Holding

PACSFED became a deemed multi‑state cooperative society under Section 95 of the Multi‑State Co‑operative Societies Act, 1984, effective from the date of the Uttar Pradesh re‑organisation, and the High Court’s order was set aside.

Summary

The Uttar Pradesh Cooperative Processing and Cold Storages Federation Ltd (PACSFED) was originally registered as an apex cooperative society under the Uttar Pradesh State Cooperative Societies Act, 1965, with its area of operation covering the whole state. When the Uttar Pradesh State Re‑organisation Act, 2000 came into force on 9‑Nov‑2000, Uttar Pradesh was bifurcated, creating the new State of Uttaranchal (now Uttarakhand). The question before the Supreme Court was whether, as a result of this bifurcation, PACSFED automatically became a multi‑state cooperative society governed by the Multi‑State Co‑operative Societies Act, 1984, via its Section 95 deeming provision, or whether it remained governed by the Uttar Pradesh Act. The Court examined the interplay of Section 95 of the Multi‑State Act with Sections 67, 86 and 93 of the Re‑organisation Act and rejected the contention that the Uttaranchal Cooperative Societies Act, 2003 could override the central law. It held that PACSFED was deemed a multi‑state cooperative society from the date of re‑organisation and that the High Court’s order quashing its registration was erroneous. Consequently, the appeals were allowed, restoring PACSFED’s registration under the Multi‑State Act.

Issues considered

Whether the bifurcation of Uttar Pradesh automatically converted PACSFED into a multi‑state cooperative society under Section 95 of the Multi‑State Co‑operative Societies Act, 1984.
Whether the Uttar Pradesh State Cooperative Societies Act, 1965 continues to govern PACSFED after the re‑organisation.
Whether Section 67 of the Uttar Pradesh State Re‑organisation Act, 2000 overrides the central provision of Section 95.
Whether the Uttaranchal Cooperative Societies Act, 2003, and its Section 129 affect the status of PACSFED and its member societies.
Whether the High Court was correct in quashing the registration certificate issued by the Central Registrar.

Legislation cited

Multi-State Co-operative Societies Act, 1984s. 18, s. 7, s. 95

Subjects

multi‑state cooperative societySection 95state bifurcationUttar Pradesh Re‑organisation Actcooperative lawdeemed registrationjurisdiction

Judgment

(2009] 7 S. C.R. 1188

A NARESH SHANKAR SRIVASTAVA
v
STATE OF U.P. & ORS.
·-· Civil Appeal Nos. 292-294 of 2005
MAY 06, 2009
B
[S.B. SINHA AND DR. MUKUNDAKAM SHARMA, JJ.]
Co-operative So.cieties - Mu/ti-State Co-operative
Societies Act, 1984 - s.95 - UP State Cooperative Societies
Act, 1965 and Rules framed thereunder - Uttarancha/ Co- ~·
c operative Societies Act, 2003 - s.129 - PACSFED was
regist9red as an apex cooperative socioty under the UP State
Cooperative Societies Act and the Rules framed thereunder
-Area of operation of PACSFED was the whole State of Uttar
Pradesh - UP State Re-organization Act came into force w. e. f.
D 9-11-2000, by operation of which Act, State of Uttar Pradesh
was bifurcated into two States i.e. State of Uttar Pradesh and
the new State of Uttaranchal (now Uttarakhand) - Bye-laws of
PACSFED not amended - Whether after bifurcation/re-
•
.
organisation of the State of Uttar Pradesh, the affairs of .
E PACSFED were governed by the UP. State Cooperative
Societies Act or by the Multi State Co-operative Societies Act
- Held: Since the objects of PACSFED still remained the same
as it was immediately before reorganization of the State of Uttar
Pradesh, it shall be deemed to have automatically become a
...
F Multi-State Co-operative Society w.e.f 9-11-2000 by virtue of
deeming provision of s. 95 of the Multi-State Co-operative
Societies Act - UP. State Re-organization Act, 2000 - s. 67.
The U.P. Cooperative Processing and Cold Storages
Federation Limited, Lucknow (PACSFED) was registered
G as an apex cooperative society under the provisions of

-
the U.P. State Cooperative Societies Act, 1965 and the l
Rules framed thereunder. The area of operation of the
PACSFED was the whole state of Uttar Pradesh.

H 1188
NARESH SHANKAR SRIVASTAVA V. 11'89
STATE OF U.P. & ORS.

