1. The petitioner No. 1 is an association of the bank employees and the petitioner No. 2 is a member thereof. Many employees of the cooperative banks in the state are members of the said association. Under Section 55 of the Madhya Pradesh Co-operative Societies Act, 1960, the Registrar has been empowered to frame rules governing the terms of employment and working conditions in a co-operative society or classes of societies. In exercise of the said powers the Registrar framed rules styled as the ' Madhya Pradesh Co-operative Central Bank Employees (Terms of Employment and Working Conditions) Rules.' Rule 32 thereof reads as under :
' 32. No employee of the bank shall be a member, representative or officer of any association representing or purporting to represent non-official co-operative employees unless such association satisfies the following conditions :
(a) the association should be recognised by the Registrar.
(b) membership of the association shall be confined only to the employees of co-operative institutions;
(c) the activities of the association shall be confined to the betterment of the prospects of employment, service conditions, emoluments and the welfare of the members generally ; and
(d) the association shall not be in any way connected with or affiliated to any association which is not recognised by the Registrar.'
2. The petitioners by this petition under Article 226 of the Constitution seek a writ of mandamus for restraining the respondents from giving effect to the said rule.
3. The contention of the petitioners is that Rule 32 is in excess of the authority conferred on the Registrar under Section 55 of the Co-operative Societies Act, as the rule has no relation to 'the terms of employment and working conditions '. In any case, it is urged that the rule violates the fundamental right of association guaranteed under Article 19(1)(c) and it is ultra vires of the Constitution. It is pointed out that under Rule 43(1)(e), a contravention of Rule 32 is made a ' gross misconduct'. As the petitioner association is not recognised by the Registrar, the employees of the cooperative banks, who are members of the petitioner-association, have beenexposed to disciplinary action. During the pendency of the petition, certain documents were filed by the petitioners to show that in fact show cause notices have been issued against some of the employees of the co-operative banks on the ground that they are members of the unrecognised association. It is, therefore, urged that it is necessary to strike down Rule 32.
4. The petition will have to be allowed on the short ground that Rule 32 violates the fundamental right of association guaranteed under Article 19(1)(c) of the Constitution. In O.K. Ghosh v. E.X. Joseph, A.I.R. 1963 SC. 812. , Rule 4B of the Central Civil Services (Conduct) Rules, 1955, which is similar to Rule 32, came up for consideration before the Supreme Court. Their Lordships of the Supreme Court declared Rule 4B ultra vires of Article 19(1)(c) of the Constitution. Their Lordships ruled:
' It is not disputed that the fundamental rights guaranteed by Article 19 can be claimed by Government servants. Article 33 which confers power on Parliament to modify the rights in their application to the Armed Forces, clearly brings out the fact that all citizens, including Government servants, are entitled to claim the rights guaranteed by Article 19. Thus, the validity of the impugned rule has to be judged on the basis that the respondent and his co-employees are entitled to form associations or unions. It is clear that Rule 4B imposes a restriction on this right. It virtually compels a Government servant to withdraw his membership of the service association of Government servants as soon as recognition accorded to the said association is withdrawn or if, after the association is formed, no recognition is accorded to it within six months. In other words, the right to form an association is conditioned by the existence of the recognition of the said association by the Government.........Can this restriction be said to be in the interests of public order and can it be said to be a reasonable restriction In our opinion, the only answer to these questions would be in the negative. It is difficult to see any direct or proximate or reasonable connection between the recognition by the Government of the association and the discipline amongst, and the efficiency of, the members of the said association. Similarly, it is difficult to see any connection between recognition and public order.'
5. Likewise, Rule 32 also imposes unreasonable restrictions on the right of association guaranteed to the employees and the rule has no direct or proximate or reasonable connection between the recognition of the association by the Registrar and maintenance of discipline amongst the employees and the efficiency of the members of the association. The contention of the respondents that the rule is essential to keep the employees of the co-operative banks away from outside influences and to maintain co-operative spiritamongst the employees by inducing them to form association of members belonging to co-operative societies only is thus without substance.
6. The petitioners had also challenged in the petition the vires of Sections 55 and 93 of the Co-operative Societies Act; but at the argument stage that ground was not pressed. It appears that the petition under Article 32 of the Constitution challenging Sections 55 and 93 of the Act was dismissed by the Supreme Court in limine and that may be the reason why the challenge to the said sections was abandoned before us.
7. In the result, the petition succeeds partly. Rule 32 of the Madhya Pradesh Co-operative Central Bank Employees (Terms of Employment and Working Conditions) Rules is declared ultra vires and is hereby struck down. In the circumstances, it is not necessary to issue the writ of mandamus as prayed for. We make no order as to costs. The security amount shall be refunded to the petitioners.