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PETITIONER: BOARD  OF DIRECTORS OF ANDHRA PRADESH  CO-OPERATIVE  CENTRAL

       Vs.

RESPONDENT: CHITTOR PRIMARY CO-OPERATIVE LAND MORTGAGEBANK LTD.  ETC.

DATE OF JUDGMENT21/02/1974

BENCH: REDDY, P. JAGANMOHAN BENCH: REDDY, P. JAGANMOHAN DWIVEDI, S.N. GOSWAMI, P.K.

CITATION:  1974 AIR 1692            1974 SCR  (3) 440  1974 SCC  (1) 608

ACT: Andhra Pradesh Cooperative Societies Act, 1964, Sections 84, 85,  93  94, 97, 100-109, 115, 116A and  130-Andhra  Pradesh Cooperative  Societies  Rules, Rule 70(1)(13)  and  (14)-Act conferring supervisory powers on Central Land Mortgage  Bank over  Cooperative Land Mortgage Banks in the State-Rule  em- powering  Board of Central Bank to constitute a  centralised service for the mortgage banks and to levy contribution from them  for  the  purpose.--Rule 70  whether  ultra  vires  of section 115 of the Act.

HEADNOTE: The Andhra Pradesh Cooperative Societies Act, 1974 created a Central  Land Mortgage Bank to supervise the functioning  of the  Cooperative  Land  Mortgage Banks in  the  State.   The scheme  of the Act is that the provisions of  ’Chapter  XIII thereof  relating  to  advancement  of  loans  and  mode  of recovery   of  the  amounts  are  made  applicable  to   the Cooperative.   Land  Mortgage Banks in the State.   Sec.  85 permits  a  mortgage bank to advance loans for  the  purpose specified therein and to hold lands, the possession of which is  transferred  to  it.  By virtue  of  the  provisions  of section  100-109  any  loan  granted  by  a  mortgage   bank including any interest chargeable thereon and costs, if any, incurred  in  connection therewith shall, when  they  become due.  be  recoverable by the mortgage bank.  All  powers  in respect  of  the  recovery of loans  are  conferred  on  the mortgage-banks.    The  Collector  is  empowered   to   make recoveries  during  a certain period; he is also  given  the power  of distraint and sale.  When the power of sale is  to ;be  exercised,  the  powers  of  the  mortgage  bank  where mortgaged   property,  is  destroyed  or  security   becomes insufficient, the power of the Board of Trustees to distrain and  sell property are also provided for.  The title of  the purchaser  is  not  to  be  questioned  on  the  ground   of irregularity  nor  can  a  mortgage  be  questioned  on  the insolvency of the mortgagor. Appointment  of a Receiver and his powers are  provided  for Sections  93 and 94 empower a mortgage bank or the  ,Central Mortgage Bank notwithstanding anything contained in any  law for  the  time  being in force  to  purchase  any  mortgaged

