SC upholds Vipul Chaudhary's ouster from Amul

Apex court gave its nod to Gujarat HC's judgment in favour of federation

The Supreme Court of India on Thursday upheld Gujarat High Court's previous verdict on ouster of Vipul Chaudhary as chairman of Gujarat Cooperative Milk Marketing Federation (GCMMF) through a no-confidence motion by the federation's board of directors.

Chaudhary, who was removed from the post of chairman of GCMMF by a no-confidence motion by the federation's board of directors, had appealed to the apex court against the removal. Chaudhary was removed from the post of GCMMF chairman in January 2014. A letter signed by GCMMF managing director RS Sodhi dated January 11, 2014 had said that Chaudhary ceased to be chairman after the Gujarat high court upheld the no-confidence motion passed against him.

In its order, the SC said, "The cooperative society registered under the Central or the State Act is bound to function as a democratic institution and conduct its affairs based on democratic principles."

"It is permissible to remove an elected office bearer through motion of no confidence, and since in many States, the relevant statutes have not carried out the required statutory changes in terms of the constitutional mandate, we feel it just and necessary to lay down certain guidelines," the order further read.

The process had begun when Fourteen Directors of the GCMMF Board submitted a requisition letter to GCMMF MD in October 2013, for arranging a Board meeting to discuss "no confidence motion" against the then chairman Chaudhary. Eventually, in a meeting dated December 5, 2013, fourteen out of sixteen Directors of the Federation had unanimously passed the no-confidence motion against Chaudhary.

Chaudhary challenged the order of Division Bench before the Hon’ble Supreme Court. However no relief was granted and as per direction of Supreme court, and Sabar Dairy chief Jethabhai Patel was elected as the new Chairman of GCMMF in August 2014.

The Supreme Court dismissed the appeal filed by Chaudhary and held that democratic principles have to be read into the statute pertaining to co-operative societies and, hence, there is a power to pass 'no confidence' motion.  "Though for different reasons, we agree with the view taken by the High Court of Gujarat. The contra views expressed by the High Courts of Andhra Pradesh, Bombay, Kerala and Punjab and Haryana are no more good law in view of the Ninety Seventh Amendment to the Constitution of India," the apex court observed.

It may be noted here earlier this month, the Gujarat Government has issued an order under Section 76/B of Gujarat Cooperative Societies Act removing Chaudhary as chairman of Mehsana District Cooperative Milk Producers Union Ltd in view of the corruption charges and financial irregularities amounting to about Rs 1,200 crore.

This order issued by the registrar of cooperative societies, Gujarat is subject to ratification by the SC.