed the developments that ensued in the three [ENTITY].
16. In his writ petition presented on 15-10-84 respondent-1 inter alia urged that the order of transfer made by the [ACT] was without jurisdiction. On an examination of this contention, the Learned Judge after setting out [SECTION] as originally enacted and as substituted by the [SECTION]81 Act has expressed thus :-
By the effect of the substitution of the above Section to the old [SECTION] the common cadre authority ceased to exist with effect from 9-1-[SECTION]84, the date on which new [SECTION] came into force. No federal society to discharge the functions similar to those entrusted to the common cadre authority has yet been constituted by the Registrar. Therefore, the position emerging from the substitution of new [SECTION] was that there was no authority which could transfer employees from one PLD Bank to another PLD Bank. The orders of transfer made in respect of each of the petitioners was made by the common cadre authority long after 9-1-[SECTION]84 though by that time the authority had ceased to exist. Therefore, the orders of transfer effected in the name of the common cadre authority are non-est. Therefore., the PLD Banks at which the petitioners were working could not have relieved the petitioners pursuant to an order purported to have been made by the common cadre authority. Hence, they are entitled to continue in the service of the four PLD Banks in which they were working prior to their transfer and to get all consequential benefits."
On this view, the Learned Judge has declared the order of transfer made by the [ACT] on 18-6-[SECTION]34 as null and void and has issued the following directions :
"(ii) A consequential direction shall issue :
xxx xxx xxx xxx
(ii) to the PLD Bank, Coondapur, D. K. District to continue the petitioner in W.P. 16346 of [SECTION]84 in its service on the same pay scale which he held prior to the date of relief and to give the arrears of salary from the date of relief till the date on which he is taken on duty and shall also treat the intervening period as duty for all purposes and give him all consequential benefits in accordance with law."
In order to determine whether this view is correct or not, it is necessary to read [SECTION] as originally enacted and as substituted in [SECTION]84 and ascertain their true scope and ambit also.
10. [SECTION] as originally enacted by the [SECTION]75 and [SECTION]76 Acts reads thus :
"Insertion of new [SECTION] After [SECTION] of the principal Act, the following section shall be inserted, namely:
128A-[ACT] of Authority for recruitment training etc. of employees of co-operative societies
(1) The State Government may constitute an authority or authorities, in such manner as may be prescribed, for the recruitment, training and disciplinary control of the prescribed classes of employees of the prescribed co-operative societies to which the State Government has given financial aid by way of subscription to its share capital or otherwise and may require such authority or authorities to frame regulations regarding recruitment, emoluments, terms and conditions of service, including disciplinary control of such employees.
(2) The regulations framed under Sub-section (1) shall be subject to the previous approval of the State Government and shall after such approval be published by notification in the official gazette and shall save as otherwise provided therein take effect from the date of such publication."
"Amendment of [SECTION] In [SECTION] of the principal Act, after Sub-section (2), the following sub-section shall be added, namely :
(3) Notwithstanding anything contained in this Act, rules or the bye-laws of any co-operative society, the State Government may give direction to such Co-operative Society or class of Co-operative Societies to which the State aid has been given or to any authority competent to recruit or appoint any employee in any such Co-operative Society, to make provision for reservation of posts to such extent as may be specified in the said direction, in favour of the Scheduled Castes, the Scheduled Tribes and the other Backward Classes. The Co-operative Society or the appointing authority shall be bound to comply with such directions an I give effect to such directions."
This section empowered Government to constitute [ACT]s for one or the other class of societies which were in receipt of financial aid from Government. We have earlier noticed that Government framed Rules and constituted [ACT] for [ENTITY] from 24-8-[SECTION]78. The Regulations framed by the [ACT] which were even given retrospective effect from 1-10-[SECTION]78 empowered it to transfer officials from one Bank" to another (vide : [SECTION]).
