Societies reorganized under State Reorganisation Acts do not automatically acquire Multi-State status under Section 103 of the 2002 Act.

The Sugarcane Growers Cooperative Societies of Bajpur and Gadarpur were originally registered under the U.P. Cooperative Societies Act, 1965, with areas of operation spanning villages that now fall into both Uttar Pradesh (U.P.) and Uttarakhand following the State reorganisation in 2000.

Under Section 87 of the U.P. Reorganisation Act, 2000, the successor States initiated a process to bifurcate these societies to confine their operations within their respective territorial limits.

Resolutions were passed by General Bodies, and bye-laws were amended to exclude villages falling in U.P. from the Uttarakhand-based societies.

Respondent No. 1, a farmer from a U.P. village excluded from the Bajpur Society, challenged this through arbitration and subsequent writ petitions.

The High Court held that the societies had automatically become "Multi-State Cooperative Societies" under Section 103 of the Multi-State Cooperative Societies Act, 2002 (2002 Act), rendering the State-level reorganisations invalid.

The State of Uttarakhand appealed.

Whether a cooperative society becomes a Multi-State Cooperative Society by automatic operation of Section 103 of the 2002 Act solely due to State reorganisation, despite prior administrative bifurcation under the Reorganisation Act.

Whether the "objects" of the societies in question were sufficient to qualify them as Multi-State entities under the legal framework established by the 2002 Act and the 97th Constitutional Amendment.

The Court applied Section 87 of the U.P. Reorganisation Act, 2000, regarding the "Power to adapt laws".

Section 93, which grants the Reorganisation Act overriding effect over inconsistent laws.

Section 103 of the Multi-State Cooperative Societies Act, 2002 (as amended in 2023), which creates a legal fiction of "deemed" status for societies affected by reorganisation.

The Court relied on State of U.P. v. Milkiyat Singh (2025) to distinguish between a society’s "area of operation" and its "objects".

Limitations on Part IX-B of the Constitution following the judgment in Union of India v. Rajendra N. Shah (2021).

The Court reasoned that legal fictions, such as the one in Section 103 of the 2002 Act, must be strictly confined to their intended purpose and cannot override the express statutory scheme of a Reorganisation Act, which possesses a non-obstante clause under Section 93.

It observed that the States had already exercised their powers under Section 87 to bifurcate and reconstitute the societies before the 2002 Act could effectively impose a Multi-State status.

Furthermore, citing Milkiyat Singh, the Court held that for Section 103 to apply, the society’s "objects" must explicitly be Multi-State in character; here, the bye-laws indicated the objects were purely local—to serve cane growers in specific districts.

Harmonious construction dictates that a "deemed" status cannot unsettle completed administrative actions taken during the transitional regime of State reorganisation.

It held that Section 103 of the 2002 Act does not operate automatically or retrospectively to invalidate reorganisation processes completed under Sections 87 and 93 of the Reorganisation Act.

The Supreme Court quashed the High Court's judgment, upheld the validity of the State-led bifurcation, and directed the State authorities to conduct elections for the Societies under State law expeditiously.

Civil Appeals 8743, 8744, and 8745 of 2013 were allowed.