HC dismisses Mehsana Dairy Union's plea against special audit

The Gujarat High Court today dismissed a petition moved by Mehsana District Cooperative Milk Producers' Union Ltd seeking quashing of an order of the Registrar of Cooperative Societies to conduct special audit of the union.
The court of Justice S G Shah dismissed the petition while allowing the Registrar to conduct a special audit under the provisions of the Section 84 (5A) of the Gujarat Co-Operative Societies Act, 1961.
When Vipul Chaudhary was the chairman of Mehsana dairy, also known as Doodhsagar Dairy, it was alleged to have indulged in a fraud to the tune of over Rs 707 crore.

Chaudhary was removed from the post in April 2015 on the charges of fraud, and was barred from contesting any election for three years.
The union had moved a petition seeking quashing and setting aside of the order of the Registrar of Cooperative Societies dated May 22, 2015, to conduct special audit to find out the wrongdoings in the union.
In its order passed Friday last week and made available today, the court said, "It seems that total scam or fraud may be quite more than Rs 717 crore and therefore there is certainly a need for special audit of the petitioner union to find out that whether there is actually any scam and if it is so then to what extent and how and who is responsible."

The court then dismissed the petition.

The union is alleged to having committed several irregularities, including sale of milk powder at lower rate, purchasing sugar at higher rate, expenses without tendering, scam by setting up new huge plant at Dharuhera (in Haryana) without actual need and without tender process, paying Rs 128 crore less to milk producers, among others.
The union challenged the order by submitting before the court that instead of audit, the registrar should conduct inquiry against persons responsible.
It said the registrar's order has been passed with malafide intention in disturbing the management of the union due to political rivalry.

Chaudhary, a Congress member, who later joined BJP, but was again seen cosying up with Congress, was removed from the post of chairman of Mehsana dairy following charges of irregularities for six years.
He fought a legal battle against his removal but the high court in its order in January 2016 had allowed him to contest elections after three years.