11. On 9-1-[SECTION]84 the Governor of Karnataka promulgated the Karnataka Co-operative Societies (Amendment) Ordinance of [SECTION]84 (Karnataka Ordinance No. 2 of [SECTION]84) ('Ordinance') which came into force from that day making various amendments to the Act. [SECTION] of the Ordinance substituted [SECTION] with a new provision which reads thus :
"Substitution of [SECTION] For [SECTION] of the principal Act, the following shall be substituted namely :
128A. [ACT] of a common cadre : (1) Notwithstanding anything contained in this Act, the rules or the bye-laws where the Registrar, in the interest of co-operative movement, considers that the creation of a common cadre of employees for any class of co-operative societies is necessary, he shall authorise 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 currying out the said purpose. Where such federalisociety is so authorised by the Registrar, the affiliated cooperative 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 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 ah award under [SECTION]."
The Karnataka Co-operative Societies (Amendment) Act of [SECTION]34 (Karnataka Act 5 of [SECTION]84) ('[SECTION]84 Act') replaced the ordinance giving it retrospective effect from 9-1-[SECTION]84. [SECTION] of the [SECTION]84 Act, re-enacted [SECTION] substituted by [SECTION] of the Ordinance without any modification. [SECTION] of the [SECTION]84 Act provided for repeal of the ordinance and savings of the actions taken thereunder.
16. [SECTION], replaced by the Ordinance and re-enacted by the [SECTION]84 Act transferred the power of constituting [ACT]s for any class of co-operative societies to the Registrar of Co-operative Societies on being satisfied with the necessity for the same subject to the limitations and conditions placed therein. This Section empowers the Registrar to authorise the federal society to act as a [ACT] in respect of those societies that are affiliated to such a federal society. On and after 9-1-[SECTION]84 to date the Registrar had not exercised the powers conferred on him by this new provision, was not disputed before us by any of the parties.
17. We do not find from these provisions or any other provision of the ordinance or the [SECTION]84 Act that the [ACT] constituted and functioning as on 9-1-[SECTION]84 ceased to exist from that day as held by the learned Judge. At any rate the plain language of [SECTION] replaced by the ordinance and the [SECTION]84 Act had not brought about that result. The new Section by itself, does not abolish the old authority created and functioning then or establish a new authority in its place from the date and time of the said substitution. With respect to the Learned Judge, we are unable to discern any such consequence from the language of [SECTION] earlier or later enacted. We have carefully examined every one of the provisions of the Ordinance and the [SECTION]84 Act also and they do not lend themselves to any such conclusion as reached by the Learned Judge. Even otherwise, a mere substitution of an earlier provision by another provision from the very date of its substitution, without anything more, does not result in such a situation under any other statute law or common law. For all these reasons, we cannot but hold that the conclusion reached by the Learned Judge, with respect is not sound and correct. We cannot, therefore, subscribe to the views expressed by the Learned Judge.
18. We have earlier held that the [ACT] constituted by Government had not ceased to exist and a new [ACT] had not been constituted by the Registrar under the new provision. Unfortunately the Ordinance and the [SECTION]84 Act do not make specific provision to regulate the situation. As to how then the situation should be regulated, we must turn to the Rules of Construction incorporated in the [ACT] corresponding to the [ACT]) both of them modelled on the interpretation Act in force in the United Kingdom to which the attention of the Learned Judge somewhat regretfully was not drawn by the parties.
[SECTION]. We are of the view that the situation arising by the substitution, without making specific provision should be examined and decided with reference to the Rules of Construction incorporated in [SECTION] of the [ACT] which reads thus :
"24. Continuation of orders, etc. issued under enactments repealed and re-enacted Where any enactment is, after the commencement of this Act, repealed and re-enacted with or without modification, then, unless it is otherwise expressly provided. any appointment, notification, order, scheme, rule, form or bye-law, made or issued under the repealed enactment, shall, so far as it is not inconsistent with the provisions re-enacted, continue in force and be deemed to have been made or issued under the provisions so re-enacted, unless and until it is superseded by any appointment, notification, order, scheme, rule form or, bye-law made or issued under the provisions so re-enacted."
