1. Cooperative society registered under State Act — State reorganization — Dispute over whether society became a multi-State cooperative society under Section 103, Multi-State Cooperative Societies Act, 2002. (Para 1 , 2 )
Back
Next 
2025 Supreme(SC) 2044
SUPREME COURT OF INDIA
VIKRAM NATH, SANDEEP MEHTA, JJ.
The State of Uttar Pradesh through Principal Secretary and Others – Appellants
Versus
Milkiyat Singh and Others – Respondents
Civil Appeal Nos. 7050-7051 of 2010
Decided On : 15-12-2025
Important Points
IMPORTANT POINTS
(1) Multi-State cooperative society – Domicile or residence of members is irrelevant for determining whether a society attains status of a multi-State cooperative society – A cooperative society whose objects are confined to a single State cannot be treated as a multi-State cooperative society.
(2) Section 103 of Multi-State Cooperative Societies Act, 2002 does not, by itself, confer automatic or deemed status of a multi-State cooperative society upon every society registered under a State Cooperative Societies Act merely because parent State has undergone reorganization.
(3) Interpretation of Statute – A provision cannot be construed in isolation to fit a particular factual situation.
(1) Multi-State cooperative society – Domicile or residence of members is irrelevant for determining whether a society attains status of a multi-State cooperative society – A cooperative society whose objects are confined to a single State cannot be treated as a multi-State cooperative society.
(2) Section 103 of Multi-State Cooperative Societies Act, 2002 does not, by itself, confer automatic or deemed status of a multi-State cooperative society upon every society registered under a State Cooperative Societies Act merely because parent State has undergone reorganization.
(3) Interpretation of Statute – A provision cannot be construed in isolation to fit a particular factual situation.
Subject
Corporate Law - Cooperative Societies
Act Referred
Headnote
(A) Multi-State Cooperative Societies Act, 2002 – Section 103 read with Section 5 – Transformation of cooperative society into a multi-State cooperative society – Scope of deemed conversion – Domicile or residence of members is irrelevant for determining whether a society attains status of a multi-State cooperative society – A cooperative society whose objects are confined to a single State cannot be treated as a multi-State cooperative society – Section 103 of Central Act is attracted only where objects of cooperative society extend to more than one State – Section 103 of Multi-State Cooperative Societies Act, 2002 does not, by itself, confer automatic or deemed status of a multi-State cooperative society upon every society registered under a State Cooperative Societies Act merely because parent State has undergone reorganisation – Applicability of Section 103 requires a factual enquiry in each case as to whether objects of society extend to more than one State – If objects are found to span more than one State, deeming fiction under Section 103 will operate and society would be treated as a multi-State cooperative society – If objects remain confined to only one State, status of society will remain unchanged. (Paras 12.13, 12.20, 14 and 15)
(B) Interpretation of Statute – A provision cannot be construed in isolation to fit a particular factual situation – Words in a statute must necessarily draw their meaning from context and scheme of enactment and cannot be interpreted in isolation. (Para 12.12)
Facts of the case:
Whether, by virtue of Section 103 of Multi-State Cooperative Societies Act, 2002, subject cooperative society, though originally registered under the statute enacted by appellant-State, stands transformed into a multi-State cooperative society on account of State reorganization?
By impugned judgment, High Court allowed writ petitions and held that cooperative societies in question could not be treated as State cooperative societies so as to attract legislation enacted by State, and that consequent to reorganization of erstwhile undivided State, they had attained character of multi-State cooperative societies.
Findings of Court:
Section 103 of the Central Act is attracted only where the objects of the cooperative society extend to more than one State. Consequently, we are unable to accept the submission of the private-respondents that merely because the area of operation of the society spans across two States, the same would render it a multi-State cooperative society.
Result : Appeal allowed.
Legal Category Hierarchy
-
administrative law
-
cooperative societies
-
multi-state cooperative societies
- registration and conversion
- bye-laws and objects
-
multi-state cooperative societies
-
cooperative societies
Advocates appeared:
For the Appellant(s) : Mr. Rana Mukherjee, Sr. Adv. Mr. Rohit K. Singh, AOR Ms. Sneha Ahmed, Adv. Ms. Oindrila Sen, Adv. Mr. Shivansh Pundir, Adv. Mr. Yashveer Singh, Adv. Mr. Kartikey Bansal, Adv.
For the Respondent(s): Mr. P. Narasimhan, AOR Mr. P. K. Chakravarty, AOR Mr. Anuvrat Sharma, AOR Mr. Abhishek Kumar Singh, AOR Mr. Abhinav Jaganathan, Adv. Ms. Kritika Ranjan, Adv. Ms. Pallavi Singh, Adv. Ms. Anamika Yadav, Adv.
For the Appellant(s) : Mr. Rana Mukherjee, Sr. Adv. Mr. Rohit K. Singh, AOR Ms. Sneha Ahmed, Adv. Ms. Oindrila Sen, Adv. Mr. Shivansh Pundir, Adv. Mr. Yashveer Singh, Adv. Mr. Kartikey Bansal, Adv.
For the Respondent(s): Mr. P. Narasimhan, AOR Mr. P. K. Chakravarty, AOR Mr. Anuvrat Sharma, AOR Mr. Abhishek Kumar Singh, AOR Mr. Abhinav Jaganathan, Adv. Ms. Kritika Ranjan, Adv. Ms. Pallavi Singh, Adv. Ms. Anamika Yadav, Adv.