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property sold under Chapter XIII of the Act and the property so  purchased  shall be disposed of by such  banks  by  sale within such period as may be fixed.  Sec. 95 provides,  that payment  of all monies due to mortgage hanks are payable  to it  and such payments shall be valid as if the mortgage  had not  been so transferred.  The mortgage bank shall,  in  the absence of any specific direction to the contrary, issued by the Board of Trustee Ind communicated to the mortgage  bank, be  entitled  to  sue  on the mortgage  or  take  any  other proceeding  for  the recovery of the moneys  due  under  the mortgage.  Sec. 115 provides that subject to the  provisions of  the Act the Board shall have such power  of  supervision over the mortgage banks including the power of  appointment, transfer and disciplinary action in respect of the employees of mortgage banks as may be prescribed. ]By section 130, the Government  is empowered to make rules for carrying out  all or any of the purposes of the Act.  Sec. 116-A empowers  the Registrar of Cooperative Societies to create a common  cadre of  employees  in  any class of cooperative  society  if  he considers  it necessary in the interest of  the  cooperative movement to do so. Sub-Rule  (1) of Rule 70 empowers the Board of Directors  of the  Central Land Mortgage Bank to constitute a  centralised service for the mortgage banks in the State and with  effect from  such constitution the Board shall have power  to  make appointments  to  the posts brought  under  the  centralised service and the 441 mortgage  banks shall have no power to make appointments  to such  posts.   Sub-Rule  (13) empowers  the  Board  to  levy contributions  from the mortgage banks towards the  cost  of service  rendered  by the Central Mortgage  Rank.   Sub-rule (14)  provides that once a centralised cadre is  constituted all  rights and privileges accrued and liabilities  incurred by  the employee in relation to his service in the  mortgage bank shall stand vested with the Board. In  three  writ  petitions filed before the  High  Court  by employees  of different Cooperative Land Mortgage Banks  and by one of the banks, it was contended, inter- alia, that  r. 70 was ultra vires of sec. 130(1) read with sec. 115 of  the Act.   The High Court upheld the contention and allowed  the writ  petitions.  On appeals by special leave to this  Court the  only  question for consideration was whether  the  High Court  was  right in declaring Rule 70 of the  Rules  to  be ultra vires of Sec. 115 of the Act. Dismissing the appeals, HELD  : (1) There is nothing in the Act which  empowers  the Central’  Mortgage  Bank notwithstanding the  fact  that  it provides funds to the mortgage banks, to make collection  of such advances by the mortgage banks.  The rule making  Power conferred  on the Government for carrying out all or any  of the  purposes  of the Act must be confined to  such  of  the purposes as are, enumerated or indicated in the preamble  or in  any of the provisions of the Act.  Under Sec.  115,  the Central  Mortgage  Bank does not have the  power  either  to directly collect the loans and advances given by the  member banks,  viz.,  mortgage banks, or to  create  a  centralised cadre  of service from among the employees of  the  mortgage banks which are members of the Central Mortgage bank.   That section merely confers power of supervision on the Board  of the  Central  Mortgage Bank over the  mortgage  banks  which power  includes  the  power  of  appointment,  transfer  and disciplinary  action  in  respect of the  employees  of  the mortgage banks.  It may be that some questions ay be  raised in  respect  of  the actions of the mortgage  banks  in  the

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matter of appointment, transfer and disciplinary actions  of its  employees.   Whenever such questions  are  raised,  the Board  of Directors of the Central Mortage Bank in  exercise of its power of supervision can go into the question of such appointments,  "transfers  and disciplinary action  made  or taken  by the mortgage banks.  The power conferred  by  Sec. 115,  therefore,  can in no circumstances  be  construed  as empowering  the Board of Directors of the  Central  Mortgage Bank to recruit employees for the mortgage banks or to  make appointments to a common cadre created by it from out of the employees of the member mortage Banks.  If the employees one appointed  by the Central Mortgage Bank, their salaries  and other emoluments should be paid by it.  But evidently,  this is not so as sub-rules (13) and (14) or r. 70 authorise  the Central Mortgage Bank to call for contribution for the  cost of  the service rendered by it to be borne by  the  mortgage banks  and  provides  that once  a  centralised  service  is constituted   all   rights  and   privileges   accrued   and liabilities  incurred  by ,he employee in  relation  to  his service  in  the mortgage bank shall stand vested  with  the Board.   The key words in section 115 are "employees of  the mortgage  banks".   The power of supervision  including  the power  of appointment, transfer and punitive action, may  be taken  by the Central Mortgage Bank against presons who  are the  employees of the mortgage bank.  But rule 70  seeks  to bring into being a centralised service, the employees  where of’  shall be the, eniployees of the Central  Mortgage  Bank and  not of the mortgage banks.  Such a centralised  service is not contemplated by Sec. 115. [445 E-446 E] (II) The  supervisory power in respect of the  employees  of the  mortgage batiks does not include the power of  transfer of  employee  from  one mortgage bank  to  another  creating thereby  a  contract of service with a  different  employer. The word "transfer" in Sec. 115, therefore, must be read  as a transfer from one branch  of  the same  mortgage  bank  to another of its branch. [446 F-G] (III)     While  the Central Mortgage Bank may be  concerned with  securing  its  loans  tot  the  mortgage  banks,   the provisions  of  the  Act  do not  confer  upon  the  Central Mortgage Bank the power to collect any loans advanced by 442 the  member  banks, i.e. the mortgage banks.   The  security given to the mortgage banks in respect of the loans advanced by  them no doubt is deemed to have been transferred to  the Central  Mortgage Bank, but that is only by way of  securing the  monies  ’advanced by the Central Mortgage Bank  to  the ,mortgage banks.  Nevertheless, the duty to collect loans is upon  the  mortgage  banks and  notwithstanding  the  deemed transfer  to  the  Central Mortgage  Bank  of  any  property mortgaged to the mortgage banks, the amount due the mortgage banks  is payable to the mortgage banks only and not to  the central  Mortgage  Bank.   Unless  there  is  any   specific provision  in the Act which directly creates  a  contractual liability   between  the  Central  Mortgage  Bank  and   the borrowers from the mortgage banks, the liability of the bor- rowers for payment of loans advanced to them is only to  the mortgage  banks which actually advanced the loans  to  them. The  borrowers  have no liability to  the  Central  Mortgage Bank. [447 B-E] (IV) The legislature apparently realised the absence of  any power  in the Act, and therefore provided for creation of  a common  cadre  of  employees  when  it  enacted  sec.   116A empowering  the  Registrar  to  create  a  common  cadre  of employees  for  any  class of society, if  he  considers  it necessary in the interest of the cooperative movement to  do