In cases of repeals and re-enactments with or without modifications, unless the intention otherwise requires, the rule of construction incorporated in this Section declares or provides that what had been done earlier under the repealed provision shall be deemed to be done and continued under the newly enacted provision. The object and purpose of this Section is to preserve continuity and eliminate vacuums and chaos in the administration of laws. In more than one case the Supreme Court has expressed the same view (view : [PRECEDENT], and Neel @ Niranjan Majumdar v. The State of West Bengal, AIR [SECTION]71 SC 2066 @ 2068). [SECTION] enacted by the ordinance and the [SECTION]84 Act, does not manifest an intention for not invoking and applying the Rule of construction incorporated in [SECTION] of the [ACT]. From this it follows that the [ACT] constituted or established by Government on 24-8-[SECTION]78 legally and validly continued to function on and after 9-1-[SECTION]84 as if constituted or established under the new [SECTION] of the Act and can exercise all the powers and functions entrusted to it till such time a new body is established by the Registrar.
20. What is true of the [ACT] established under the previous provision or the reasons on which we have held that that authority can exercise its powers, apply with greather force to hold that [SECTION] and [SECTION] and the Regulations framed by the [ACT] continue to be in force till they are amended, modified or repealed.
21. On the foregoing discussion, it is clear that the order of transfer made by the [ACT] on 18-6-[SECTION]84 was a legal and valid order and it was competent to enforce the same. From this it follows that the order under appeal cannot be upheld.
22. On the conclusions reached by us, it follows that the [ACT] is free to enforce its order of transfer in accordance with the regulations. We are of the view that respondent-1 petitioner is only entitled for such a declaration and not for any other relief in his Writ Petition.
23. While the petitioners in Writ Petitions Nos. 11694, [SECTION]803 of [SECTION]79 and 21034 of [SECTION]81 have challenged [SECTION] itself as beyond the legislative competence, the petitioners in Writ Petitions No. 3598, 11694 of [SECTION]81, 13336 and 30711 of [SECTION]81 have challenged [SECTION] of the Act only on that very ground. According to the petitioners the [ENTITY] were banks and all their activities can exclusively be legislated by the Union Parliament under [SECTION] read with [SECTION] and not by the State Legislature. Sri [ENTITY] made a valiant effort before us to uphold this contention of the petitioners.
25. Admittedly the [ENTITY] owe their existence to [SECTION] of the Act and not to any legislation enacted by the Union Parliament. When this is so, this stand of the petitioners, to say the least, is self distructive. But, notwithstanding the same, we are bound to examine the merits which we now proceed to do.
26. Sri [ENTITY] has laid great stress on [SECTION]' of the Banking Regulations Act of [SECTION]49 (Central Act No. 10 or [SECTION]49) ([SECTION]49 Act) which exempted Land Mortgage Banks that were established by the original Act and not the PLD or [ENTITY].
27. Sri [ENTITY] is right in maintaining that the [SECTION]49 Act exempted from its operation Mortgage Banks and not PLD or [ENTITY]. But, that hardly makes any difference to decide on the true nature of the [ENTITY] or the legislative competence of the State Legislature. Even otherwise, on the rules of construction incorporated in Sections of the [ACT], we must read the term 'mortgage Banks' referred to in [SECTION] of the [SECTION]49 Act as [ENTITY] of the Act.
28. The [ENTITY] established under [SECTION] of the Act are not banks within the meaning of that term as denned in the ordinary dictionaries, Law Lexicons or the [SECTION]49 Act. The [ENTITY] with the appellation of banks at their end are not banks or banking institutions. Both in form and substance they are only co-operative societies and not banks.
29. When once [ENTITY] are found to be co-operative societies it follows that the State Legislature under [SECTION] read with [SECTION] was competent to enact [SECTION] of the Act. We are of the view that this question is concluded by the ruling of the Supreme Court in [PRECEDENT]., and the Full Bench ruling of this Court in Puttappa H. v. State of Karnataka and Ors., [SECTION]78(1) KLJ 302.
