Since multi state cooperative societies act, 2002 is a State Subject (Entry 32 of List It of Seventh Schedule to Constitution, i.e. State List), the cooperative societies formed under State Acts have to restrict their activities to only one State. This hinders growth of cooperative societies. Hence, Multi State Cooperative Societies Act was passed in 1942. It was later replaced by 1984 Act. This multi state cooperative society act ,1984 Act is now being replaced by 2002 Act. The 2002 Act has already been passed but has not yet been made effective. The 2002 Act makes special provision for registration and functions of Federal Cooperative Societies.Provided also that so co-opted directors shall not have power to vote in the election of the office bearers or represent the multi State co-operative society in any other multi state cooperative society Provided also that a person who has lost in election to the board shall not be co-opted as director in the board on casual vacancy or otherwise Provided also that one seat shall be reserved for the Scheduled Castes or
the Scheduled Tribes and two seats for women in the board of a credit cooperative society consisting of individuals as members and having members from such class or category of persons According to case details, the petitioner, Jagdhish Rochani, had taken a loan of Rs 7 lakh in 1999 from one Unnati Cooperative Bank Limited (UCBL), registered under the Gujarat Cooperative Societies Act, 1961. Since, Rochani was not able to pay the monthly installments, the UBCL had attached his property.

The UCBL later in 2006 got merged with Cosmos Cooperative Bank Limited (CCBL), a multi schedule bank registered under the Multi-State Cooperative Societies Act, 2002. CCBL in September 2009 issued notice for auction of property as he had defaulted on monthly repayments. The Bill amends the multi state cooperative societies Act, 2002, which regulates multi state cooperative societies i.e. cooperatives which serves the interest of members in more than one state. This includes federal cooperative societies whose membership is available only to a cooperative society or a multi state cooperative society and 21 national cooperative societies specified Inspection of books account in Multi State Cooperative Society.