The Registrar under the Karnataka Co-operative Societies Act is obligated to grant a hearing to the applicant before rejecting a request for permission to collect share capital for a proposed society, ensuring compliance with the principles of natural justice and proper assessment of economic viability.

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE WRIT IN THE NATURE OF CERTIORARI TO QUASH THE IMPUGNED ORDER DATED 11/04/2025 IN NO. AR-11/RSR/46/2025-26 PASSED BY THE 2ND RESPONDENT VIDE ANNEXURE-E. TO ISSUE WRIT IN THE NATURE OF MANDAMUS DIRECTING THE RESPONDENT NO. 2 TO GRANT PERMISSION TO FLOATING OF THE COLLECTION OF THE SHARE AMOUNT FOR PRE-REGISTRATION OF THE SOCIETY IN THE NAME OF THE PROPOSED AVAJIKARA MAHARAJ VIVIDODDESH PRATHAMIK GRAMEEN KRUSHI SAHAKARI SANGH NIYAMIT, HIDAKAL, TALUK. RAIBAG, DIST. BELAGAVI AT HIDAKAL BY ALLOWING THIS WRIT PETITION IN THE INTEREST OF JUSTICE AND ETC.,

THIS WRIT PETITION, COMING ON FOR PRELIMINARY HEARING THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

ORAL ORDER

(PER: THE HON'BLE MR. JUSTICE M.NAGAPRASANNA)

1. The petitioner is before this Court calling in question an order dated 11.04.2025, 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 conten