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so.  The power is of a general nature and is  applicable  to the  mortgage  banks as well as other  societies  registered under the Act.  Section 116-A also empowers the Registrar to require  the  affiliated societies to make  contribution  of such  sum every year towards expenditure as may be  incurred for  the  purpose of creation of any common cadre  and  make such payment enforceable.  The High Court is right in  hold- ing  that  when  a  centralised  service  or  any  cadre  of employees  of  the mortgage banks cannot be created  by  the Board in exercise of its power tinder,s.     115 of the Act, r. 70 cannot vest such power in the Board.  In this view, r. 70  is ultra vires the rule-making power of the State  under sub.sec.  (1)  of Sec. 130 read with Sec. 115  of  the  Act. [447E-F; 448B-D]

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeals No.  2229-2231. of 1972. Appeals  by special leave from the Judgment and order  dated the  24th  March, 1972 of the Andhra Pradesh High  Court  at Hyderabad in Writ Petitions Nos. 6005 of 1970, 1547 of  1971 and 5784 of 1970. M.   Krishna Rao, B. Balamukanda Reddy and B. Parthasarathi, for the appellant (in all the appeals). M.   K. Ramamurthy and J. Ramanrurthi, for respondent no.  1 (in C.A. No. 2230). S.   Dasaratharama Reddy and A. Ramchandran,.for  respondent No. 1 (in C.A. 2231). The Judgment of the Court was delivered by JAGAMOHAN REDDY, J. In the three writ petitions filed by the respective respondents challenging the vires of r. 70 of the Andhra Pradesh Co-operative Societies Act.  1964-hereinafter called ’the Act-the Andhra Pradesh High Cour held that  rule to  be  ultra  vires the Board of Directors  of  the  Andhra Pradesh  Co-operative  Central  Land  Mortgage  Bank  Ltd.,- hereinafter referred to as ’the Central Land Mortgage  Bank. These appeals are by special leave against that judgment. The  respondent,in,  Civil Appeal No. 2229/72  is  Assistant Accountant   in  the  Chittor  Primary   Co-operative   Land Mortgage- Bank 443 Ltd.   In  Civil  Appeal No.  2230/72  the  respondents  are employees of the different Co-oprative Land Mortgage  Banks. The  respondent in Civil Appeal No. 2231/72 is  the  Nellore Co-operative  Land Mortgage Bank Ltd.. In the first  of  the appeals  the petitioner/respondent complained that  when  he was  due for promotiOn for the post of an Accountant,  under r.  70  his right to promotion based on seniority  had  been taken away.  According to him, but for r. 70, he would  have had  a right to promotion under Bye-law 10 on the, basis  of his seniority among the Assistant Accountants of that  Bank. The petitioners/respondents in the second of the appeals had urged  that a co-operative society was a body corporate  and the  ultimate authority over that society was vested in  its general  body  under  s. 30 of the  Act,  and  the  Managing Committee  thereof had the right to manage all  its  affairs including  the  power to appoint,transfer  and  dismiss  its employees.  That power of society is sought to be interfered with   not  only  by  vesting  the  Board  with   power   of superintendance  ‘ under S. 115 of the Act but also by  r.70 made pursuant to that section.  Not only s. 115 at r, 70 but also s. 116A of the Act according to them, were wholly ultra vires the State Legislature.  The respondent in the third of

