Restrictive reading of same-line-of-business clause under co-operative law, with bye-laws governing permissible investment scope.

Section 64(d) of the Multi-State Co-operative Societies Act, 2002 was treated as a restrictive investment control, with "any other institution in the same line of business" construed by reference to a society's bye-laws. The inquiry focused on the objects and functions authorised by the bye-laws; the society was regarded as primarily financial and member-oriented, and its agro-based processing clause did not extend to manufacture of man-made fibre or viscose textiles. An amended investment clause did not alter the object clause or establish sameness of business. The appeal was ultimately permitted to be withdrawn, and no final merits adjudication was made.

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Issues: Whether the phrase "any other institution in the same line of business" in Section 64(d) of the Multi-State Co-operative Societies Act, 2002 is to be construed narrowly by reference to the bye-laws of a multi-State co-operative society; and whether the appeal could proceed on the merits after the appellant sought withdrawal.

Analysis: The expression "same line of business" was read as a restrictive standard intended to prevent open-ended and dubious investments by a multi-State co-operative society. The relevant inquiry was held to turn on the objects and functions stated in the society's bye-laws, which govern the nature and scope of its permitted business activities. On that basis, the society's predominant activity was treated as financial and member-oriented, while its agro-based processing clause did not extend to industrial manufacture of man-made fibre or viscose textiles. The attempted reliance on the amended investment clause did not alter the object clause, and therefore did not establish sameness of business. The matter was, however, ultimately permitted to be withdrawn, and no final adjudication on the merits of the appeal was returned.

Outcome: The appeal was dismissed as withdrawn.

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