Nagpur Credit Cooperative Under CBI Probe After HC Flags 'Grave Illegalities'

The Central Bureau of Investigation (CBI) has registered an offence against officials of a Nagpur-based credit cooperative society after the High Court directed the agency to investigate alleged irregularities in the functioning of the society.

HC Order Triggers CBI Intervention

According to the CBI, the Nagpur bench of the High Court passed a common order on November 20 in three Criminal Writ Petitions, directing the agency to probe alleged illegalities committed in the affairs of Nirmal Ujjwal Credit Cooperative Society Limited, a multi-state entity with deposits exceeding ₹1,400 crore reportedly at risk.

The court observed that material before it indicated “prima facie grave illegalities, financial impropriety, mismanagement and misconduct” by those managing the society.

Court Flags Violations, Excess Deposits and Misleading Practices

The bench noted that as of March 2023, the society had accepted ₹1,303.52 crore in deposits, including funds from non-members, in violation of the Multi-State Co-operative Societies (MSCS) Act.

It further stated that the society had mobilised ₹1,497 crore in 2022–23, exceeding the legal limit by ₹425 crore. The court also criticised the practice of showing ₹19.05 crore interest on NPAs as profit, calling it misleading to depositors.

Police Inaction and Registrar’s Silence Questioned

Correspondence reproduced in the order revealed that the then Nagpur Police Commissioner had, in June 2023, written to the Central Registrar listing the violations and seeking permission to file a complaint. The Registrar later clarified that police did not require such permission to proceed. Despite this, no FIR was registered, prompting the bench to state that the police’s conduct “speaks volumes”, reflecting a clear reluctance to act.

The High Court also criticised the conduct of the Central Registrar, noting that after issuing a show-cause notice in January 2024, the Registrar remained silent for months. When the response finally came in November 2025, it was vague and lacked substantive reasoning. This “questionable conduct”, the court noted, strengthened the case for an independent investigation.

CBI to Examine Roles of Police and Registrar

The court directed the CBI to investigate the matter using the appropriate provisions of law and to also examine the role played by the police and the Central Registrar.

It clarified that the investigation should proceed independently, without being influenced by the court’s observations. If no offence is established, the CBI must file the appropriate summary before the court. Conversely, if an offence is made out, the agency is required to file a charge sheet.