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the  appeals apprehends that r. 70 takes, away its right  of appointment,  dismissal  and  control over  certain  of  its employees which render them liable to be transferred by  the Central Land Mortgage Bank to other mortgage banks elsewhere in  the  State which is an interference with  the  right  of management  of  the Primary Land Mortgage Banks.   The  High Court,  while  negativing the contention that ss. 1  15  and 116A of   the  Act were ultra vires the State  Legislature,, has, however, held, as   already adverted to, that r. 70 was ultra vires of s. 130(1) read with s.   115   of  the   Act. Before  us,  the  arguments were confined  to  the  question whether  the High Court was right.in declaring r, 70 of  the Rules to be ultra vires of s. 115 of the Act. The impugned r. 70 is purported to be mase  under sub-s. (1) of  s. 130 read with s. 115 of the Act.  These two  sections and the impugned rule are as follows: s.   115-"Subject  to the provisions of this Act, the  Board shall have such power of supervision over the mortgage banks including  power of appointment, transfer  and  disciplinary action  in respect of the employes of mortgage banks as  may be  prescribed, and may, with the previous approval  of  the Registrar,  make  such regulation as may  be  necessary  for carrying out all or any of the purposes of this Chapter." s.   130-7"(1) The Government may, by notification published in  the Andhra Pradesh Gazette, make rules for carrying  out all or an of the purposes of this Act, for the whole or  any part of the State and for any class of societies. r.   70-(1) The Board of Directors of Central Land  Mortgage Bank hereinafter , referred to as ’Board’ shall constitute a centralised  service for the mortage banks in the State  and with  effect  from such constitution the  Board  shall  have power to make appointments to the posts brought under 444               centralised  service  and the  mortgage  banks               shall  have no power to, make appointments  to               such posts.  x    x              x    x               (13)       The Board shall have power  to,call               upon  the mortgage banks to contribute to  the               cost  of  service  rendered  by  the   Central               Mortgage  Bank  by providing the  services  of               members of the centralised service to work  in               the  mortgage  banks and the  mortagage  banks               shall  pay  the cost at the  rates  prescribed               from  time  to  time by  the  Board.   If  any               mortgage  Bank fails to pay such  contribution               within  the time fixed, the Registrar may,  on               the  application of Central Mortgage Bank  and               after   such  enquiry  as  he   may   consider               necessary make an order requiring the mortgage               bank  to pay the amount, and every such  order               shall be enforceable against the mortgage bank               under  section 63 (2) of the Act as if it  was               an award.               (14)  On  constitution of centralised  service               all   rights   and  privileges   accrued   and               liabilities  incurred  by  the  employees   in               relation  to his service in the mortgage  bank               shall stand vested with the Board.               x                     x                      x               x               It may be mentioned that s. 115 of the Act  is               in  Ch.   XIII  dealing  with  Land  Mortgage:               Banks.   Clauses (a), (b) and (c) of S. 84  in               Ch.  XIII  define "Board",  "Central  Mortgage