30. We are also of the view that the High Courts of Panjab and Bombay in [PRECEDENT]., and [PRECEDENT]., on the very question have correctly laid down the principles and we are in respectful agreement with the views expressed by their Lordships in these cases on the question of legislative competence. On the ratio of these rulings also, this contention of the petitioners is liable to be rejected.
31. On the foregoing discussion, we hold that there is no merit in this contention of the petitioners and we reject the same.
32. The Petitioners have urged that [SECTION] was violative of [SECTION] of the [ACT]. Learned Counsel for the petitioners have contended that [SECTION] suffers from the vice of impermissible classification, was arbitrary, irrational and was violative of [SECTION] of the [ACT].
33. The true scope and ambit of [SECTION] has been explained by the Supreme Court in a large number of cases. In [PRECEDENT]., and The Special Courts Bill, [SECTION]78, the Supreme Court has reviewed all the earlier cases till then decided and re-stated the scope and ambit of [SECTION] of the [ACT]. In E. P. [ENTITY] v. State of Tamil Nadu and Anr., ; Smt. [ENTITY] v. Union of India and Ors., and other cases that followed, the Court has also explained the new dimension of [SECTION] of the [ACT]. Bearing the principles enunciated in these cases, it is necessary to examine the challenge based on [SECTION] of the [ACT], however, briefly noticing the structure and the purposes of [ENTITY] in the first instance.
34. Whatever be the origin and establishment of Land Mortgage Banks under the Act as originally enacted or the corresponding laws in the several areas of the State on and from 26-6-[SECTION]65 from which day the Amendments made by Act No. 4 of [SECTION]64 came into force, [ENTITY] are really established for each revenue Taluk by statute and not under the statute (vide [SECTION] of the Act). On and from 26-6-[SECTION]65 the formation and establishment of an ARD Bank has very much ceased to be a voluntary organisation as in the case of ordinary co-operative societies established under [SECTION] of the Act. The object and purposes of establishing [ENTITY] in each revenue taluk, with an apex bank thereto was to help the agriculturists with long term loans to discharge prior mortgages, improvement of lands, purchase of tractors and other sophisticated machinery, permanent improvement of lands and others (vide : [SECTION] of the Act). The apex bank which is at the helm of [ENTITY] is empowered to issue debentures naturally to finance the [ENTITY] subject to the terms and conditions set out in the Act. The debentures when issued are guaranteed by the State Government (vide : [SECTION] of the Act). Almost all finances of [ENTITY] utilised for lending to agriculturists through [ENTITY] are State finance funded through one or the other programme evolved either by the Union Government or the State Government. The State Government has immense stakes in the finances and proper functioning of the Apex Bank and [ENTITY] in the State. The Act makes special provisions for the recoveries of amounts advanced by [ENTITY]. [ENTITY] are treated as belonging to a special and distinct class.
35. The Societies that are in receipt of financial aid form a well defined separate group. The classification of such societies is based on real and substantial grounds. The object of conferring power to form a [ACT] for such societies has a rational nexus with the object of the legislation or the Act or the co-operation movement. We are of the view that the impugned provision satisfies the twin requirements, of a valid classification explained by the Supreme Court in, the Special Courts Bill's case, .
36. An examination of the impugned provision shows that it does not confer arbitrary unguided and uncanalised power on Government or the [ACT] to suffer from the vice of excessive delegation. Apart from this we do not find anything arbitrary in the provision to attract the new dimension of [SECTION] of the [ACT] evolved in [ENTITY]'s case, and elaborated in [ENTITY]'s case.
37. On the foregoing discussion, we have no hesitation in holding that the impugned provision is not violative of [SECTION] of the [ACT].
38. The petitioners have challenged [SECTION] as violative of [SECTION] of the [ACT]. But, at the hearing, the petitioners confined their challenge, only to [SECTION] of the [ACT].