In the year 2000, the U.P. State Re-organization Act, · A,.
2000 was passed which came into force on 9-11-2000. By
operation of the said Act, the State of Uttar Pradesh was
bifurcated ·and a new State of Uttaranchal (now
Uttara~hand) was created by carv~ng out certain
territories from the State of Uttar. Pradesh. B
The question which arose for consideration fo the
present appeals was whether on account of bifurcation.
of the State of Uttar Pradesh into two States i.e. State of
Uttar Pradesh and the State of Uttaranchal, the area of
operation of the PACSFEf> extended to both the States C
on and from the c;tate when the State ofUttarar1chal came ·
into existence i.e. from 9-11-2000 and as a consequence
thereof the PACSFED automatically beco.me a deemed--
multi-state cooperative society; registered under the Multi-
State Co~operative Societies Act, 1984 w~e.f. 9-11·-2000. D
Allowing the appeals; the Court
HELD: 1. PACSFED is a deemed multi. State
cooperative society registered under the corresponding
provision of the Multi-State Co-operative Societies Act, E·,
1984 as and from the date of the reorganisation of the
State of Uttar Pradesh. [Para 25] [1209-B]
2.1. Section 95 of the Multi-State Act will be squar_ely
applicable to the-case in hand. It provides that where the
object of the cooperative society is confined to one State, F
it would become from the-date of reorganization of State,
a Multi State Cooperative Society by virtue of Part II of
.State Reorganisation Act and then it shall be deemed to
be Multi State Cooperative Society and the bye~laws of
such Society-shall continue to be in force until altered.~ G
{Para 15) [1204-E-G]
-2.2. Section 95 of the Multi-State Act provides tl:lat it
would be operative as a consequence of reorganisation
of States and particularly when any area or portion of area H
1190 SUPREME COURT REPORTS (2009] 7 S.C.R.

A of the Society is bifurcated or divided and then fell in the
jurisdiction of two State administrations. The idea is to
obviate the administrative stalemate arising out of creation
of a new State and new administration. This section is
independent of all other sections of the Act. The Multi-
B purpose Co-operative Society has been defined as a
Society registered or deemed to be registered under the
Act and includes a National Co-operative Society. Sections
2, 4, 5, 6, 7'and 8 deal with how a Multi-State Co-operative
Society could be registered under the Central Act. In other
C words, by voluntary acts of the concerned persons a Multi-
State Co-operative Society could be formed if it satisfies
the conditions laid down in the aforesaid sections. As the
definition of Multi-State Co-operative Societies indicates,
there are two situations envisaged as to how a Multi-State
Cooperative Society comes into being. One is registered
0
after observing formalities of Sections 4, 5, 6, 7 and 8 and
the other is deemed Multi-State Co-operative Societies as
envisaged under section 95 of the Central Act. [Para 16)
[1204-H; 1205-A-D]
E 2.3. Section 95 of the Multi-State Act takes care of a
situation arising out of re-organisation of States of certain
class of co-operative societies. Indeed, the very rationale
or legal justification of having such a provision in the
statute book is to provide continuity to those co-operative
y
F societies, the objects of which were confined to one State
immediately before the day on which the re-organisation
takes place but as from the day of the re-organisation of
the State its object extends to more than one State, by
declaring that such co-operative societies shall be
G deemed to be a multi state co-operative societies,
registered under the corresponding provisions of the
Multi-State Act. The very purpose of having this kind of
provision is to stop the applicability of a State Co-operative
Societies Act over more than one State as a State Act
cannot have extra-territorial operation and the multi-state
H
NARESH SHANKAR SRIVASTAVA V. 1191
STATE OF U.P. & ORS.

co-operative societies cannot be regulated by a State Co- A
•· operative Societies Act. [Para 17] [1205-E-H]
·... 2.4. Section 18 of the Multi-State Act lays down a
procedure for conversion of a State cooperative society
into a multi-State cooperative society whereas Section 95
of Multi-State Act contained in Chapter XII deals with a B
specific situation in which certain cooperative societies
would become deemed multi-State cooperative societie!!
automatically by operation of law. Therefore, it cannot be
.J
said that until the procedure laid down for converting a
cooperative society into a multi-State cooperative society c
is followed, the cooperative society would continue to be
a State cooperative society to be governed and regulated
by the provisions of U.P. State Cooperative Societies Act,
1965. [Para 23] [1207-D-F]
D
3. Section 67 of the U.P. State Re-organization Act,
·,·,

~-
2000 gives an unmistakable impression that the need for
a direction of the Central Government would arise only in
respect of the applicability of a State law to the body
corporate which by virtue of the re-organisation of State
become inter-state body corporate. This is quite evident E
from a reading of sub-section (2) of Section 67 of the Re-
organisation Act. But when a central Act (in the present
-4
case the Multi-State Act) already contains a provision in
¥
the form of Section 95 which clearly embraces such co-
operative societies within its fold which as and from the F
date of re-organisation of the State become multi-state
cooperative societies, there is no legal requirement of
issuing any direction by the Central Government for making
the Multi-State Act applicable. [Para 19] [1206-C-F]
G
Anand Mal v. State of Rajasthan AIR 1962 Raj. 218 and
Mapu.sa Urban Cooperative Bank Ltd. v. G.S. Patil MANUI
MH/034211998 - referred to.
4. The contention that in view of Section 129 of the
Uttaranchal Co-operative Societies Act, 2003 which came H
1192 SUPREME COURT REPORTS (2009] 7 S.C.R.

