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6. The petitioners submit that the Government also thought it desirable to confer upon such societies certain kind of privileges and facilities so as to encourage and assist the formation and working to such societies. It is further submitted that Co-operative Credit Societies Act, 1904 was based on the English Friendly Societies Act of 1896. Two basic objectives prompted the Government of India to enact this Act namely simplicity and elasticity.

7. The petitioners submit that the experience which the Government acquired in the course of working of the Co-operative Credit Societies Act, 1904 was not satisfactory since any worthwhile progress was marked in development of the rural credit. Therefore, it was in the need of an hour to remove the lacuna that the Cooperative Societies Act, 1912 was enacted which was the second phase of the co- operative movement in this country. The first major structural change which was sought to be achieved by the Co-operative Societies Act, 1912 was that the distinction between rural and urban societies was done away with and co-operative societies with other objectives besides credit facilities were permitted to be formed so as to promote the economic interest of their members.