39. According to the petitioners [SECTION] compelling them or their employees, in particular, who are also petitioners to change their masters without their consent, interferes with their freedom to practise or carry on their occupation or profession guaranteed to them by [SECTION] of the [ACT] and the restrictions on such freedom are not saved by [SECTION] of the [ACT].
40. The true scope and ambit of [SECTION] and the tests to be applied in examining challenges based on [SECTION] of the [ACT] have been authoritatively explained by the Supreme Court in a large number of cases. In The [PRECEDENT], one of the earliest cases, considered to be classic, a [ACT] Bench of the Supreme Court speaking through [ENTITY], CJ, has explained the true scope and ambit of [SECTION]. In [PRECEDENT]., and [PRECEDENT]., the Supreme Court has summarised and re-stated the scope and ambit of [SECTION] of the [ACT]. Bearing the principles stated in these and other cases, we must examine the challenge of the petitioners based on [SECTION] of the [ACT].
41. The petitioner in Writ Petition No. 3598 of [SECTION]78 is the PLD Bank, Badami. The PLD Bank which is a juristic person and not a natural person cannot invoke [SECTION] of the [ACT] is well settled.
42. But, the petitioners in all other Writ Petitions who are individuals can undoubtedly invoke [SECTION] of the [ACT]. We, therefore, propose to examine the challenge of the petitioner in Writ Petition No. 3579 of [SECTION]79 also along with the other petitioners.
43. The challenges of the petitioners based on [SECTION] that it interferes with their right to form associations or unions and their right to hold, acquire and dispose of property which clause itself has been deleted by the 46th Amendment of the [ACT], which were not also rightly pursued at the hearing, have only to be stated to be rejected. We see no merit in this challenge of the petitioners and we reject the same.
44. [ENTITY], [ENTITY] and [ENTITY] have urged that [SECTION] empowering Government and [ACT] to effect transfers and thus destory the relationship of master and servant without their consent, unreasonably interferes with their freedom to practise their profession, occupation, trade or business guaranteed by [SECTION] of the [ACT] and the restrictions, if any, were not saved by [SECTION] of the [ACT]. Learned Counsel for the petitioners have placed strong reliance on the ruling of the Supreme Court in , State of Mysore v. [ENTITY] which affirmed a Division Bench ruling of this Court in [ENTITY] v. State of Mysore, [SECTION]68(2) Mys.L.J. 479.
45. We were told at the hearing that an expert committee constituted by Government and the employees union of the [ENTITY], had urged Government for the creation of [ACT] on matters of recruitment, pay scales and conditions of service of all the employees of the Banks and accepting those recommendations Government brought forward the proposal that ultimately became [SECTION] of the Act.
46. [SECTION], the creation of [ACT] thereunder or the powers exercised by that authority in conformity with the common regulations made thereunder do not in any way affect or contravene the rights of the petitioners, if any to practise their profession, trade or business, if any guaranteed to them under [SECTION] of the [ACT]. So also the right of the petitioners to continue to serve in one or the other bank is not interfered with by [SECTION] or the Regulations made thereunder. On the other hand the creation of the [ACT] with uniform scales of pay, conditions of service as are extended to Government servants of the State had really advanced the prospects of employees of the Banks. The [ACT] with the Registrar as the Chairman and other representatives, is undoubtedly a better and superior organisation to regulate recruitments conditions of service and the disciplinary control of all the employees who are all similarly placed to serve the objectives of the banks that are also common.
47. A transfer is only an incident of service and is not even a condition of service. If the provisions empowering the creation of [ACT] is valid, then it necessarily follows that authority which becomes the appointing authority in the place of original appointing authority of the banks must have power to transfer its employees from one bank to another bank. We cannot on any principle hold that the same contravenes [SECTION] of the [ACT].
48. [SECTION] empowering the creation of [ACT] and in the interests, of the great majority of employees who were clamouring for the creation of such an authority. At the highest the restriction if any, placed by [SECTION] is a reasonable restriction saved by [SECTION] of the [ACT].
