(PER: THE HON'BLE MR. JUSTICE M.NAGAPRASANNA)
2. The learned counsel, Miss Sanjana S. Mudhol
petitioner. The orders so passed, are as follows:
"The petitioner, which is a Co-operative Society,
has presented this petition challenging the order by
which the Assistant Registrar has permitted
registration of the 5th and 6th respondents as a Co-
operative Society under Section 7 of the Karnataka
Co-operative Societies Act, 1959 (for short, 'the KCS
Act").
NC: 2025:KHC-D:14900
HC-KAR
2 It is the specific case of the petitioner-society
that the Chief Promoters of 5th and 6th respondents
were all members of the petitioner-society and they
had made an application and they had promoted the
formation of the 5th and 6th respondents and sought
for its registration. The averment in the writ petition
in this regard is as follows:
"It is submitted that, the respondent
Nos.5 and 6 who are the chief promoters of
their respective proposed society and other
promoters with them all are the members of
the petitioner Society alone.
It is submitted that, the list of
proposed members submitted by the
respondent are almost all the members of
the petitioner society. Besides being so all
the proposed members even including the
chief promoter and promoters aiso members
as well as taken loan on different heads from
the petitioner society being members of it.
The majority of the members of the
proposed societies are defaulters with the
petitioner society."
3. It is thus clear that the petitioner-society is
aggrieved by a faction of its members in deciding to
form a new Co-operative Society and seek for its
registration. At the outset before considering the
contentions advanced by the petitioner on the merits
or demerits of the registration made by the
authorities, it would have to be essentially decided as
to whether the petitioner-Society as locus standi the
question there is a registration of another Co-
operative Society.
4. The learned Senior Counsel Sri Gurudas
Kannur contended that the petitioner-Society has a
right to challenge the registration granted in favour
of the 5th and 6th respondents since they would also
be operating within the same jurisdiction and this
would not make the respondent Nos.5 and 6 viable.
5. He also contended that the registration if
permitted. would directly lead to an unhealthy
NC: 2025:KHC-D:14900
HC-KAR
atmosphere and would be against the principles of
co-operative moment. He sought to highlight that
one of the consideration for registering as Society
was the prevention of overlapping of jurisdictions of
similar co-operative Society as envisaged under Rule
3-B(iii) of the Karnataka Co-operative Societies
Rules, 1960 (for short, 'the Rules, 1960').
6. He also sought to contend that if the entire
process of registration was examined, it would be
clear that the same had been done in gross violation
of the circulars issued by the Government.
7. The learned Senior Counsel also made a
submission that the question of locus standi should
not be gone into since the writ petition filed by the
petitioner-Society on an earlier occasion had been
entertained by this Court and infact the writ petitions
were allowed and the matters were remanded to the
registering authority at the instance of the petitioner-
society, to reconsider the question of registration of
respondent Nos.5 and 6.
8. Learned Senior counsel places reilance on the
decision of a co-ordinate bench of this Court passed
in the case of Prathamik Krushi Pattin Sahakari
Sangh Niyamit, Chamakeri of others vs. The State of
Karnataka and others, reported in 2019 (2) KLJ 49.
9. Learned counsel Sri Mallikarjunswamy B.
Hiremath, appearing for respondent Nos.5 and 6
sought to support the order passed in their favour.
He also raised the ground of lack of locus standi of
the petitioner-Society to challenge the registration of
the 5th and 6th respondents and he placed strong
reliance on the Judgment rendered by the Hon'ble
Supreme Court in the case of Jasbhai Motibhai Desai
v. Roshan Kumar Haji Bashir Ahmed and others,
reported in (1976) 1 SCC 671.
10. As stated above, the primary question to
be considered is as to whether a rival Co-operative
Society
possesses the locus standi to question the
registration of a competing co-operative Society.
NC: 2025:KHC-D:14900
HC-KAR
11. It is to be borne in mind that the Karnataka
Co-operative Societies Act, 1959 (for short, 'the Act')
was enacted with the objective to promote voluntary
formation of autonomous functioning, democratic
control and professional management of Co-
operative Societies. The objective behind forming of
a co-operative moment, is essentially to encourage
the co-operative moment which would result in
common benefit to all the members who work
collectively. The very essence of the Co-operative
moment is to encourage formation of the co-
operative societies.
