Summary
The Supreme Court held that the Sugarcane Growers Cooperative Societies at Bajpur and Gadarpur in Uttarakhand did not become Multi-State Cooperative Societies under Section 103 of the 2002 Act, because they had been reorganised under the U.P. Reorganisation Act, 2000, which has overriding effect, and their objects were confined to one State.
Issues
- Whether cooperative societies whose area of operation spanned both successor States after bifurcation of Uttar Pradesh were deemed Multi-State Cooperative Societies under Section 103 of the Multi-State Cooperative Societies Act, 2002.
- Whether the reorganisation of the societies under the transitional regime of the Uttar Pradesh Reorganisation Act, 2000 could be invalidated by the deeming fiction in Section 103.
- Whether Naresh Shankar Srivastava governed the case.
Provisions considered
- Section 87, Uttar Pradesh Reorganisation Act, 2000Read as embodying legislative continuity; Uttaranchal adopted the U.P. Cooperative Societies Act, 1965 under it, and the decision of both States' officers and the consequent reconstitution of the societies were actions under this transitional regime. (¶¶ 13, 18, 21, 24)
- Section 93, Uttar Pradesh Reorganisation Act, 2000The non obstante clause gives the Reorganisation Act overriding effect, so the completed reorganisation of the societies could not be unsettled by the deeming fiction of the 2002 Act. (¶¶ 14, 22, 24)
- Section 103(1) (with provisos added by Act 11 of 2023), Multi-State Cooperative Societies Act, 2002Construed as a legal fiction to be strictly confined to its purpose; it is not automatic but depends on a factual finding that the society's objects extend to more than one State, and it cannot retrospectively invalidate reorganisation completed under the Reorganisation Act. (¶¶ 15, 17, 22, 23, 24)
Held
- A legal fiction must be confined to the purpose for which it is created; the deeming fiction in Section 103 of the 2002 Act cannot be read in isolation to override the scheme of the Reorganisation Act, which governs the consequences of bifurcation and carries a non obstante clause in Section 93. (¶ 22)
- Reorganisation of the societies decided by officers of both States and implemented through general body resolutions, bye-law amendments and deletion of villages, taken under the transitional regime of Section 87, was valid, and Section 103 could not retrospectively invalidate those completed actions; harmonious construction requires the fiction to be restricted where reorganisation has already been carried out. (¶¶ 18, 19, 20, 21, 24)
- Following Milkiyat Singh, the Section 103 fiction is conditional on a factual determination that the society's objects, as distinct from its area of operation or the residence of members, extend to more than one State; the bye-laws showed objects confined to promoting local cane growers' interests, so the statutory preconditions were absent. (¶¶ 23, 24)
- Naresh Shankar Srivastava dealt with the Multi-State Cooperative Societies Act, 1984 and did not consider Sections 87 and 93 of the Reorganisation Act, and therefore did not apply. (¶ 25)
Result
Civil Appeal Nos. 8743, 8744 and 8745 of 2013 allowed and the High Court judgment of 14.03.2007 set aside; Civil Appeal No. 8746 of 2013 dismissed and the order of 05.09.2006 upheld; State cooperative authorities to hold elections of the societies expeditiously; no costs.