A ·into force in 2003, 14 member societies of PACSFED in
Uttaranchal automatically became registered under the
Uttaranchal Act, is legally untenable, Once the State of U. ,'
P. was bifurcated by the Re-organisation Act which came
into force on 09.11.2000, Section 95 automatically got
B attracted. By virtue of Section 95 of the Multi-State Act,
PACSFED becomes a Multi-State Society. On 14.02.2001,
when the Central Registrar of the Multi-State Co-operative
Societies issued the Registration Certificate granting
registration of the PACSFED under the Multi-State Act, the \.

c Uttaranchal Act of 2003 was not in existence. Even
otherwise, a State legislation viz. Uttaranchal Act which
has been enacted subsequently cannot have an
overriding effect over a central law viz. the Multi-State Act.
The UHaranchal Act can govern and regulate the
cooperative societies whose objects extend to and apply
D
within the St~te of Uttaranchal. So, it cannot be said that
with enforcement of the Uttaranchal Cooperative ..
Societies Act, 2003, with effect from 21.5.2003, the Multi-
State Act shall not be applicable. The byelaws of the
PACSFED have not been amended so far. The area of ~

..
E · operation of the PACSFED as laid down in its byelaws is
still the same as it was on the date of the reorganisation
of the State of U.P. Therefore, it would be legally
impermissible to say that now the area of operation of the
y
PACSFED is confined to the State of U.P. alone and that it
F . has ceal;)ed td be a multi-State cooperative society. As far
as withdrawal of member-cooperative societies of the
PACSFED operating in the State of Uttaranchal is
conterned, the deemed.conversion of a cooperative
society into a multi-State cooperative society by virtue of
G Section 95 of the Multi-State Act is an irreversible process
and the. membership of a multi-State cooperative society
in a particular State at a given point of time is ·only a
fortuitous cfrcumstance on the basis of which a multi-
. State cooperative society cannot automatically revert to
H assume the character of a State cooperative society.
NARESH SHANKAR SRIVASTAVA V. 1193
STATE OF U.P. & ORS.

Further, there is no provision in the Multi-State Act which A
permits such automatic conversion of a multi-State
cooperative society into a State cooperative society by
operation of law. The only relevant consideration for
continuance of a multi-State cooperative society as a multi-
State cooperative society is that it should have its objects B
not confined to one State and since the objects of the
PACSFED still remain the· same as it was immediately
before the reorganization of th_e State of Uttar Pradesh, it
shall be deemed to be a Multi-State co-operative society
by virtue of deeming provision of Section 95 of the Multi- C
State Act. [Para 24] [1208-G-H; 1209-A-H; 1209-A]
Case Law Reference
AIR 1962 Raj. 218' referred to Para 21
MANU/MH/03~2/1998 referred to Para 21 D
'
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.
292-294 of 2005
From the Judgment and Order dated 10.11.2004 of the
High Court of Judicature atAllahabad, Lucknow Bench, Lucknow E
in Writ Petition Nos. 1710 of 2002 (MIS), 602 of 2002 (MIS) &
5171 of 2092 (MIB)
WITH.
Civil Appeal N~>. 1722 of 2005
' F
Sumeet Bhardwaj, P. Dutta, Mrid!Jla Ray Bharadwaj1 Manoj
Swarup, Lalita Kohli Charu Singhal (for Mis. Manoj Swarup &
Co.), Rajesh Srivastava, D.K. Rastogi, Raghvendra P. Singh,
· R-akesh Dwiveai; Rakesh KumarChaudhary, Shantanu krishna,
Anuvrat Prakash, Preetika-Dwivedi, Mukti Chowdhary, Rahul
G
Dua, R.K. Gupta, Chandra Prakash Pandey, Abhay Prakash
.Sahay, Anuvrat Sharma, Kamlendra Mishra, Asha G. Nair, Kiran ·
Bhardwaj, D.S. Nlahra, Javed Mahmud Rao, Vipin Gupta, for
appearing parties.
The Judgment of the Court was delivered by H
1194 SUPREME COURT REPORTS [2009] 7 S.C.R.

A DR. MUKUNDAKAM SHARMA, J.

1. The present appeals arise out of judgment and order
dated 10.11.2004 passed by the High Court of Allahabad,
Lucknow Bench, Lucknow in Writ Petition No. 5171 of 2002
along with 13 other similar connected writ petitions. Since the
B common questions are involved in these appeals, the same are
being disposed of together with a common judgment.
2. The important legal issues which have arisen for
consideration in these appeals are whether after the bifurcation/ ;.

c re-organisation of the State of Uttar Pradesh and creation of
the State of Uttaranchal under the U.P. State Re-organization
Act, 2000 (hereinafter referred to as the 'Re-organisation Act')
which was promulgated on 9.11.2000, the affairs of various
cooperative societies carrying out their business in both the
States at the time of re-organisation shall be governed by the·
D
U. P. State Cooperative Societies Act, 1965 (hereinafter referred
to as the 'UP Act') or by the Multi State Cooperative Societies
Act, 1984 (hereinafter referred to as the 'Multi-State Act') and
whether these societies would automatically become Multi State
Cooperative Societies with effect from 09.11.2000 i.e. the date
E of re-organisation of the State. This issue has emanated
because of an order dated 14.02.2001 passed by the Registrar
of Cooperative Societies to the effect that the U. P. Cooperative
Processing and Cold Storages Federation Limited, Lucknow
(in short the 'PACSFED') is deemed to be a Multi State '(

F Cooperative Society under Section 7 of the Multi-State Act. The
said order was the subject matter of the writ petitions out of
which the present appeals arise.
3. Brief facts of the case for the purpose of disposal of
present bunch of appeals are required to be stated first. The
G
PACSFED was registered on 25.11.1974 as apex cooperative
,I,
society under the provisions of the UP Act and the Rules framed
thereunder. The area of operation of the PACSFED was the
whole state of Uttar Pradesh. In the year 2000, the Re-
H
organisation Act was passed which came into force on
.
NARESH SHANKAR SRIVASTAVA V. 1195
STATE OF U.P. & ORS.