12. It is for thus precise therein, there is no bar
on the number of co-operative Societies that can be
registered in an area. The Act essentially seeks to
regulate the registration of a co-operative society
and the manner in which the co-operative societies
are to be managed and also in ensuring the rights
and liabilities of the members are protected.
13. Section 6 of the Act provides for Bling of
application with the Registrar in the prescribed form
seeking for registration of a co-operative society. The
applicants are required to furnish all such information
as required by the Registrar. One of the
requirements is that, in respect of a co. operative
Society which has the object of creation of funds to
be lent to its members, is that of the applicants
should reside in the same village or the town or in
the proposed area of co. operation of the co-
operative society.
14. There is absolutely no requirement of the
society of the applicant to indicate the existence of
any rival society in the area within which it intends to
operate. On the basis of the information furnished by
the promoters, the Registrar is required to be
satisfied that the proposed Society has a reasonable
chance of success and would be economically viable
and if he so satisfied, he may register the society.
15. No doubt, the Registrar is required to take
into consideration certain factors such as population
in the area of the operation of the proposed co-
operative society, the assessment of economic and
NC: 2025:KHC-D:14900
HC-KAR
financial feasibility, like collection of share, funds
from the shareholders and also the overlapping of
the existing similar co-operative societies.
16. The factors prescribed under Rule 3-8 of the
Rules, 1960 are essentially factors, which would aid
in determining whether the proposed society has a
reasonable chance of success and is likely to be to
economically viable. It is for the applicant to satisfy
the financial viability and the likelihood of chances of
success of the proposed society by production of
relevant material.
17. By the very nature of the rule, it is obvious
that a rival competing co-operative society would be
able to establish the negative i.e., the proposed
Society cannot succeed or cannot be financially
viable. Obviously, every competing Society would put
forth the plea that the proposed Society would not be
financially viable only to protect its own turf and
prevent kind of competition. It is quite probable that
an existing society would want to create or maintain
a monopoly and would not like any competition or
the probability of a competitor eating into its
business.
18. The provisions of the Act and Rules are
designed to enable the Registrar to satisfy himself
regarding the financially viability and likelihood of a
reasonable chance of success of the applicant society
basis and for this purpose the only criteria would be
the material produced by the applicant If the
Registrar is satisfied that the proposed applicant
meets the prescribed criteria, registration cannot
normally be refused.
19. It is also relevarit to notice that the appeal
that is provided under S. 106 against an order
passed under Section 7 of the Act can obviously
relate only to a refusal to register. The provisions for
filing of an appeal does not provide for filing of an
appeal by any person or by an aggrieved person.
Section 106 merely states that an appeal would lie
against an order passed under S. 7 of the Act. Since
in the matter of registration, the lis can only be with
the applicant and the Registrar and no other person
NC: 2025:KHC-D:14900
HC-KAR
or entity would have the lis and consequently have a
right to prefer an appeal.
20. It is to be stated here that there cannot be
any person aggrieved by the registration of the co-
operative society. This is fundamentally because the
Act does not give any semblance of right to any
other person to have a say in the registration of
another co-operative society. It is therefore clear
that the petitioner being a competing co-operative
society, would have absolutely no locus standi to
question the registration of the co-operative society.
21. The Judgment relied upon by the learned
Senior courisel in the case of Parathamik Krushi
Pattin Sahakari Sangh Niyamit and others v. The
State of Karnataka and others, reported in 2019(2)
KLJ 49 can also be no avail because in that case this
Court did not examine whether a rival competing co-
operative society had the locus standi to challenge
the registration of another co-operative Society. No
doubt, in that case, the Court has stated that
registering authority is required to hear the existing
credit co-operative Society also at the time of
registration. However, that was a case in which the
Court was examining whether the Assistant Registrar
of co-operative societies was right in permitting the
respondent Nos.5 and 6 societies therein to collect
initial share funds. In that decision, there is
absolutely no examination of the legal right of an
existing co-operative society to challenge the
registration of another co-operative society.
22. The reliance placed on Rule 3-B of the Rules,
1960 regarding the overlapping of the existing
similar co-operative society as a factor to be
considered by the registering authority in order to
confer locus on the petitioner-society cannot also be
accepted. The factor of overlapping of existing similar
co-operative societies is to be considered by the
registering authority so as to only satisfy him
regarding the financial viability of the proposed
society. If the registering authority is satisfied that
the proposed society has a reasonable chance of
success and can be financially viable, it would be
NC: 2025:KHC-D:14900
HC-KAR
permissible for him to grant registration
notwithstanding the fact that there exist similar co-
operative societies in the same area of operation. It
is to be kept in mind that allowing one co-operative
society to oppose the creation of another co-
operative society would basically be against very
essence of the co-operative moment.
