Case Note & Summary
The petitioners, Abdul Majid Babaso Momin and two cooperative societies, filed a writ petition under Article 226 of the Constitution of India before the Bombay High Court. They challenged the refusal of the National Bank for Agriculture and Rural Development (NABARD) to register them as Primary Agricultural Credit Societies (PACS) under Section 22 of the NABARD Act, 1981. The petitioners were multi-purpose cooperative societies registered under the Maharashtra Cooperative Societies Act, 1960, and sought registration as PACS to avail refinance facilities from NABARD. NABARD rejected their applications on the ground that they did not meet the definition of 'primary agricultural credit society' as defined under Section 2(1)(d) of the NABARD Act, which requires the society to be primarily engaged in providing credit for agricultural purposes. The petitioners argued that their objects included agricultural credit and that they should be registered. The Court examined the definition and found that the petitioners' societies had multiple objects, including non-agricultural activities, and thus did not qualify as PACS. The Court held that NABARD's refusal was justified and dismissed the petition. The decision was based on a strict interpretation of the statutory definition and the scope of NABARD's powers.
Headnote
A) Cooperative Law - Registration as Primary Agricultural Credit Society - Section 22 of NABARD Act, 1981 - The petitioners, multi-purpose cooperative societies, sought registration as PACS to access refinance facilities. NABARD refused on the ground that they did not meet the definition of PACS under the Act. The Court held that the definition of PACS under Section 2(1)(d) of the NABARD Act requires the society to be primarily engaged in providing credit for agricultural purposes, and the petitioners, being multi-purpose, did not qualify. The refusal was upheld. (Paras 1-23) B) Cooperative Law - Definition of Primary Agricultural Credit Society - Section 2(1)(d) of NABARD Act, 1981 - The Court interpreted the definition strictly, noting that a society must have as its principal object the provision of credit for agricultural purposes. The petitioners' objects included multiple activities beyond credit, thus they did not satisfy the definition. (Paras 10-15) C) Constitutional Law - Writ Jurisdiction - Article 226 of Constitution of India - The Court held that the decision of NABARD, being a statutory authority, was subject to judicial review. However, on merits, the refusal was found to be in accordance with law and not arbitrary. (Paras 16-20)
Issue of Consideration
Whether the petitioners, being multi-purpose cooperative societies, are entitled to be registered as Primary Agricultural Credit Societies (PACS) under Section 22 of the National Bank for Agriculture and Rural Development Act, 1981, and whether NABARD's refusal to register them is valid.
Final Decision
The Bombay High Court dismissed the writ petition, upholding NABARD's refusal to register the petitioners as Primary Agricultural Credit Societies. The Court held that the petitioners, being multi-purpose societies, did not satisfy the definition under Section 2(1)(d) of the NABARD Act, 1981.
Law Points
- Interpretation of Section 22 of NABARD Act
- 1981
- Definition of Primary Agricultural Credit Society
- Cooperative Societies Act
- 1960
- Scope of Writ Jurisdiction
