Point of Law: Section 6 of the Act provides for filing of an application with the Registrar in the prescribed form seeking for registration of a co-operative society.

ORDER :

1. Aggrieved by the permission being granted for establishment and registration of a Co-operative Society of which respondent No. 6 is the Chief Promoter in Siruguppa Tq, Tekkalkote Village, in spite of the petitioner Cooperative Society being registered and operating in the same place, the instant writ petition is filed.

2. Respondent No. 2 by his order dated 16.03.2022 bearing No. RCS/CRD/KME-8/ 111/2021-22 vide Annexure-C to the writ petition has accorded permission for registration of a new Co-operative Society as aforementioned. The said order is impugned in the instant writ petition.

3. The case of the petitioner is that, it is a society registered under the provision of the Karnataka Co-Operative Societies Act, 1959 and it is operating for the benefits of the farmers in the villages of Tekkalkote and Devi Nagar. When this is the position, respondent No. 6 has sought to register another Co-operative Society in the village Tekkalkote and respondent No. 2 has accorded permission for the same in violation of Rule 3-B(iii) and contends that the same is liable to be set aside.

4. Rule 3-B(iii) of the Karnataka Co-operative Societies Act, 1959 reads as under:

“3-B. Factors to be considered by Registering Authority at the time of registration - The Registering Authority, while according permission for the collection of initial share capital at the time of registration of a Cooperative Society, shall consider the following namely:

(i)..............

(ii)..............

(iii) overlapping of the existing similar Co-operative Societies.”

5. Thus, respondent No. 2 while according permission for a new society, has to consider the effect of an existing Co-operative Society in the area and decide whether it is advisable to accord permission for the commencement of a new Co-operative Society. In the instant case, reading of the impugned order reveals that the respondent No. 2 has considered the existence of the petitioner society operating in the same area and has recorded that, as the petitioner society is unable to cater to the needs of all the farmers in the area in which it is operating, it is desirable to accord permission for starting of a new Co-operative Society as requested by respondent No. 6.

6. However, it is contended by the petitioner that, once a Co-operative Society is operating in any area, then without hearing the already existing Co-operative Society permission for a new Co-operative Society cannot be granted.

7. Reliance is placed on the judgment of this Court in Parathamik Krushi Pattin Sahakari Sangh Niyamit and Others vs. State of Karnataka and Others, 2019 (2) Kar. L.J. 49. Paragraph Nos. 17 and 18 of the said judgment reads as under:

“17. What is to be noticed is that, Rule 3-B was not brought to the notice of the Coordinate Benches in both these matters. In fact, in Mahila Halu Utpadakara Sahakari Sangha (Supra), the Coordinate Bench has specifically observed that, the learned counsel for the petitioners has not pointed out any Rule of Section which stipulates that if a co-operative society dealing in a particular line of business or activity, another society also dealing with the same line of business or activity cannot be set up in the vicinity. If only Rule 3-B was brought to the notice of the Coordinate Bench, the decision would have been different.

18. In the light of the discussion made above, this Court is of the opinion that, in view of the introduction of Rule 3-B in the Rules, registering authority is required to consider the factors enumerated therein, even before permission for collection of initial share capital is accorded to the applicants. One of the factors being “overlapping of the existing similar Co-operative Societies” it would become incumbent upon the registering authority to call for objections or afford an opportunity of hearing to the existing credit co-operative society before according such permission. If registering authority is of the opinion that, having regard to the population or growt