Table of Contents
2. Whether Section 103 triggers automatic conversion based on area of operation and member residence versus whether conversion requires the society's objects to extend across multiple states. (Para 6 , 7 )
3. Distinction between objects and area of operation — Section 103 requires objects to span multiple states — Member residence is irrelevant for determining multi-State status. (Para 12 , 14 )
4. Section 103 conversion requires the society's objects to extend to more than one state; area of operation or member residence does not suffice for deemed multi-State status. (Para 15 )
5. High Court judgment set aside — Appeals allowed — Writ petitions dismissed. (Para 16 , 17 )
6. Does State reorganization automatically convert a State cooperative society into a multi-State cooperative society under Section 103?
No. Conversion is not automatic. It requires a factual inquiry into whether the objects of the society, as reflected in its bye-laws, extend to more than one state after reorganization. (Para 15 )
7. Is the area of operation the same as the objects of a society for the purpose of Section 103?
No. Section 10(2) distinguishes between the two. Section 103 specifically employs the term objects; therefore, the area of operation cannot be substituted for objects to trigger deemed conversion. (Para 15 )
8. Does the residence or domicile of members determine if a society is a multi-State cooperative society?
No. The geographical location or residence of members is irrelevant. The determination depends solely on whether the primary objects of the society serve interests in more than one state. (Para 15 )
9. What are the pre-conditions for registration as a multi-State cooperative society under Section 5?
The society's main objects must be to serve the interests of members in more than one state, and its bye-laws must provide for social and economic betterment through self-help and mutual aid. (Para 15 )
JUDGMENT :
VIKRAM NATH, J.
| TABLE OF CONTENTS | |
| FACTUAL MATRIX: | |
| ISSUE BEFORE THIS COURT: Whether, by virtue of Section 103 of the Multi-State Cooperative Societies Act, 2002, the subject cooperative society, though originally registered under the statute enacted by the appellant-State, stands transformed into a multi-State cooperative society on account of the State reorganization? | |
| SUBMISSIONS ON BEHALF OF APPELLANT-STATE: | |
| SUBMISSIONS ON BEHALF OF RESPONDENTS: | |
| ANALYSIS AND DISCUSSION: | |
| I. Enactment and Scheme of Central Act: | |
| (a) | Understanding the term ‘object’ |
| (b) | Creation of “multi-State” cooperative society under the Central Act |
| (c) | Scope of “deemed conversion” under Section 103 of Central Act |
| (d) | Difference between “objects” and “area of operation” of the society |
| (e) | Principles for application of conversion by operation of law under Section 103 of Central Act |
| II. Whether subject co-operative society in the present case is multi- State cooperative society or not? | |
| (a) | Contention of the Parties |
| (b) | Decision of High Court |
| (c) | Averments of Parties before this Court |
| (d) | Subject cooperative society is not multi-State cooperative society |
| CONCLUSION: | |
1. The present appeals assail the common judgment dated 26th September, 2008, passed by the Division Bench of the High Court of Judicature at Allahabad1 [Hereinafter, referred to as “High Court”] in Civil Miscellaneous Writ Petition Nos. 61489 of 2007 and 18556 of 2008. By the impugned judgment, the High Court allowed the writ petitions and held that the cooperative societies in question could not be treated as State cooperative societies so as to attract the legislation enacted by the State, and that consequent to the reorganisation of the erstwhile undivided State, they had attained the character of multi-State cooperative societies.
FACTUAL MATRIX
2. Brief facts, relevant for the disposal of the present case, are narrated herein-below:
2.1. A cooperative sugar factory, namely Kisan Cooperative Sugar Factory Limited, having its registered office at Majhola, District Pilibhit, Uttar Pradesh (hereinafter referred to as “the cooperative society”) was originally registered under the provisions of the erstwhile Cooperative Societies Act, 1912. The private respondents herein, who were the writ-petitioners before the High Court, are shareholders of the said cooperative society.
2.2. In the year 1965, the appellant-State enacted the Uttar Pradesh Cooperative Societies Act (hereinafter, “State Act”) whereby the earlier Cooperative Societies Act, 1912 stood repealed and was substituted by the State Act.
2.3. In 2000, the U.P. State Reorganization Act, 2000 (“Reorganisation Act”) came into force, by which the erstwhile State of Uttar Pradesh was bifurcated into the present State of Uttar Pradesh and the newly created State of Uttarakhand. At that time, the Multi-State Cooperative Societies Act, 1984 governed cooperative societies. Subsequently, in 2002, the Multi-State Cooperative Societies Act, 2002 (“Central Act”) was enacted, repealing the 1984 Act and consolidating the law relating to cooperative societies whose operations extended beyond a single State.
2.4. The Central Act incorporated a deeming clause under Section 103 , in terms of which certain cooperative societies, consequent upon the reorganisation of the State, would be treated as multi-State cooperative societies. By virtue of this legal fiction, such societies, though originally registered under the State Act, would fall within the ambit and application of the Central Act.
2.5. Consequent to the enforcement of the Reorganisation Act, a joint meeting was held on 24th May, 2006 between the officials of the States of Uttar Pradesh and Uttarakhand for determining and finalising the apportionment of assets and liabilities of public sector undertakings and cooperative institutions. Thereafter,
