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Shri Masaidevi Vividh Karyakari Sahakari Seva Sanstha Maryadit Warewadi v. State of Maharashtra

Civil Appeal · 2025 INSC 436Decided 2 Apr 2025
Civil Appeal (arising out of SLP(C) No. 4090 of 2024, with 24 connected SLPs)
Justice Vikram Nath · Justice Prasanna B. Varale

Background

The appellant sought registration as a new Primary Agricultural Credit Co-operative Society (PACCS) in Kolhapur district. A Scrutiny Committee rejected the application, finding it failed to meet several pre-conditions laid down in a 2017 Government Resolution, including proof of financial viability, a bank's undertaking to fund the new society, and no-objection from the existing society in the area. The State Government, however, overrode the Committee's rejection on appeal and directed registration anyway. This was challenged before the Bombay High Court by affected parties (including the existing society), which set aside the State's order and upheld the Committee's rejection. The appellant-society and several similarly-placed societies appealed to the Supreme Court.

Decision Breakdown

The Supreme Court upheld the Bombay High Court and dismissed the appeals. It held that the Scrutiny Committee's assessment of financial viability was a mandatory pre-requisite under the Government's own 2017 policy, and there was no material on record to show the proposed societies could actually function, for instance, the claimed bank support was a "bald statement" with no letter of undertaking attached. The Court held that the State Government could not use its appellate/administrative discretion to bypass or relax these conditions on an ad hoc, case-by-case basis; any genuine relaxation of eligibility conditions would itself have to be made through a fresh Government Resolution, not by overturning the Committee's findings in an individual appeal.

Lesson Learnt

When a government sets objective eligibility conditions for approving a new institution (like a cooperative credit society), it cannot informally waive those conditions for a favoured applicant, doing so undermines the very safeguards the policy was meant to provide, and any change to the rules must go through the same formal process that created them.

Official source (sci.gov.in)View Judgment (PDF)

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