09.11.2000. By the operation of the said Act, the State of Uttar A
Pradesh was bifurcated and a new State of Uttaranchal (now
Uttarakhand) was created by carving out certain territories from
the State of Uttar Pradesh.
4. Due to the aforesaid re-organisation, the PACSFED is
taken to have become automatically a multi-state co-operative B
society on 09.11.2000 i.e. the date of re-organisation by virtue
of operation of Section 95 of the Multi-State Act. On 14.02.2001,
the Central Registrar of the Multi State Co-operative Societies
'{ issued a Registration Certificate granting registration of the
PACSFED under the Multi-State Act. Aggrieved by this c
decision, the Registrar of Co-operative Societies, Lucknow filed
a revision on 18.04.2001 before the Central Government under
Section 92 of the Multi-State Act challenging the issuance of
aforesaid Registration Certificate. However, on 06.02.2002 the
said revision was dismissed by the Central Government. D
5. The State of Uttar Pradesh and the Registrar, Co-
~
operative Societies, Uttar Pradesh on 22.05.2002 filed two Writ
Petitions bearing nos. 602 and 1710 of 2002 in the High Court
of Allahabad challenging the aforesaid order dated 06.02.2002
of the Central Government. The High Court by impugned E
judgment and order dated 10.11.2004 allowed the said writ
petition and quashed the Certificate of Registration dated
14.02.2001 and also the order of the Central Government dated
y 06.02.2002.
F
6. Feeling aggrieved by the aforesaid decision of the High
Court, the present special leave petitions have been preferred.
There were in total six appeals against the said decision of the
High Court. This Court vide its order dated 17.01.2008
dismissed the appeal bearing C.A. No. 291/2005 as withdrawn.
G
Another appeal bearing C.A. No. 290/2005 was dismissed for
_j
non-prosecution by this Court vide order dated 05.02.2009.
Therefore, only four appeals bearing Civil Appeal Nos. 292/293/
294 of 2005 and 1722 of 2005 are before us for final disposal.
7. Learned counsel for the appellant submitted that on H
1196 SUPREME COURT REPORTS . [2009] 7 S.C.R,

A account of the bifurcation of the State of Uttar Pradesh into two
i
States i.e. State of Uttar Pradesh and the State of Uttaranchal ,
the area of operation of the PACSFED extended to both the
States on and from the date when the State of Uttaranchal came
into existence L e. from 09. 11.2000 and thus the objects of
s PACSFED did not remain confined to one State and it extended
to both the States. By reason of extension of the area of
operation, the objects of PACSFED also automatically extended
to the aforesaid two States, as a consequence wl'fereof the
PACSFED automatically become a deemed multi-state
c cooperative society, registered under the Multi-State Act. It is
also submitted by him that the High Court recorded an illegal .
finding that the PACSFED as apex cooperative societies
operating in the State of U.P., shall continue to operate in two
States and these societies should have been governed by the
U P State Act, unless and until a joint decision was taken by the
0
two States and the byelaws of these societies were amended
accordingly, and, since the byelaws of the societies were not
amended and proper resolutions were not passed, it cannot be
said that the Multi-State Act would have started to occupy the
field.
E
8. Another contention placed before us by the appellant
was that the High Court erred in not considering the effect of
Section 95 of the Multi-State Act which takes complete care of
the situation arising out of reorganization of States on certain
F class of cooperative societies. l:le submitted that Section 67 of
the Re-organisation Act does not at all apply in the present case
as Section 95 ofthe MuLti-State Act already exists in the form of
a central law which is sufficient to take care of cooperative
_., societies which would become. Multi-State Cooperative
G societies from the day of reorganisation of State. He further
submitted that the cooperative societies are not created under
any Central Act or State Act butthey are created by the members
in accordance with the provisions of the Central or State
Cooperative Societies Acts, therefore, Section 67 of the Re-
organisation Act shall have no application. He next submitted
H
-
NARESH SHANKAR SRIVA$TAVA V. 1197
STATE OF U.P. & ORS. [DR. MUKUNDAKAM SHARMA, J.]