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             Bank"   and  "Mortgage   Bank"   respectively.               According  to  these definitions  the  "Board"               means  the  Board  of  Directors  of   Central               Mortgage  Bank; "Central Mortgage Bank"  means               the  Andhra Pradesh Co-operative Central  Land               Mortgage Bank; and "Mortgage Bank" means a co-               operative  land  mortgage bank  registered  or               deemed  to  be registered under  the  Act  and               admitted  as a member of the Central  Mortgage               Bank.  That section also defines "trustee" but               it is not necessary for our purposes to  refer               to this definition.  It may also be  mentioned               that the rules under s. 2(l) of’ the Act  mean               the rules made under the Act.               Under  s. 85 of the Act the provisions of  Ch.               XIII  apply  to the mortgage  banks  advancing               loans for the purposes therein enumerated  and               under  s. 97 subject to the provisions of  the               Act  and  in accordance with  the  rules  made               thereunder,  it  shall  be  competent  for   a               mortgage   bank  to  advance  loans  for   the               purposes  referred  to in S. 85  and  to  hold               lands,the  Possession of which is  transferred               to it under the provisions of Ch.  XIII.   The               mode  of recovery of the amounts, advanced  by               the mortgage banks is set out in ss.100 to 109               of the Act, under which any loan granted by  a               mortgage   bank,   including   any    interest               chargeable thereon and costs, if any, incurred               in  connection  therewith,  shall  when   they               become  due  be, recoverable by  the  mortgage               bank.   All powers in respect of the  recovery               of, loans are conferred on the mortgage banks,               such  as on an application made by any of  the               mortgage  banks the Registrar is empowered  to               grant  -a certificate for recovery of  a  loan               due to it.  The other provisions confer  power               on  the Collector to make recoveries during  a               certain period, and a power of distraint and 445 sale.  When power of sale is to be exercised; powers of  the mortgage  bank  where  mortgaged property  is  destroyed  or security becomes insufficient; power of Board or  Trustee to distrain and sell all property are also provided for.  These provisions  further provide that the title of  purchaser  is not to be questioned on ground or irregularity; mortgage  is not to be questioned on insolvency of mortgagor.  They  also deal with the appointment of a receiver and his powers  etc. Apart from these sections, it may be noticed that ss. 93 and 94  empower, notwithstanding an thing contained in  any  law for the time being in force, a mortgage bank or the  Central Mortgage Bank to purchase any mortgaged property sold  under Ch.  XIII of the, Act and the property so purchased shall be disposed  of by such bank by sale within such period as  may be fixed by the Trustee.  By sub-s. (2) of s. 93 this  power was  to override the maximum limit of  agricultural  holding fixed  under  the  Andhra Pradesh  Ceiling  on  Agricultural Holdings Act, 1961.  Section 94 provides that the  mortgages executed in favour of, and all other. assets transferred to, a  mortgage bank by the members thereof shall,  with  effect from  the date of such execution or transfer, be  deemed  to have  been transferred by such mortgage bank to the  Central Mortgage  Bank  and shall vest in the Trustee.   Section  95 provides  that  payments of all moneys due to  the  mortgage bank  are payable to it and such payments shall be valid  as

