Cooperative banks must ensure recruitment processes safeguard public interest through transparency and integrity by using independent agencies.

1. Complaints regarding the malpractices in the process of recruitment of officers and servants in the various Primary Agricultural Credit Societies Primary Credit Societies, Urban Cooperative Banks, Primary Cooperative Agricultural and Rural Development Banks, etc. are increasing day by day. This Court had occasion to come across several cases in the recent past, and in very many cases, Cooperative Department and the Government have interfered with the selection process, after conducting enquiries.

2. Government, in view of the wide spread complaints and criticism, from various quarters with regard to appointment in the Primary Cooperative Agricultural and Rural Development Banks, Urban Cooperative Banks, and various other banks, issued Ordinance 10 of 1995 directing those banks to effect appointments of officers and servants in their banks only from a select list prepared by the Public Service Commission. Ordinance was later replaced by Act 6 of 1995. S.80 of the Kerala Cooperative Societies Act was later amended adding sub-s. (3A) to that Section, which states that notwithstanding anything contained in the Act, or the rules made or orders issued thereunder or in the bye laws of any society relating to the recruitment and conditions of service officers and servants of societies, all appointments of officers and servants of the societies mentioned in the Schedule for which direct recruitment is resorted to shall be made from a select list of candidates furnished by the Kerala Public Service Commission. Sub-s. (3B) was also added which states that all appointments made by direct recruitment to the societies referred to in sub-s. (3A) on or after the 25th day of April, 1995 and before the date of publication of the Kerala Cooperative Societies (Amendment) Ordinance, 1995 (Ordinance No. 10195) shall be invalid.

3. Government had earlier issued circular No. 18191 because of large number of complaints with regard, to malpractices in the selection process adopted by various societies in the State. Circular lays, down various procedures, some of which are extracted below:
"(a) Applications for the posts shall be invited through Advertisement in leading dailies having wide circulation in the area.
Selection shall be made only after conducting written test and interview, allotting 100 marks for written test and 20 marks for interview.
(c) The Written test shall he conducted by an outside agency.
(d) False numbers should be assigned to the answer scripts.
(e) The conditions with regard to age limit qualifications, mode of appointment etc., as laid down in the rules framed under S.80, R.183, 186 and 187 of the KCS Rules shall be strictly followed.
(f) Ten percent of the vacancies should he reserved for candidates belonging to Scheduled Castes/Tribes."

4. Registrar of Cooperative Societies later vide circular No. 18194 clarified the expression 'outside agency' mentioned hereinbefore in clause (c). Clarification was necessitated because several instances came to the notice of the Registrar where written test was conducted by persons not having any expertise or any connection with the cooperative movement. This gave rise to serious allegations and long pending litigation. In the said circumstances, Registrar issued the following direction:
The Apex and Central Societies, societies with large volume of business should engage like Institute of Management in Government, Thiruvananthapuram,