that Section 86 of the Reorganisation Act did not apply in the A
present case as Section 86 extends the ap'plication of State
laws of U.P. to the territories of newly carved out State of
Uttaranchal for a transitory period till the State of Uttaranchal
makes its own local laws and under Section 87 the appropriate
Government may make such laws within a period of two years. B
9. Learned counsel for the respondents contended that
the Multi-State Act is not applicable in the present case as the
affairs of societies formed before the Reorganisation of the Uttar
" Pradesh were still to be governed by the U.P. State Act. It is the
case of respondents that the PACSFED including the C
constitution of its Committee of Management was to be
governed by the relevant provisions contained in U.P. Act and
the Rules and Regulations of 1968 made thereunder. He
submitted that the High Court rightly held that the specific
provision would exclude the general provision by observing that o
all the provisions of the Multi-State Act shall stand ousted
because of the non-obstante clause contained in Section 93 of
the Re-organisation Act and the provisions of Section 93 of the
Re-organisation Act have an overriding effect on any law
containing inconsistent provisions. He argued that Section 67 E
of the Re-organisation Act has taken care of exigencies, events
pursuant to carving out of the new States from the parent State
of Uttar Pradesh. He submitted that the bye-laws of PACSFED
clearly mentioned that its area of operation "shall be whole Uttar
" Pradesh". No particular district or area has been mentioned,
and that under the objective and bye-laws, PACSFED can F
operate only in the area of State of Uttar Pradesh, whatever it
may be for the time being. Before the constitution of the State of
Uttaranchal (now Uttarakhand) by the Re-organisation Act, the
area falling under Uttarakhand was within the State of Uttar
Pradesh and on re-constitution some area was taken away and G
the area of Uttar Pradesh stood reduced. He stated that
according to the bye-laws, the area in operation of PACSFED
would immediately and automatically get confined to the new
territory of Uttar Pradesh and it would not permit any operation
in the territory of Uttarakhand. H
1198 SUPREME COURT REPORTS (2009] 7 S.C.R.-

A 10. After referring to various provisions of the Re-
organisation Act, the learned counsel for the respondents
pointed out that the laws which were in force at the time of re-
organisation would continued to operate and Part II of the Act
shall not be deemed to have affected any change in the
B territories to which existing laws of Uttar Pradesh were
applicable until otherwise provided by a competent legislature.
He further pointed out that so far as the U P State Act was
concerned, the territorial change in Part II of the Re-organization
Act would become effective only on and from 21.5.2003. Before
c this date, Part II of the Act was not having any impact on the UP
State Act and PACSFED could not become Multi State
Cooperative Society. After 21.5.2003, 14 member societies of
PACSFED in Uttaranchal would automatically become
registered under the Uttaranchal Cooperative Societies Act,
2003 (hereinafter referred to as 'Uttaranchal Act') by virtue of
0
Section 129 of the UttaranchalAct. Hence, even after21.5.2003,
the PACSFED did not become a Multi State Cooperative
Society. He submitted that neither the validity of the Uttaranchal
Act nor the fact of deemed registration of these 14 societies
under the UttaranchalAct has been challenged.
E
11. After referring to Section 67 of UP State Act, learned
counsel further submitted that where a body corporate
constituted under a State Act becomes an inter State body
corporate then the said body corporate shall continue to function
F and operate in those areas in respect of which it was functioning
and operating immediately before that day, subject to directions
of Central Government and until other provision is made by law.
In the instant case, after the Re-organisation Act has been
passed no further directions and law were made by State of
G Uttaranchal, therefore, the Multi-State Act would have no
application to PACSFED.
12. In view of the aforesaid submissions advanced by the
respective parties, it would be desirable to deal with and refer
to the various provisions of different statutes relevant and
H applicable to the matter at hand.
NARESH SHANKAR SRIVASTAVA V. 1199
STATE OF U.P & ORS. [DR MUKUNDAKAM SHARMA, J]

13, Section 7 of Multi-State Act which provides for the A
r registration of any Multi State Co-operative Society reads as
follows:
"7. Registration - (1) If the Central Registrar is satisfied -
(a) that the application complies with the provisions of B
-(
this Act and the rules;

(b) that the proposed multi-State cooperative society
~

J satisfies the basic criterion that its objects are to
I ... serve the interests of members in more than one
State; c
(c) that there is no other multi-State cooperative society
having similar area of operation and identical objects;
(d) that the proposed bye-laws are not contrary to the
provisions of this Act and the rules; and D
(e) that the proposed multi-State cooperative society has
~
reasonable prospects of becoming a viable unit, he
may register the multi-State cooperative society and
its bye-laws.
E
(2) Where the Central Registrar refuses to register a multi-
State cooperative society, he shall communicate the order
of refusal together with the reasons therefore, to such
number of the applicants and in such manner as may be
" prescribed. F
(3) The application for registration shall be disposed of by
the Central Registrar within a period of six months from
the date of receipt thereof by him:
Provided that if the Central Registrar is unable to dispose G
of the application within the period aforesaid, he shall make a
.. report to the Central Government stating therein the reasons for
his inability to do so, and the Central Government may allow
him such further period or periods as is considered necessary
to dispose of such application."
H
1200· SUPREME COURT REPORTS [2009] 7 S.C.R.

A Section 18 Multi-State Act provides for conversion of co-
operative society into Multi-State Cooperative Society which is
,
·quoted below:

"18. Conversion of cooperative society into multi-State
-
I

Cooperative Society-
8
(1) A cooperative society may, by an amendment of its
.,
bye-laws, extend its jurisdiction and convert itself into a
multi-State cooperative society:

Provided that no such amendment of bye-laws of a ,..
c cooperative society shall be valid unless it has been
registered by the Central Registrar.

