The Supreme Court has delivered a significant ruling on the legal status of cooperative societies affected by state reorganisation, holding that a cooperative society cannot automatically be treated as a Multi-State Cooperative Society once its area of operation is restricted to a single state.
A bench led by Justice Alok Aradhe examined the complex legal interplay between the Uttar Pradesh Reorganisation Act, 2000 and the Multi-State Cooperative Societies Act, 2002. The core issue before the Court was whether certain sugarcane growers’ cooperative societies located in Udham Singh Nagar district of Uttarakhand could be treated as Multi-State Cooperative Societies under Section 103 of the 2002 Act following the bifurcation of the erstwhile State of Uttar Pradesh.
The case arose from the functioning of the Sugarcane Growers Cooperative Society at Bajpur. Prior to the creation of the State of Uttarakhand in November 2000, the society operated across 130 villages in the erstwhile Uttar Pradesh, including villages in Bajpur and Suar (Rampur district).
Following the enactment of the Uttar Pradesh Reorganisation Act, 2000, the region was divided between two states. While the villages of Bajpur became part of the newly created State of Uttarakhand, the Suar region remained within Uttar Pradesh. As a result, the society’s operational jurisdiction briefly spanned across both states.
Subsequently, administrative steps were taken to reorganise cooperative societies along territorial lines. In May 2002, the Deputy Cane Commissioner ordered the removal of 34 villages in Uttar Pradesh from the Bajpur society’s area of operation and transferred them to another cooperative society in Suar, Rampur. This effectively restricted the Bajpur society’s operations entirely to Uttarakhand.
Gurdeep Singh Narval, a sugarcane grower from Suar village whose membership was affected by the reorganisation, challenged the move. After the High Court directed him to pursue arbitration, the matter went before the Central Registrar under the Multi-State Cooperative Societies Act.
The sole arbitrator ruled in Narval’s favour in 2004, holding that the society had automatically become a Multi-State Cooperative Society on November 9, 2000, when the state was bifurcated. The arbitrator also declared the subsequent administrative actions restricting the society’s operations to Uttarakhand as illegal and void.
This decision triggered a prolonged legal battle that eventually reached the Supreme Court.
The Supreme Court examined whether Section 103 of the Multi-State Cooperative Societies Act — which deals with societies whose operations extend across more than one state — automatically converted the society into a multi-state body due to the state bifurcation.
The Court held that the mere fact that a society’s area temporarily spanned two states after reorganisation does not permanently transform it into a Multi-State Cooperative Society. It noted that once the competent authorities reorganised the operational area and confined the society to a single state, the basis for treating it as a multi-state entity ceased to exist.
The bench emphasised that cooperative societies must function within the statutory framework governing territorial jurisdiction and administrative restructuring following state reorganisation. Consequently, the Court held that the arbitrator’s conclusion treating the society as a multi-state cooperative entity was legally unsustainable.
Case Details
Case Title: Registrar Cane Cooperative Societies & Ors. Versus Gurdeep Singh Narval (Dead)
Citation: JURISHOUR-298-SC-2026
Case No.: CIVIL APPEAL NO. 8743 OF 2013
Date: 10/03/2026
