Cooperative Society Does Not Automatically Become Multi-State After State Bifurcation: Supreme Court Clarifies Section 103 of Multi-State Cooperative Societies Act
Case Name: Registrar Cane Cooperative Societies & Others v. Gurdeep Singh Narval (Dead) through LRs. & Others
Citation: 2026 INSC 216; Civil Appeal No. 8743 of 2013 with connected appeals
Date of Judgment/Order: 10 March 2026
Bench: Hon’ble Mr. Justice Pamidighantam Sri Narasimha and Hon’ble Mr. Justice Alok Aradhe
Held: The Supreme Court held that cooperative societies do not automatically become Multi-State Cooperative Societies under Section 103 of the Multi-State Cooperative Societies Act, 2002 merely because their area of operation temporarily spans two States following State reorganisation. The Court clarified that the deeming fiction in Section 103 is conditional and must be strictly confined to situations where the objects of the society themselves extend to more than one State. Where the societies’ objects remain confined to local members within a single State and steps have already been taken under the State Reorganisation Act to reorganize or confine their area of operation to a single State, the societies cannot be treated as Multi-State Cooperative Societies.
Summary: The appeals concerned the legal status of two sugarcane growers’ cooperative societies—Bajpur and Gadarpur—after the bifurcation of the erstwhile State of Uttar Pradesh and the creation of the State of Uttaranchal (now Uttarakhand) under the Uttar Pradesh Reorganisation Act, 2000. Prior to bifurcation, these societies were registered under the Uttar Pradesh Cooperative Societies Act, 1965 and their areas of operation covered villages that later fell within the territories of both successor States. After the reorganisation, meetings between officials of both States resulted in decisions to reorganize the societies by separating villages located in Uttar Pradesh from those located in Uttarakhand so that their operations would be confined within a single State. Subsequently, amendments were made to the societies’ bye-laws and villages located in Uttar Pradesh were deleted from their area of operation. However, a member whose village was excluded initiated arbitration proceedings before the Central Registrar under the Multi-State Cooperative Societies Act, 2002, contending that the societies had automatically become Multi-State Cooperative Societies by virtue of Section 103 of the Act after the State bifurcation. The arbitrator accepted this contention and the High Court also held that the societies were Multi-State Cooperative Societies, directing that elections be conducted under the central law. The Supreme Court examined the interplay between the Uttar Pradesh Reorganisation Act, 2000 and the Multi-State Cooperative Societies Act, 2002. The Court emphasised that the Reorganisation Act contains overriding provisions ensuring continuity of laws governing institutions following State bifurcation and permits reorganisation of societies within successor States. It further held that the deeming provision under Section 103 of the 2002 Act must be interpreted narrowly and cannot override completed actions undertaken under the Reorganisation Act. The Court also distinguished between the “objects” of a cooperative society and its “area of operation,” holding that the statutory requirement for multi-state status relates to the nature of the society’s objectives rather than mere geographical spread arising due to administrative changes.
Decision: The Supreme Court allowed Civil Appeal Nos. 8743, 8744 and 8745 of 2013, set aside the High Court judgment dated 14 March 2007 which had treated the societies as Multi-State Cooperative Societies, held that the Bajpur and Gadarpur Sugarcane Growers Cooperative Societies were not Multi-State Cooperative Societies under the 2002 Act, directed that elections be conducted under the applicable State cooperative law, and dismissed Civil Appeal No. 8746 of 2013.