(2) (a) Every proposal for such amendment shall be
forwarded to the Central Registrar.
D (b) If the Central Registrar, after consulting the Registrars
of Cooper;:itive Societies of·the States concerned, has
satisfied himself that such amendment fulfils the
requirement of sub-section (2) of section 9, he may register "
the amendment within a period of six months from the
E date of receipt thereof by him:
Provided that if the Central Registrar is unable to register
the amendment within the period aforesaid, he shall make
a report to the Central Government stating therein the
reasons for his inability to do so, and the Central
F Government may allow him such further period or periods
as is considered necessary to register the amendment.
(3) The Central Registrar shall forward to the cooperative
society a copy of the registered amendment together with
G a certificate signed by him and such certificate shall be
conclusive evidence that the amendment has been
registered. ;..

(4) Where the Central Registrar refuses to register an
amendment of the bye-laws of a cooperative society, he
H shall communicate the order of refusal together with the
.. NARESH SHANKAR SRIVASTAVA V. 1201
'.. STATE OF UP. & ORS. [DR. MUKUNDAKAM SHARMA, J.]

reasons therefore to the society in the manner prescribed A
within seven days from the date of refusal.
(5) (a) Once the amendment of bye-laws has been
registered by the Central Registrar, the cooperative society
shall, as from the date of registration of amendment,
become a multi-State cooperative society. B
(b) The Central Registrar shall forward to the cooperative
society a certificate signed by him to the effect that such
society has been registered as a multi-State cooperative
society under this Act and also forward a copy of the same to c
the Registrar of Cooperative Societies of the State concerned.
(c) The Registrar of Cooperative Societies referred to in
clause (b) shall thereupon make an order directing that
the society had, as from the date of registration by the
Central Registrar, ceased to be a society under the law · D
relating to co-operative societies in force in that State."
Section 95 of the Multi-State Act contemplates about the
future status of the societies functioning immediately before
the re-organisation of states:
E
"95. Cooperative societies functioning immediately
before re-organisation of States - (1) Where by virtue
. of the provisions of Part I of the States Reorganisation
Act, 1956, or any other enactment relating to reorganisation
of States, any cooperative society which immediately F
before the day on which the reorganisation takes place,
had its objects confined to one State becomes, as from
that day, a multi-State cooperative society, it shall be
deemed to be a mu/ti-State cooperative society
registered under the corresponding provisions of this G
Act and the bye-laws of such society shall, in so far as ~
they are not inconsistent with the provisions of this Act,
continue to be in force until altered or rescinded.
(2) If it appears to the Central Registrar or any officer
authorised in this behalf by the Central Government H
1202 SUPREME COURT REPORTS [2009] 7 S.C.R. '
....

A (hereafter in this section referred to as the authorised
officer) that it is necessary or expedient to reconstitute or
reorganize any society referred to in sub-section(1) the
Central Registrar or the authorised officer, as the case
may be, may, with the previous approval of the Central
B Government, place before a meeting of the general body
of that society, held in such manner as may be prescribed,
a scheme for the reconstitution or reorganisation, including
proposals regarding -
(a) the formation of new multi-State cooperative societies
c and the transfer thereto in whole or in part, of the assets
and liabilities of that society, or -
(b) the transfer, in whole or in part, of the assets and
liabilities of that society to any other multi-State cooperative '""'
society in existence immediately before the date of
D
that meeting of the general body (hereafter in this section
referred to as the existing multi-State cooperative society).
~

(3) If the scheme is sanctioned by a resolution passed by
a majority of the members present at the said meeting,
E either without modifications or with modifications to which
the Central Registrar or the authorised officer agrees, he
shall certify the scheme and upon such certification, the
scheme shall, notwithstanding anything to the contrary
contained in any law, regulation or bye-laws for the time
F being in force, be binding on all the societies affected by '
the scheme, as well as the share-holders and creditors of
all such societies.
(4) If the scheme is not sanctioned under sub-section (3),
the Central Registrar or the authorised officer may refer
G the scheme to such Judge of the appropriate High Court,
as may be nominated in this behalf by the Chief Justice
f
thereof, and the decision of that Judge in regard to the
scheme shall be final and shall be binding on all the
societies affected by the scheme as well as the
H shareholders and creditors of all such societies.
NARESH SHANKAR SRIVASTAVA V 1203
STATE OF U.P. & ORS. [DR. MUKUNDAKAM SHARMA, J.]
II

Explanation - In this sub-section, "appropriate High Court" A
means the High Court within the local limits of whose
jurisdiction the principal place of business of the multi-
state cooperative society is situated.
_, (5) Notwithstanding anything contained in this section,
where a scheme under sub-section (2) includes any B
proposal regarding the !ransfer of the assets and liabilities
of any multi-State cooperative society referred to in clause
(b) thereof, the scheme shall not be binding on such multi-
. State cooperative society or the shareholders and
creditors thereof, unless the proposal regarding such c
transfer is accepted by that multi-State cooperative society
by a resolution passed by a majority of the members
present at a meeting of its general body."
(emphasis added)
D
14. Sections 67 of the Re-organisation Act deals with the
continuance of existing body corporate when it provides :
->-
"67. General provision as to statutory Corporations.-
.....
( 1) Save as otherwise expressly provided by the foregoing E
provisions of this Part, where any body corporate
constituted under a Central Act, State Act or Provincial Act
for the existing State of Uttar Pradesh or any part thereof
has, by virtue of the provisions of Part 11, become an inter-
State body corporate, then, the body corporate shall, on F
and from the appointed day, continue to function and
operate in those areas in respect of which it was
functioning and operating immediately before that day,
subject to such directions as may from time to time be
issued by the Central Government, until other provision G
is made by law in respect of the said body corporate.

