The main legal point established in the judgment is the limitation on the powers of the Government and Joint Registrar in interfering with the day-to-day administration of Co-operative institutions, emphasizing the autonomy and internal democracy of Co-operative societies.

1. Three candidates, who had appeared for the tests conducted by the Kottayam Co-operative Bank Ltd., for selection for appointment as Junior Clerks in the Bank, sent a representation dated 16-10-1985 to the Government alleging certain irregularities in the conduct of the tests. These representations were sent to the Minister for Co-operation and the Minister for Home Affairs. The Minister for Co-operation endorsed a note on receipt of the representation as follows:

"Call for an urgent report from the I. R. Kottayam within 15 days. Pending disposal of the petition, the J. R. may be directed to instruct the Society not to conduct the interview for making new appointments in the Bank."

This endorsement was made on 17-10-1985. The copy addressed to the Home Minister appears to have been forwarded to the Co-operative Department for remarks. It was received by the Co-operative Department on 6-11-1985. The endorsement made by the Minister for Co-operation was communicated on the same day to the Joint Registrar of Co-operative Societies, Kottayam. The Joint Registrar in bis turn issued an order on 25-10-1985 restraining the Bank from conducting interview for appointment of junior Clerks. The Vigilance Wing of the State Police had, in the meantime, moved in with agility and had taken files relating to the matter into custody. Petitioner challenges Exts. P3 order of the Government dated 17-10-1985 and Ext. P4 order of the Joint Registrar of Co-operative Societies dated 25-10-1985, directing the bank not to conduct the interview for appointment of Junior Clerks in the bank. Petitioner submits that the Government has no power to pass Ext. P3 order. He also submits that neither the Government, nor the Joint Registrar of Co-operative Societies has any power or competence to interfere with normal day to day functioning of the Bank in any manner. Counsel for the petitioner submits that the Bank welcomes any enquiry into the allegations of impropriety in effecting appointments in the bank. The only objection is to the interdict issued by the State Government in Ext. P3 and given effect to in Ext. P4 in the matter of effecting such appointments.

2. The short facts necessary for understanding the controversy involved in this Original Petition are the following: Petitioner-bank is one of the prosperous Co-operative institutions of Kottayam District. It had a staff of 54 employees. After the present Board took charge on 1-7-1982, the turn-over of business increased from Rs. 5 crores to Rs. 9 crores in 1984-85, and its profit increased from Rs. 4 lakhs to Rs. 10 lakhs. Additional staff was necessary to handle the enhanced business. Since regular appointment of additional staff has to be made with the sanction of the Department, this additional requirement of personnel was made by appointment of daily rated workmen. By order dated 5-2-1985, the Joint Registrar of Co-operative Societies sanctioned 9 more posts of Junior Clerks and 3 posts of peons. By Ext. P1 resolution dated 26-9-1985, it was decided to request for sanction of 10 more posts of Junior Clerks and 3 more posts of Peons. In the meantime, the Board of Directors by resolution dated 26-9-1985 authorised the President to appoint an Examiner and to arrange to the conduct of tests Applications were invited by Ext. P5 notification dated 20-7-1985 published in the Malayala Manorama. Applications were to be sent to the President by registered post along with the required certificates. 926 applications were received pursuant thereto. Only 323 applications were found to be in order. All the 323 persons were required to present for the test on 22-9-1985. The President had, in the meantime, entrusted Shri Thomas Mathew, Secretary of the Thiruvalla Taluk Rubber Marketing Co-operative Society, Mallappally, to set the question papers. 292 candidates had attended the test held on 22-9-1985. The conduct of the test was supervised by retired High School Assistants and Successful Candidates were