The main legal point established in the judgment is the discretionary power of the Government to grant exemption under Section 101 of the Co-operative Societies Act 1969, guided by public interest and subject to compliance with the relevant provisions of the Act.

A.K. Basheer, P.Q. Barkath Ali, JJ.

These two cases are being disposed of by this common judgment since the issue or question involved in them is one and the same:

2. The question:

"Is the general power of the Government to grant exemption under Section 101 of the Co-operative Societies Act 1969 circumscribed or restricted by the provisions contained in sub-clause (c) of sub-section (1) of Section 7 of the Act"?

To put it differently;

"Can the Government exempt a new Society from any of the provisions of the Act and allow it to carry on the same or similar activity or business of another existing Society in a particular area, in derogation of the powers of the Registrar under Section 12(5) of the Act ? The above question has cropped up for consideration in the following scenario.

3. The appellant, viz., Muthalamada East Ksheera Vyavasaya Co-operative Society Ltd., in Palakkad district is a registered Society engaged in the business of procurement and sale of milk. It is beyond controversy that the appellant-Society which was established in the year 1971 has its area of operation in Ward Nos.2 to 8 and 10 to 14 of Muthalamada Grama Panchayat. Ward No.9, the only other remaining ward in the above Panchayat, is allotted to Muthalamada (West) Ksheerodpadaka Sahakarana Sangham, another registered Society under the Act which is engaged in the same activity.

4. It appears that some of the residents/inhabitants of Chappakkad area in Ward No.11 were not entirely happy with the facilities and services made available to them by the appellant. According to these residents, they were being denied membership to the appellant-Society. They had a further grievance that they were not being paid adequate price for their milk. The nearest milk collection centre for them was situated 8 kms. away at Chappakkad. They had to carry the milk and supply the same to the collection centre before 4 a.m. every day, which resulted in great inconvenience and hardship to them. Further, they were denied welfare fund facilities available to the dairy farmers. Therefore the residents of Chappakkad wanted to form a new Society in that area. For this purpose they approached respondent Nos. 1 and 2 and submitted an application. On receipt of the application, the Deputy Director, Dairy Development, Palakkad, respondent No.2 herein, issued Ext.P1 communication to the appellant informing that necessary steps be taken to delink Ward No.11 from its area of operation, so that a new dairy development Society can be allowed to be established at Chappakkad.

5. In response to the above communication, appellant informed the Deputy Director that the whole idea was totally ill conceived and unwarranted and the proposal for delinking Ward No.11 from its area of operation was against the provisions contained in the Act and the Rules. In short, the appellant raised strong objection to the proposal for establishment of a new dairy development Society within its area of operation.

6. However the Government, after considering the request made by the residents of Chappakkad through respondent No.3, who is a resident of that area, found that the request made by them is eminently justified, in the light of the various difficulties highlighted by them and also in pubic interest. Therefore the Government issued Ext.P3 order invoking its power under Section 101 of the Act.

7. The said order was challenged by the appellant before the learned single Judge in a writ petition filed under Article 226 of the Constitution of India praying, inter alia, that a writ of certiorari be issued to quash the said order. It was further prayed that Ext.P1 order is not in consonance with the requirements of law for the purpose of exercising the power under section 101 of the Act and that the said order has been issued by misusing and abusing the statutory power vested with the Government.

8. The learned Single Judge held that the contentions raised by the appellant were wholly misconceived in as much as the e