The Supreme Court has ruled that two sugarcane growers’ cooperative societies in Udham Singh Nagar cannot be treated as multi-state cooperative societies after their reorganisation was completed under the Uttar Pradesh Reorganisation Act, 2000, Lawyer E News reported.
In a judgment delivered on March 10, 2026, a bench comprising Justices P. S. Narasimha and Alok Aradhe set aside the earlier decision of the Allahabad High Court and allowed appeals filed by the Registrar of Cane Cooperative Societies and the state government.
The case involved the Sugarcane Growers Cooperative Societies at Bajpur and Gadarpur. Both societies were originally registered under the Uttar Pradesh Cooperative Societies Act, 1965 when the area was part of undivided Uttar Pradesh. After the creation of the new state of Uttarakhand in 2000, parts of their operational areas fell in two different states.
Following discussions between officials of Uttar Pradesh and Uttarakhand in 2001, the societies were reorganised by removing villages that fell in Uttar Pradesh, bringing their entire area of operation within Uttarakhand. The changes were approved through general body resolutions and administrative orders issued between 2002 and 2003.
However, a farmer from Suar village challenged the reorganisation, arguing that under Section 103 of the Multi-State Cooperative Societies Act, 2002 the societies should automatically be treated as multi-state cooperatives after the state bifurcation. The Allahabad High Court accepted this argument in 2007 and directed that elections be held under the Central Registrar for multi-state cooperatives.
The Supreme Court disagreed, stating that a legal provision that creates a “deeming” situation cannot undo actions that had already been lawfully completed under another law. The bench noted that the reorganisation of the societies had been carried out under Sections 87 and 93 of the Reorganisation Act, with the consent of both states and before the 2002 law came into force.
The court also observed that a legal fiction in law must be applied only for the purpose for which it was created and cannot be extended beyond its limits.
After examining the by-laws of the societies, the bench found that their objectives were limited to protecting the interests of local sugarcane growers and did not indicate any intention to operate across state boundaries. Therefore, the conditions required to classify them as multi-state cooperatives were not met.
With this finding, the court set aside the High Court’s judgment of March 14, 2007, and upheld the earlier order that dismissed the challenge to elections conducted under state cooperative laws. Authorities in Uttarakhand have been directed to proceed with elections to the two societies under the state cooperative framework.