23. On the other hand, the Judgment relied upon
by the learned counsel for the respondent Nos.5 and
6 stated supra, would be aptly applicable to the
present case. The Hon'ble Supreme Court in
paragraph No.36 has stated as follows:
36. .....To have a "standing to sue",
which means locus standı to ask for relief in
a court Independently of a statutory
remedy, the plaintiff must show that he is
injured, that is, subjected to or threatened
with a legal wrong, Courts can intervene
only where legal rights are Invaded. "Legal
wrong" requires a judicially enforceable right
and the touchstone to judiciability is injury
to a legally protected right. A nominal or a
highly speculative adverse affect on the
interest or right of a person has been held to
be insufficient to give him the "standing to
sue" for judicial review of administrative
action. Again the "adverse affect" requisite
for "standing to sue" must be an "illegal
effect". Thus, in the undermentioned cases,
it was held that injury resulting from lawful
competition not being a legal wrong, cannot
furnish a "standing to sue" for judicial relief."
24. This enunciation of the law by the Hon'ble
Supreme Court makes it clear that the petitioner-
society has no suffered a legal wrong so as to
empower it to approach this court. I am therefore of
the view that the petitioner has no locus standi to
challenge the registration of respondent Nos.5 and 6.
The writ petition is therefore dismissed."
NC: 2025:KHC-D:14900
HC-KAR
"The petitioner who intends to establish a co-
operative society submitted an application with the
3rd respondent seeking permission for collection of
share amount. Based on the report submitted by the
Sale Officer, respondent No.3 rejected the proposal
stating that existing societies are likely to be affected.
Hence, this petition.
2. Heard the learned counsels for the parties.
3. The petitioner submitted an application only
for permission to collect shares with an intention to
establish a co-operative society and at this stage
respondent No.3 ought not to have rejected the
application since the question of economic viability
and chances of success of the co-operative society to
be established is a matter, which requires to be
considered at the time of registration.
4. Rule 3 of the Karnataka Co-operative
Societies Rules, 1961, deals with formalities for
registration and sub-rule (3) states that the registrar
on being satisfied that the proposed society has
reasonable chances of success and is going to be
economically viable may permit the chief promoter to
collect such amount of share capital from such
number of persons intending to become the members
of the proposed society within such period as he may
specify. In other words, the registrar is under an
obligation to hear the petitioner to satisfy himself that
the proposed society has reasonable chances of
success and is going to be economically viable.
5. In the instant case, respondent No.3 without
giving an opportunity of hearing to the petitioner to
satisfy that the proposed society has reasonable
chances of success and is going to be economically
viable, has rejected the application and the same is in
violation of principles of natural justice.
6. Accordingly, the writ petition is allowed. The
impugned order dated 22.12.2023 passed by the 3rd
respondent at Annexure-E is hereby quashed.
7. Respondent No.3 to grant permission to
collect the of share amount for pre-registration
- 10 -
NC: 2025:KHC-D:14900
HC-KAR
Vividhoddesha Prathamik Grameena Krushi Sahakari
Sangha Niyamita, Hombaradi, Nippani talulka, subject
to petitioner satisfying other requirements of law,
after providing an opportunity of hearing to the
petitioner.
8. Petitioner to be present before respondent No.3
on 20.02.2024 at 11.00 a.m. without awaiting for
further notice from respondent No.3."
"Heard the learned counsel for the petitioner
Miss.Sanjana S. Mudhol and the learned HCGP for the
respondents.
2. The petitioner is an agriculturist and permanent
resident of Arabyanwadi village, Chikkodi takuk,
district Belagavi. He was not enrolled as member of
any of the Primary Co-operative Societies. The
petitioner and other similarly situated farmers have
called for a Gram Sabha meeting at Arabyanwadi
village to address their grievances and problems
suffered by the farmers in the village and therefore,
decided to form a society in the name of Shri
Halsiddeshwar Vividodesh Prathmik Grameen Krushi
Sahakari Sangh Niyamit, Arabyanwadi to the welfare
of the farmers in the village.