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if  the  mortgage had not been so transferred.  It  is  also provided that the mortgage bank shall, in the absence of any specific  direction to the contrary issued by the  Board  or Trustee and communicated to the mortgage bank , be  entitled to sue, on the mortgage or take any other proceeding for the recovery of the moneys due under the mortgage. We have set out some of the relevant provisions to show that there  is  nothing  in the Act which  empowers  the  Central Mortgage Bank, notwithstanding the fact it provides funds to the  mortgage  banks,.  to. make  collection  of  the  loans advanced  by  the mortgage banks.  The,  rule  making  power conferred  on the Government for carrying out all or any  of the  purposes  of the Act must be confined to  such  of  the purposes as are, enumerated or indicated in the preamble  or in any of the provisions of the Act.  The only provision  to which a- reference has been made specifically as  empowering the  Board,  of Directors of the Central  Mortgage  Bank  to constitute  a centralised service for the mortgage banks  is s.  115 of the Act.  A careful reading of s.  115,  however, does  not justify the contention that the  Central  Mortgage Bank either has. the power directly to collect the loans and advances   given by the member banks, namely,  the  mortgage banks,  or.  to creak a centralised cadre  of  service  from among the employees of the mortgage banks which are  members of  the Central Mortgage Bank.  That section merely  confers power  of supervision on the Board of  the Central  Mortgage Bank over the mortgage banks which power inicludes the power of appointment, transfer and disciplinary action in  respect of the employees of the mortgage banks.  It may be that some questions  may  be raised in respect of the actions  of  the mortgage  banks in the matter of appointment,  transfer  and disciplinary.  actions  of  its  employees.   Whenever  such questions  are.  raised,  the Board   of  Directors  of  the Central   Mortgage  Bank  in  exercise  of  its   power   of supervision can go 16-  L954 SuPCI/74 446 in  to  the  question of  such  appointments  transfers  and disciplinary  actions made or taken by the ’mortgage  banks. This power., therefore, can in no circumstances be construed as  empowering  the  Board: of  Directors  of  the  Central: Mortgage Bank to recruit employees for the mortgage banks or to  make appointments to, a common cadre created by it  from out of the employees of the member, mortgage banks.  If  the employees are appointed, by the Central Mortgage Bank, their salaries  and  other emoluments should be paid by  it.   But evidently  this is not so, as sub-rr. (13) & (14); of r.  70 authorise   the   Central,  Mortgage  Bank  to   call:   for contribution  for the- cost of the service rendered  by  the Central  Mortgage  Bank to. be borne by the  mortgage  banks and,  provides that once a centralised cadre is  constituted all rights and privileges accrued and liabilities  incurred, by the employee in relation to his service in the, mortgage, bank  shall stand vested with the Board.  It is  this  power that  the  appellants-  are seeking to  draw  from  s.  115, because only if such a power can be found in. that provision or  in any other provision of the Act,, can be impugned"  r. 70  be made under sub-s. (1) of s. 130 of the Act.  In  this connection  it should; be observed that the key words in  s. 115  are  ’employees  of the mortgage bank’  The  power  ,of supervision  including the power- of  appointment,  transfer and  punitive  action may be taken by the  Central  Mortgage Bank  against person who are, the employees of the  mortgage banks.   But r. 70 seeks to bring into being  a  centralised service,  the employees whereof. shall be the  employees  of