" (2) Any directions issued by the Central Government under
. sub-section (1) in respect of any such body corporate
shall include a direction that any law by which the said
body corporate is governed shall, in its application to that H
1204 SUPREME COURT REPORTS [2009] 7 S.C.R.

A body corporate, have effect subject to such exceptions
and modifications as may be specified in the direction."

(emphasis added)
Section 86 of the Re-organisation Act provides for the
B territorial extent of laws:

"86. Territorial extent of laws.-The provisions of Part II
shall not be deemed to have affected any change in the
territories to which the Uttar Pradesh Imposition of Ceiling
of Land Holding Act, 1961 and any other law in force
c immediately before the appointed day, extends or applies,
and territorial references in any such law to the State of
Uttar Pradesh shall, until otherwise provided by a
competent Legislature or other competent authority be
construed as meaning the territories within the existing
D State of Uttar Pradesh before the appointed day.
Section 93 of the Re-organisation Act is the non-obstante
clause:
93. Effect of provisions of the Act inconsistent with
E other laws.-The provisions of this Act shall have effect
notwithstanding anything inconsistent therewith contained
in any other law."
15. A perusal of the above-mentioned provisions makes it
crystal clear that Section 95 of the Multi-State Act will be squarely
F applicable to the case in hand. This provision addresses a
situation like the present one. It provides that where the object
of the cooperative society is confined to one State would
become from the date of reorganization of State, a Multi State
Cooperative Society by virtue of Part II of State Reorganisation
G Act and then it shall be deemed to be Multi State Cooperative
Society and the bye-laws of such Society shall continue to be in
force until altered.
16. It is to be kept in mind that Section 95 of the Multi-
H State Act has been incorporated to meet a particular situation.
NARESH SHANKAR SRIVASTAVA V. 1205
STATE OF U.P. & ORS. [DR. MUKUNDAKAM SHARMA, J.]

The said Section provides that it would be operative as a A
consequence of reorganisation of States and particularly when
any area or portion of area of the Society is bifurcated or divided
and then fell in the jurisdiction of two State administrations. The
idea is to obviate the administrative stalemate arising out of
creation of a new State and new administration. This section is B
independent of all other sections of the Act. The Multi-purpose
Co-operative Society has been defined as a Society registered
or deemed to be registered under the Act and includes a
/ National Co-operative Society. Sections 2, 4, 5, 6, 7 and 8 deal
with how a Multi-State Co-operative Society could be registered c~
under the Central Act. In other words, by voluntary acts of the
concerned persons a Multi-State Co-operative Society could
be formed if it satisfies the conditions laid down in the aforesaid
sections. As the definition of Multi-State Co-operative Societies
indicates, there are two situations envisaged as to how a Multi-
D
State Cooperative Society comes into being. One is registered
•· after observing formalities of Sections 4, 5, 6, 7 and 8 and the
other is deemed Multi-State Co-operative Societies as
envisaged under section 95 of the Central Act.
17. As noted earlier, Section 95 of the Multi-State Act takes E
care of a situation arising out of re-organisation of States of
certain class of co-operative societies. Indeed, the very rationale. ,.'
or legal justification of having 'such a provision fn the. statute
-! book is to provide continuity to those co-operative societies,
the objects of which were confined to one State immediately F
before the day on which the re-organisation takes place but as
from the day of the re-organisation of the State its object extends
to more than one State, by declaring that such co-operative
societies shall be deemed to be a multi state co-operative
societies, registered under the corresponding provisions of the
G
.. Multi-State Act. The very purpose of having this kind of provision
is to stop the applicability of a State Co-operative Societies
Act over more than one State as a State Act cannot have extra-
territorial operation and the multi-state co-operative societies
cannot be regulated by a State Co-operative Societies Act.
H
1206 SUPREME COURT REPORTS [2009] 7 S.C.R.

A 18. The learned counsel for the respondents vehemently
argued that in view of Section 67 of the Re-organisation Act,
Section 95 of the Multi-State Act has no application. However,
we do not find any merit in such contention as Section 67 of the
Re-organisation Act does not at all apply to the facts of the
s present case. Section 95 of the Multi-State Act already exists in
the form of a central law which takes care of and makes
provisions for such co-operative societies which as and from
the day of the re-organisation of a particular State become Multi
State Co-operative societies.
C 19. The word used in Section 67 of the Re-organisation
Act is "subject to such directions as may from time to time be
issued by the Central Government, until other provision is made
by law in respect of the said body corporate" which is of vital
significance. It gives an unmistakable impression that the need
D for a direction of the Central Government would arise only in
respect of the applicability of a State law to the body corporate
which by virtue of the re-organisation of State become inter-
state body corporate. This is quite evident from a reading of
sub-section (2) of $ection 67 of the Re-organisation Act. But
E when a central Act (in the present case the Multi-State Act)
already contains a provision in the form of Section 95 which
clearly embraces such co-operative societies within its fold
which as and from the date of re-organisation of the State
become multi-stafo cooperative societies, there is no legal
F requirement of issuing any direction by the Central Government
for making the Multi-State Act applicable.
20. So far as the contention regarding the applicability of
Section 86 of the Re-organisation Act is concerned, it would
not be applicable in the present case as Section 86 of the Re-
G organisation Act cannot affect the Multi-State Act which is a
central legislation. There is no denying of the fact that a central
law viz. Section 95 of the Multi-State Act already exists in the
statute book to govern and regulate the functioning of the
cooperative societies which as and from the date of
H reorganisation of the State of U.P. become multi-State
NARESH SHANKAR SRIVASTAVA V. 1207
STATE OF U.P. & ORS. [DR. MUKUNDAKAM SHARMA, J.]

