Economic Viability is Mandatory: Registration under the 1960 Act and Government Resolutions requires strict compliance with financial prerequisites. (Paras 17, 22) No Arbitrary Relaxation: The State cannot relax conditions in a manner that frustrates the Act’s object. (Para 32) Expert Committee’s Findings Binding: The Scrutiny Committee’s assessment of financial viability is authoritative. (Para 31)

The Supreme Court dismissed the appeals, upholding the High Court’s order. (Para 35) Held: Registration could not be granted without proving economic viability. (Para 30)

Major Acts and Provisions:

• Maharashtra Co-operative Societies Act, 1960 (the 1960 Act)
  Section 4: Prohibits registration of societies likely to be economically unsound or contrary to State Government’s policy directives. (Para 13)
  Section 6(1): Mandates a minimum of 10 members (or higher as determined by the Registrar) for registration, emphasizing economic viability. (Para 13)

• Government Resolutions:
  23.09.2013: Revised criteria for registering Primary Agricultural Credit Co-operative Societies (PACCS), including a minimum of 75 members and formation of a Scrutiny Committee to assess financial ability. (Para 15)
  14.02.2017: Required a minimum share capital of Rs. 5 lakhs for Scheduled PACCS at the time of registration. (Para 16)

Key Phrases/Latin Terms:

• Ex-facie: The State’s order was ex-facie perverse for ignoring mandatory prerequisites. (Para 11.4)

• Locus standi: Respondent No. 6, as a member of an existing society, had standing to challenge the registration. (Para 33)

Procedural History:

1. Scrutiny Committee (13.04.2023): Rejected the appellant-society’s application for registration, citing non-compliance with financial viability criteria. (Para 3)

2. State Appeal (28.06.2023): Allowed registration, disregarding the Committee’s findings. (Para 5)

3. High Court (05.01.2024): Set aside the State’s order, upholding the Committee’s decision. (Para 7)

4. Supreme Court (02.04.2025): Dismissed the appeals, affirming the High Court’s judgment. (Para 35)

Question of Law:
Whether the State could relax mandatory financial viability criteria for registering a co-operative society under the 1960 Act and Government Resolutions? (Para 31)

Facts:

1. Nature of Litigation: Challenge to the High Court’s order quashing the State’s decision to register the appellant-society. (Para 8)

2. Remedy Sought: Appellants sought reversal of the High Court’s order to allow registration. (Para 10)

3. Reason for Filing: The State’s order allegedly ignored financial viability prerequisites. (Para 25)

4. Prior Decisions: Scrutiny Committee rejected registration; State reversed it; High Court reinstated the Committee’s decision. (Paras 3, 5, 7)

Issues:

• Whether the appellant-society met the financial viability criteria under the 1960 Act and Government Resolutions? (Para 19)

• Whether the State’s relaxation of share capital requirements was lawful? (Para 32)

• Whether respondent No. 6 had locus standi to challenge the registration? (Para 33)

Submissions/Arguments:

• Appellants:
  a) Only society in the revenue village; complied with membership requirements. (Para 10.1, 10.10)
  b) Undertaking to raise Rs. 5 lakhs share capital within 3 years. (Para 10.2)
  c) Existing society issued a No-Objection Certificate (NOC). (Para 10.6)

• Respondents:
  a) Committee’s findings on financial non-viability were conclusive. (Para 11.3)
  b) State’s order bypassed expert scrutiny. (Para 11.2)
  c) Registration would destabilize existing societies. (Para 11.5)

Subjects:
Co-operative society, economic viability, share capital, Scrutiny Committee, Government Resolutions, locus standi, registration rejection.