A competing co-operative society lacks locus standi to challenge another's registration unless it suffers a legal wrong, underscoring the principle that competition must be encouraged.

ORDER :

M.NAGAPRASANNA, J.

The petitioner is before this Court, calling in question an order 17.10.2025, by which permission for collection of share amount in the stage of pre-registration of Society, is declined.

2. The learned counsel, Miss Sanjana S. Mudhol appearing for the petitioner, submits that, in plethora of cases, the Coordinate Benches of this Court has passed several orders, which would enure to the benefit of the petitioner. The orders so passed, are as follows:

W.P.NO. 104197/2021

“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").

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 Nos.5 and 6 with the 4 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 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 Karnata