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Civil · Reportable judgment

Shri. Masaidevi Vividh Karyakari Sahakari Seva Sanstha Maryadit Warewadi vs The State of Maharashtra & Ors.

Court
Supreme Court of India
Date
2 April 2025
Case No.
Civil Appeal No. 4669 of 2025
Result
Dismissed
Bench
Vikram Nath, Prasanna Bhalachandra Varale
Citation
[2025] 5 S.C.R. 409 : 2025 INSC 436
Acts & Sections
Maharashtra Co-operative Societies Act, 1960
Supreme Court Reports [2025] 5 S.C.R. 409 : 2025 INSC 436
Issue for consideration
Whether the High Court rightly set aside the orders passed by the State directing registration of the appellant-society.
Headnote

Maharashtra Co-operative Societies Act, 1960 – ss.4, 6 – Societies which may be registered – Conditions of registration– Appellant-society applied for registration of proposed society as a new Primary Agricultural Credits Co-operative Society – Scrutiny Committee rejected the application mainly on the ground of unsubstantiated financial viability of the appellant – Order set aside by State, registration directed – Order set aside by High Court– Sustainability:

Held: Impugned order upheld – Under ss.4 and 6, the economic viability of the society is a pre-requisite or basic condition for grant of registration to the society – Scrutiny Committee being an expert Committee was established specifically for the inspection of financial ability of a prospective society – It found that there was nothing in the proposal submitted by the appellant to substantiate the conditions of financial health as provided in the Government Resolution dated 14.02.2017 – There was no material on record before the Committee to show that the appellant was in a position to comply with the pre-requisites as referred therein – While deciding the appeal, State completely ignored the basic criteria or the pre-requisite for the registration of society, i.e. its economic viability, laid down by the State itself through its various Government Resolutions – By relaxing the pre-requisite condition relating to financial viability, the State allowed the registration of the society frustrating the very object of the Act – Committee had rightly rejected the application for registration – State unjustifiably interfered in the Committee’s order – High Court rightly set aside the order of the State. [Paras 17, 18, 22, 25, 27-29, 32, 34, 35]

Read the full headnote (1 more paragraph)

Maharashtra Co-operative Societies Act, 1960 – s.4: Held: The constitution of the Scrutiny Committee and the examination of the proposal by the Committee is a vital part of the Policy Directives of the State Government which is required to be complied with conditions u/s.4 – If a society is unable to comply with the pre-condition or prerequisite in regard to the economic viability of the society, allowing the registration of such a society which might not even be able to function, may adversely affect its members ultimately, frustrating the very object of the establishment of the said society – Thus, ignoring the findings of the Committee and allowing the registration of the society led to an unjustifiable interference in the Committee’s Order – Further, State Government may use its discretion for relaxation of conditions – However, such discretion cannot be used to frustrate the very object of the Act – Power of relaxing the necessary pre-requisites could have been made only through a Government Resolution and not at the whims of the State in an appeal which essentially led to by-passing the eligibility criteria set out by the Government through its multiple Resolutions. [Paras 30-32]

Keywords: Sections 4 and 6 of the Maharashtra Co-operative Societies Act, 1960 · Registration of proposed society · Primary Agricultural Credits Co-operative Society (PACCS) · Financial viability of the Society · Economic viability · Basic criteria or pre-requisite/pre-condition for the registration of society · Scrutiny Committee · Expert Committee · Government Resolutions · Registered co-operative society · Eligibility criteria of the applicant societies · Locus standi · Financially viable

As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Divya Pandey. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.

Full Judgment Text

Judgment Prasanna B. Varale, J: 1. Leave granted. 2. The challenge in the present appeals is to the common order dated 05.01.2024 in Writ Petition No. 8654/2023 and 42 other connected matters, whereby the High Court of Judicature at Bombay allowed the petitions preferred by the respondent no. 6 herein and in other connected matters and set aside the orders passed by the State of Maharashtra directing registration of the appellant-societies. 3. For the sake of brevity and as the legal issue involved is the same, we are referring to the facts of the W.P. No. 8654 of 2023 resulting into SLP (
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