S. J. MUKHOPADHAYA, CJ.

1. The writ petition has been preferred by the Gujarat State Cooperative Bank Limited ('Bank' for short) challenging the letter dated 8/4/2004 issued by the respondent - Registrar, Co-operative Societies, State of Gujarat. By the said order, the Bank has been intimated that it will have to pay 1% guarantee fee on default guarantee instituted by the State for obtaining a loan of Rs.91,84.42,500/- (Rupees Ninety One Crore Eighty Four Lakh Forty Two Thousand Five Hundred only) from the National Bank for Agriculture and Rural Development (NABARD).

2. The only question requires to be determined is as to whether the Bank is liable to pay guarantee fee, and thereby the State can recover 1% guarantee fee from the Bank having accorded default guarantee in facilitating the Bank to obtain loan from NABARD.

The brief facts of the case not disputed by the parties are that the Bank applied for a loan of Rs.91,84,42,500/- from NABARD for the purpose of financing agriculture for schematic projects lending and rural development in the rural areas of the State of Gujarat. In order to secure such loan, the petitioner-Bank had applied for default guarantee from the State