49. 'In [ENTITY]'s case, State of Mysore v. [ENTITY] the Supreme Court and this Court were Considering whether it was open to the Karnataka Legislature to compulsorily transfer a civil servant of the State to the Agricultural University established under an Act called [ACT] and thus destroy the status of a civil servant without his consent retaining several others in the very cadre to which [ENTITY] had been appointed. On those facts this (Court struck down the relevant provision of that Act as beyond the legislative competence of the State and as violative of [SECTION] of the [ACT], with which the Supreme Court on appeal concurred and dismissed the appeal filed by the State. But, that is not the position in the present case. The status of the employees of the banks is not in any way interfered with as in [ENTITY]'s case., State of Mysore v. [ENTITY] Hence, the ratio in [ENTITY]'s case, State of Mysore v. [ENTITY], does not bear on the point and assist the petitioners.
50. On the foregoing discussion, we hold that the challenge of the petitioners to [SECTION] based on [SECTION] of the [ACT] is devoid of merit and we reject the same.
51. The petitioner in Writ Petition No. 7666 of [SECTION]83 has urged that [SECTION] and the Regulations compels him to do 'forced labour' in contravention of [SECTION] of the [ACT]. Sri [ENTITY] in support of this contention of the petitioner, strongly relied on a Division Bench ruling of the Kerala High Court in [ENTITY] v. Muthukoya Thangal, .
53. Admittedly the petitioner had joined service of an ARD Bank at his own free will. When this is so, the assumption of the petitioner that he is compelled to do 'forced labour' on transfer is misconceived. When there is transfer the employer only calls upon him to do service at the place of his choice. An employee cannot compel an employer to provide him a job at the place of his choice. After all periodical transfers has always been considered to be in the public interest. When that is so, it is difficult to hold that [SECTION] and the Regulations contravene [SECTION] of the [ACT]. We are of the view that the ratio in [ENTITY]'s case, does not really bear on the point and assist Sri [ENTITY].
54. In these Petitions the petitioners have not challenged the validity of [SECTION] substituted by the ordinance and re-enacted by the [SECTION]84 Act. We must, therefore, presume that provision to be a valid provision, Assuming that petitioners had challenged its validity, then the same had to be held as valid for the very reasons on which we have upheld [SECTION] as valid.
55. The petitioners have also challenged the validity of [SECTION], [SECTION] as ultra vires of the Act and also on the very grounds on which they had challenged the vires of [SECTION] of the Act
56. [SECTION] and [SECTION] have been framed by Government to carry out the purposes of [SECTION] which empowered Government to frame Rules. [SECTION] and [SECTION] have been framed in conformity with the rule maknig powers conferred on Government. Both these rules are intra vires of the Act and are not violative of [SECTION] and [SECTION] of the [ACT]. We see no merit in any of the challenges to these rules and we reject them.
57. The petitioner in Writ Petition No. 7666 of [SECTION]83 had challenged the regulations framed by the [ACT] with the prior approval of Government without setting out any specific ground in support of the same. On this short ground itself this challenge is liable to be rejected.
58. But, at the hearing Sri [ENTITY] mounted a vehement attack on [SECTION] conferring power of transfer on the [ACT] which reads thus :
"35. Transfer : The member-Secretary shall be competent to transfer all categories of employees of the [ACT] anywhere in the State."
We have earlier upheld the validity of [SECTION] of the Act as also [SECTION] and [SECTION] of the Rules.
59. [SECTION] of the Act confers power on the [ACT] to frame regulations regulating the recruitment conditions of service and disciplinary control with the previous approval of Government. The Regulations have been framed by the competent authority with the previous approval of Government giving them retrospective effect from 1-10-[SECTION]78 as authorised by the provision. The regulations and the uniform conditions of service, therefore, operate from 1-10-[SECTION]78. [SECTION] empowering the [ACT] to transfer is really an emanation of what is contained in [SECTION] and cannot be invalidated on any ground. We see no merit in this, challenge of the petitioner to the regulations and we reject the same.