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the  Central  Mortgage Bank and not of the  mortgage  banks. Such a centralised service is not contemplated by s. 115. It  is contended by the learned Advocate tot the  appellants that the word ’transfer’ in section 115 would indicate  that it can only be in. respect of the transfer of employees from one mortgage bank to another.  We cannot read this power  in the  manner  suggested, and if so this would  authorise  the constitution  of a centralised cadre.  As we have  explained already  the power of the Central Mortgage Bank is  only  of supervision  which  power to. supervise is to  include  the: power  of appointment, transfer and disiplinery action.   It is  only where what is not included in a particular term  as generally understood or where thee is some doubt in  respect of   any   particular  matter  being  included,   that   the Legislature  specifies  it by including  that  matter.   The super not include the power to transfer an employee from one mortgage  bank  to another creating thereby  a  contract  of service    with    a   different   employer.     The    word ’transfer’,therefore,  must be read as a transfer  from  one branch of the same mortage bank to the another of its branch The  learnt  Advocate for the appellation  stated  that  the mortgage   banks   have   no  branches.    WE   would   not, however,venture  to  say so.As pointed out  by  the  learned Advocate for the first respondent in civi Appeal No.2231  of 1972  that Bye-Law 20 of the Model Bye-Laws of  Co-operative Land  Mortage Bank Ltd. provides for maintaing a  record  of service by the Bank in respect of each employee in which all changes  affecting  rank,  emoluments,transfers  and   other allied  matters   shall be noted in the register  under  the attestation  of the Secretary. This povision shows that  the Bye-Laws envisage a transfer of an 447 employee  from  one branch to another of a  mortgage,  bank. This  bye-law  is consistent With s. 115 of  the  Act  Which confers  a  supervisory power in respect of transfer  of  an employee from one branch to another of the mortgage bank and not from one mortgage bank to another. The learned Advocate for the appellants contends that it  is the  Central Mortgage Bank which advances the funds  to  its members,  namely, the mortgage banks and the  responsibility is  on  the Central Mortgage Bank to, see that  the  amounts advanced  by  the member banks are collected and  the  loans advanced  by  it are properly secured.  While no  doubt  the Central  Mortgage  Bank may be concerned with  securing  its loans  to the mortgage banks, the provisions of the  Act  do not  confer  upon  the Central Mortgage Bank  the  power  to collect  any  loans advanced by the member  banks  i.e.  the mortgage banks.  The security given to the mortgage banks in respect of the loans advanced by them no doubt is deemed  to have been transferred to the Central Mortgage Bank, but that is  only  by  way of securing the  monies  advanced  by  the Central  Mortgage Bank to the mortgage banks.   Nonetheless, as  we have seen earlier, the duty to collect the  loans  is upon  tie  mortgage  banks and  notwithstanding  the  deemed transfer  to  the  Central Mortgage  Bank  of  any  property mortgaged  to  the  mortgage banks, the amount  due  to  the mortgage  banks is payable to the mortgage banks on and  not to the Central Mortgage tank.  Unless there is any specified provision  in the Act which directly creates  a  contractual liability   between  the  Central  Mortgage  Bank  and   the borrowers  from  the mortgage banks, the  liability  of  the borrowers  for payment of loans advanced to them is only  to the  mortgage  banks which actually advanced  the  loans  to them.  The borrowers have no liability to the Central  Mort- gage Bank.

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The Legislature apparently realised the absence of any power in the Act, and therefore provided for creation of a  common cadre  of employees when it enacted s. 116A  empowering  the Registrar  to  create a common cadre of  employees  for  any class  of  society,  if he considers  it  necessary  in  the interest  of  the  co-operative movement  to  do  so.   This section reads as under               s.    116A-"(1)  Notwithstanding  anything  in               this Act 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 societies is  necessary,  he               may,  constitute an appointment  committee  or               authorise  one  or more federal  societies  to               which  such class of societies is  affiliated,               to exercise the power of appointment, transfer               and,   disciplinary action in respect of  such               categories  of  employees  of  that  class  of               societies as may be specified by him and  make               such  regulations  as  may  be  necessary  for               carrying  out  the said purpose.   Where  such               appointment   committee  is   constituted   or               federal society is authorisd by the Registrar,               the affiliated societies shall not have powers               to  deal  with such  categories  of  employees               except  to  the  extent  the  regulation   may               permit.               448               (2)   The  Registrar  shall  have   power   to               require  the  affiliated  societies  to   make               contribution  of such sum every  year  towards               expenditure,  as the appointment committee  or               federal  society  is likely to  incur  or  has               incurred  for.  the purpose.  If  any  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 be may  consider  necessary.,               make an order requiring the society to pay the               amount,   and  every  such  order   shall   be               enforceable against the society as if it  were               a decision under section 62." The power of the Registrar, it will be noticed is, to create a common cadre of employees for any class of societies.  The power, therefore is of a general nature and is applicable to the  mortgage  banks  As  well as  to  the  other  societies registered  as societies under the Act.  Section  116A  also empowers  the Registrar to require the affiliated  societies to  make contribution of such sum every year towards  expen- diture  as may be incurred for the purposes of  creation  of any common cadre and make such payment enforceable.  In  our view  the  High  Court  is right  in  holding  that  when  a centralised  service  or  any  cadre  of  employees  of  the mortgage banks cannot be created by the Board in exercise of its  power under S. 115 of the Act, r. 70 cannot  vest  such power in the Board.  In this view, r. 70 is ultra vires  the rule-making  power of the State under sub-s. (1) of  s.  130 read with S. 115 of the Act. The appeals are accordingly dismissed with costs.  One set. S.B.W. Appeal dismissed 449

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