cooperative societies. Similarly, Section 93 of the A
Reorganisation Act would also have non-application in the
present case since the aforesaid provision cannot override
Section 95 of the Multi State Act, which is a central Act.
21. In the case of Anand Mal v: State of Rajasthan, AIR
1962 Raj. 218, the High Court of Rajasthan, while interpreting B
Section 119 of the State Organisation Act, 1956 which is in pari
materia to Section 86 of the U.P. Act held that Section 119 of
the State Organisation Act would have no application to the
Central Acts.
c
22. Similarly, in the case of Mapusa Urban Cooperative
Bank Ltd. v: G.S. Patil, MANU/MH/034211998, the Bombay
High Court held that Section 95 of the Multi-State Act is an·
independent provision which resolves the situation arising out
of operation of law and avoids chaos and confusion arising out
0
of the reorganisation of a State.
23. Besides, we cannot lose sight of the fact that Section
18 of the Multi-State Act lays down a procedure for conversion
of a State cooperative society into a multi-State cooperative
society whereas Section 95 of Multi-State Act contained in E ·
Chapter XII deals with a specific situation in which certain
cooperative societies would become deemed multi-State
cooperative societies automatically by operation of law.
Therefore, the finding of the High Court that until the procedure
laid down for converting a cooperative society into a multi-State F
cooperative society is followed, the cooperative society would
continue to be a State cooperative society to be governed and
regulated by the provisions of U.P. Act, is not correct.
24. It has been contended by the respondents that in view
of Section 129 of the Uttaranchal Act which came into force in G
2003, 14 member societies of PACSFED in Uttaranchal would
automatically become registered under the Uttaranchal Act.
However, the said contention is legally untenable. Once the State
of U. P. was bifurcated by the Re-organisation Act which came
into force on 09.11.2000, Section 95 automatically got attracted. H
1208 SUPREME COURT REPORTS [2009] 7 S.C.R.

'
A . By virtue of Section 95 of the Multi-State Act, PACSFED
becomes a Multi-State Society. On 14.02.2001, when the
Central Registrar of the Multi-State Co-operative Societies
issued the Registration Certificate granting registration of the
PACSFED under the Multi-State Act, admittedly, the Uttaranchal
. B Act of 2003 was not in existence. Even otherwise, a State
legislation viz. Uttaranchal Act which has been enacted
subsequently cannot have an overriding effect over a central
law viz. the Multi-State Act. The Uttaranchal Act can govern and
regulate the cooperative societies whose objects extend to and
C apply within the State of Uttaranchal. So, the finding of the High
Court that with the enforcement of the Uttaranchal Cooperative
Societies Act, 2003, with effect from 21.5.2003, the Multi-State
Act shall not be applicable is erroneous. The byelaws of the
PACSFED have not been amended so far. The area of
operation of the PACSFED as laid down in its byelaws is still
0
the same as it was on the date of the reorganisation of the State
of U.P. Therefore, it would be legally impermissible to say that
now the area of operation of the PACSFED is confined to the
State of U.P. alone and that it has ceased to be a multi-State
cooperative society. As far as withdrawal of member-
E cooperative societies of the PACSFED operating in the State
of Uttaranchal is concerned, the deemed conversion of a
cooperative society into a multi-State cooperative society by
virtue of Section 95 of the Multi-State Act is an irreversible
process and the membership of a multi-State cooperative
F society in a particular State at a given point of time is only a
fortuitous circumstance on the basis of which a multi-State
cooperative society cannot automatically revert to assume the
character of a State cooperative society. Further, there is no
provision in the Multi-State Act which permits such automatic
G · conversion of a multi-State cooperative society into a State
cooperative society by operation of law. The only relevant
consideration for continuance of a multi-State cooperative
society as a multi-State cooperative society is that it should have
its objects not confined to one State and since the objects of
H the PACSFED still remain the same as it was immediately
NARESH SHANKAR SRIVASTAVA V. 1209
STATE OF U.P. & ORS. [DR. MUKUNDAKAM SHARMA, J.]

before the reorganization of the State of Uttar Pradesh, it shall A
be deemed to be a Multi-State co-operative society by virtue of
0

deeming provision of Section 95 of the Multi-State Act.
25. In view of the foregoing discussions the PACSFED is
a deemed multi State cooperative society registered under the
corresponding provision of the Multi-State Act, 1984 as and from 8
the date of the reorganisation of the State of Uttar Pradesh and,
therefore, the impugned judgment and order dated 10.11.2004
is liable to be set aside, which we hereby do.
26. Appeals are accordingly allowed.

8.8.8. Appeals allowed.