60. With the rejection of the challenge of the petitioner to [SECTION], [SECTION], [SECTION] and the Regulations, their challenge to the orders of Government dated 24-8-[SECTION]48 constituting the [ACT] for [ENTITY] is liable to berejected.
61. As we have upheld the validity of [SECTION], [SECTION], [SECTION] and the Regulations, it is now necessary to examine the validity of the respective orders challenged by them separately, which we now proceed to do.
62. WRIT PETITION No. 3598 of [SECTION]79 : The petitioner has challenged Letter No. [ACT] 384/78-79 dated 8-2-[SECTION]79 (Annexure-B) written by the Member-secretary of the [ACT] in which he has pointed out that any appointment made by the Bank on and after 1-10-[SECTION]78 from which day the regulations came into force are invalid. We are of the view that this letter or order is in conformity with [SECTION] of the Act and the Regulations and connot be invalidated on any ground. We, therefore, reject the challenge of the petitioner to the impugned letter (Annexure-B).
63-1. WRIT PETITION No. 11694 OF [SECTION]79 : The Petitioner had challenged [CASE NUMBER] dated 24-8-[SECTION]78 (Annexure B) made by Government under [SECTION] read with [SECTION] constituting a [ACT] for [ENTITY] and order No. [ACT]/EST/SECY/4312/78-79 dated 28-5-[SECTION]79. Annexure-C) made by the Member-Secretary transferring him from ARD Bank, Harapanahalli, Bellary District to ARD Bank, Mudigere, Chickmagalur District.
63-2. As we upheld the validity of [SECTION] and [SECTION] of the Rules, it necessarily follows that the order made by Government on 24-8-[SECTION]78 (Annexure-B) constituting a [ACT] is legal and valid and the challenge of the petitioner to the same is, therefore, liable to be rejected. As regards the order of transfer, that also requires to be upheld for the very reasons on which we have upheld the order of transfer challenged in W. A. No. 1211 of [SECTION]85. But, in their common return, Respondents I and 2 have stated that Government has directed the [ACT] to retain the petitioner at Harapanahalli itself. We do not find any power conferred on Government to interfere with the powers of the [ACT]. But, assuming that the [ACT] had obeyed the same and had cancelled its order to transfer dated 28-5-[SECTION]79 (Annexure-C) then there is no justification for us to interfere with the same. On any view of the matter, the challenge of the petitioner to the order of transfer made by the [ACT] is liable to be rejected.
64. WRIT PETITION NO. [SECTION]803 OF [SECTION]79 : The petitioner has challenged a circular dated 24-4-[SECTION]79 (Annexure-B) addressed by the Member-Secretary of the [ACT] calling upon it to furnish certain information. Whether the petitioner should comply with the same or not, which does not appear to suffer from any invalidity, is a matter for it to examine and decide. But, there is hardly any ground on which we can invalidate the same. We, therefore, reject the challenge of the petitioner to the impugned circular.
65-1. WRIT PETITION NO. 13336 OF [SECTION]81 : The petitioners have challenged two orders, the first an order made by the Registrar on 16-1-[SECTION]81 (Annexure C) giving certain directions in the matter of appointments and the second order made by the bank on 7-4-[SECTION]81 (Annexure-F) re-appointing one of them as a Clerk on temporary basis.
65-2. In the order dated 6-1-[SECTION]81 the Registrar who is also the Chairman of the [ACT] has directed the Bank to stop making irregular appointments. We are of the view that the petitioners have no locus standi to challenge this order of the Registrar. Even if it is held that the petitioners have locus standi to challenge then there is hardly any ground on which the same can be invalidated by us.
65-3. The second one is an order made by the Bank which is not a 'State' within the meaning of [SECTION] of the [ACT]. An order made by a Bank which is not a 'State' cannot be challenged in a proceeding under [SECTION] of the [ACT], on which ground itself we should reject the challenge of the petitioners to the said order. Even otherwise this order which is in favour of petitioner No. 2 has spent itself which also justifies us to reject their challenge to the same.
