The Karnataka High Court held that the application for registration of a cooperative society cannot be rejected merely because a similar society exists in the area.

The petitioner submitted an application for registration of the society under the Karnataka Co-operative Societies Act, 1959. The respondent No.2 (assistant registrar) initially sent a report, and then respondent No.3(deputy registrar) requested a decision on the application. However, respondent No.2 ultimately rejected the application, citing the existence of a similar society in the area.

A Bench of Justice Hemant Chandangoudar said, “The Co-ordinate Bench of this Court has categorically held that the registration of a Co-operative Society in the same area cannot be denied merely on the existence of the similar co-operative society, and the registration has to be considered in light of the provisions contained in Section 7 and Rule 3B of the Rules. Therefore, the impugned order passed by the respondent No.2 is contrary to the provisions contained in Section 7 and Rule 3B of the Rules.”

Advocate Neelendra D. Gunde appeared for the Petitioner and Advocate V.S. Kalasurmath appeared for the Respondents.

The petitioner challenged this rejection, arguing that there is no bar on the number of cooperative societies that can be registered in an area, as determined in a previous case.

The Court held that while there is no requirement to indicate the existence of rival societies, certain factors such as population, economic feasibility, and overlapping with existing societies should be considered by the Registrar.

The Court reiterated that registration cannot be denied solely based on the existence of a similar society. Instead, it should be evaluated according to Section 7 and Rule 3B of the Rules. The Court added, “The issue is whether registration of the co-operative society in the area where similar co-operative society is existing can be considered, was examined by the co-ordinate Bench of this Court in W.P. No.104197/2021, wherein it is held that 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.”

Consequently, the Court quashed the impugned order and directed the respondents to reconsider the application within two months in line with the relevant provisions of the Act and Rules.

Cause Title: Ashwin v. The State of Karnataka & Ors., [2024:KHC-D:2541]


Petitioner: Advocates Neelendra D. Gunde, Srinivas B. Naik

Respondents: Advocate V.S. Kalasurmath