3. In view of the same, the petitioner made a
representation to respondent No.2 on 17.10.2023 to
grant permission for floating the share collection from
the eligible farmers for registration of the Co-
operative Society in the name of Shri Halsiddeshwar
Vividodesh Prathmik Grameen Krushi Sahakari Sangh
Niyamit, Arabyanwadi. Respondent No.2 sent a letter
to the Co-operative Inspector requesting him to
submit a report regarding economic viability of the
proposed society by a letter dated 08.11.2023 without
hearing the petitioner or notifying the petitioner. The
Co-operative Inspector submitted a report which was
also without notice and knowledge of the petitioner
and based on the said report, respondent No.2
without hearing the petitioner passed the impugned
order and rejected the proposal for grant of floating of
the share collection to the proposed permission of the
- 11 -
NC: 2025:KHC-D:14900
HC-KAR
society by order dated 22.12.2023, which is impugned
herein.
4. It is contended by the learned counsel for the
petitioner that respondent No.2 has rejected the
proposal for floating of the share collection only on
the reason that it is not viable and there could be
overlapping of the society, that there are already five
societies registered in the same area. Therefore, the
question of the present society being successful for
overlapping other Co-operative Societies already
existing with the same qualities which is against the
guidelines prescribed by NABARD.
5. Learned counsel for the petitioner contends that
the said reasoning provided by respondent No.2 is
arbitrary, illegal and unsustainable. It is without
application of judicial mind. There is no such
requirement forthcoming under the Act or the Rules
for permitting floating of shares as to there being a
chance of success of Co-operative Society and
economic viability. There is no application of mind by
the respondent while passing the impugned order and
is without even hearing and notifying the petitioner
has out rightly rejected the proposal for floating of
share collection for formation of the society.
6. Learned counsel for the petitioner relies upon
the judgment of a Co-ordinate Bench of this Court in
WP No. 100493/2024 dated 06.02.2024 wherein in
similar matter on similar grounds the Assistant
Registrar of Co-operative Societies has rejected the
application without giving an opportunity to the
petitioner to satisfy the requirement and chances of
success and viability. The writ petition came to be
allowed. Another judgment has been also relied by
the learned counsel for the petitioner in WP
No.104197/2021 which also goes in favour of the
petitioner for the reason that while considering the
application for economic viability and success of the
floating of shares, the respondent may not look into
the existence of societies or viability of the other Co-
operative Societies. It is only on the basis of
information furnished by the promoters that the
Registrar is required to be satisfied on the proposed
floating of shares by the Society to have reasonable
- 12 -
NC: 2025:KHC-D:14900
HC-KAR
chance of success and economic viability that is
required to be satisfied which has to be considered by
the Registrar, which is not been done in the present
case.
7. It is also not the case of the respondent that
there are other rival Co-operative Societies which
have filed any complaint or objection to the floating of
shares of the present petitioner or formation of the
societies. Under these circumstances, there is force in
the argument put forth by the learned counsel for the
petitioner and is appreciated by this Court for allowing
the petition. Hence, the petition is required to be
allowed. Accordingly, it is allowed. Hence, I pass the
following order:
ORDER
i) The petition is allowed.
ii) The impugned order dated 22.12.2023 in
No.AR-11/RSR/117/2023-24 passed by
respondent No.2 vide Annexure-C is hereby
quashed.
iii) The respondent is directed to collect the share
amount for floating of the shares of society for
registration subject to the petitioner satisfying
other requirements of the law and providing an
opportunity to the petitioner before passing any
such orders."
3. In the light of the orders of the Coordinate
Benches (supra), the petition deserves to succeed.
4. For the reasons aforementioned, I pass the
following:
ORDER
i. Petition is allowed.
- 13 -
NC: 2025:KHC-D:14900
HC-KAR
ii. The impugned order dated 17.10.2025 passed
by the 2nd respondent at Annexure-B, is hereby
quashed.
iii. Respondent No.2 to grant permission to collect
the share amount for pre-registration of
Society in the name of the proposed Shri
Ramlingeshwar Vividoddesh Prathmik Grameen
Krushi Sahakari Sangh Niyamit, Shindoli, Tq:
Belagavi Dist.: Belagavi, subject to petitioner
satisfying other requirements of law, after
providing an opportunity of hearing to the
petitioner.
iv. Petitioner to be present before the respondent
No.2 on 03.12.2025 at 11.30 a.m., without
awaiting for further notice from respondent
No.2.
Sd/-
(M.NAGAPRASANNA)
JUDGE
AC/CT-ASC