65-4. On the foregoing discussion, we reject the challenge of the petitioners to the impugned orders.
66. WRIT PETITION NO. 21034 OF [SECTION]81 : The petitioner has challenged show cause notice No. EST/81-82/359 dated 23-9-[SECTION]81 (Annexure F) issued by the President of the Society. For the very reasons stated by us at para-65-3, against W.P. No. 13336 of [SECTION]81 we must reject this challenge of the petitioner. Even otherwise, there is no justification for us to interfere with a show cause notice. We, therefore, reject the challenge of the petitioner to the impugned show cause notice.
67. WRIT PETITION NO. 30711 OF [SECTION]81 : The petitioner has challenged a final notice issued by the [ACT] on 28-4-[SECTION]85. On the very terms of the notice, it is open to the petitioner to urge all such objections as are available to him except those that are concluded by our order which the authority is bound to examine and decide. But, at this stage we do not see any justification to interfere with the final notice issued by the [ACT].
68. WRIT PETITION NO. 7666 OF [SECTION]83 : The petitioner has challenged an order of transfer made by the [ACT] on 25-1-[SECTION]83 (Annexure-J). We have rejected the challenge of the petitioner to [SECTION] and the regulations. In W.A. No. 1211 of [SECTION]85 we have upheld a similar order of transfer made by the [ACT], For the very reasons stated therein, the challenge of the petitioner to the impugned order made by the [ACT] is liable to be rejected.
69. We now sum up our conclusions :
(i) [SECTION] of the Act is within the legislative competence of the State of Karnataka and is not violative of [SECTION] and [SECTION] of the [ACT] and is valid;
(ii) [SECTION], [SECTION] are intra-vires of the Act and are valid;
(iii) The Regulations framed by the [ACT] with the prior approval of Government giving them retrospective effect from 1-10-[SECTION]78 are valid;
(iv) The [ACT] constituted by Government in its [CASE NUMBER] dated 24-8-[SECTION]78 (Annexure-B) in Writ Petition No. 11694 of [SECTION]79) for [ENTITY] continues to be in force and should be deemed to be created under [SECTION] replaced by the ordinance and re-enacted by the [SECTION]84 Act till a fresh [ACT] is constituted by the Registrar in its place under the later provision;
(v) The [ACT] constituted by Government in its order dated 24-8-[SECTION]78 which is in legal existence eversince then without any break thereafter can exercise all the powers conferred on it by law till such time another authority is constituted by the Registrar in accordance with law ;
(vi) The [ACT] is competent to enforce the conditions of service of the employees of [ENTITY] in conformity with the Act, Rules and Regulations on and from 1-10-[SECTION]78: and
(vii) The [ACT] is competent to make transfers of employees of [ENTITY] and enforce them against those [ENTITY] that refuse to obey them in conformity with the Act, Rules and Regulations.
70. In the light of our above discussion, we make the following orders and directions :
(i) We dismiss all the Writ Petitions. But,we grant one month's time from this day to the petitioner in W.P. No. 30711 of [SECTION]81 to show cause to the final notice dated 28-4-[SECTION]81, after which time the [ACT] is free to decide the same in accordance with law.
(ii) With the dismissal of the Write Petitions the earlier interrim orders made in all these cases stand terminated from this day and, therefore, it is open to the [ACT] to enforce its orders.
(iii) We allow Writ Appeal No. 1211 of [SECTION]85, set aside the order of [ENTITY], J. in Writ Petition No. 16346 of [SECTION]84 filed by respondent No. 1 and dismiss the same. But, this order does not prevent the [ACT] from enforcing the order of transfer made by it on 18-6-[SECTION]84 in accordance with law or make further orders also in accordance with law.
71. Writ Petitions and Writ appeal are disposed of in the above terms. But, in the circumstances of the cases, we direct the parties to bear their own costs.