Supreme Court Held That Co-operative Societies Can Participate In Insolvency Resolution Subject To Compliance With The MSCS Act And Their Own Bye-laws.

The Supreme Court through its judgment dated 09.04.2026 in M/s Nirmal Ujjwal Credit Co-operative Society Ltd. vs. Ravi Sethia & Ors¹. held that the provisions of the Multi-State Cooperative Societies Act, 2002 (“MSCS Act”) do not per se prohibit an a multi state cooperative society to participate as a resolution applicant, as long as it is in conformity with Section 64 of MSCS Act, its own bye laws and Section 29A of the Insolvency and Bankruptcy Code, 2016.

The Court held that determination of whether an institution operates in the same line of business requires a substantial or predominant or closely related sameness in business activities, which must be determined in reference to its bye-laws and not revenue earned or profit/loss incurred in any business.

Footnote

^{1 Civil Appeal No. 11193 of 2025.}

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