SC on Section 64 MSC Societies Act & IBC – Eligibility of Cooperative Society for Resolution Plan
Few facts on the context of the judgment –
On 3.8.2023, the Government had amended Section 64 of the Multi State Cooperative Societies Act 2002 and permitted investment of its funds in the shares, securities or assets or “any other institution in the same line of business”.
Accordingly, the appellant has amended its bye laws.
The appellant submitted its resolution plan for the corporate debtor.
However, the Resolution Professional has declared the appellant as ineligible.
In that context, the question was whether the corporate debtor is in the same business line of the appellant – society.
It was HELD that although the activities of both may broadly fall under the textile sector, still the actual nature of the business of corporate debtor is man-made fibre / viscose-based textiles which is distinct from the agro-based processing.
The crux of the matter is – whether the cooperative society is eligible to submit its resolution plan in the CIRP of Morari Textiles Ltd on the ground that its bye laws do not permit investment in the corporate debtor.
The appellant is running textile mill at Nagpur.
Judgment dated 9.4.2026 of the Supreme Court of India in Civil Appeal No.11193 of 2025 of M/s. Nirmal Ujjwal Credit Cooperative Society Ltd. Vs. Rajiv Sethia and others
