Short Answer

Yes, members of a cooperative society can demand the removal of a faulty auditor and the appointment of a new one.

Detailed Explanation

Section 75 of the Gujarat Cooperative Societies Act, 1961 empowers the members of a cooperative society to demand the removal of an auditor. This section states that a general meeting of the society can pass a resolution for the removal of the auditor before the expiry of their term. The members must provide reasons for the removal and appoint a new auditor in their place.

Furthermore, Rule 77 of the Gujarat Cooperative Societies Rules, 1965 elaborates on the procedure for the removal of an auditor. According to this rule, the society must convene a general meeting and pass a resolution with a specific agenda item for the removal of the auditor. The members must provide valid reasons for the removal, and the new auditor must be appointed in accordance with the rules and procedures specified in the Act and Rules.

In practice, if the members of a cooperative society are dissatisfied with the performance or conduct of the auditor, they can collectively raise their concerns at a general meeting. The society can then follow the prescribed procedure under the Act and Rules to remove the faulty auditor and appoint a new one.

Real-world Scenarios

• Scenario 1: Members of a cooperative housing society notice discrepancies in the audit report prepared by the current auditor, indicating possible malpractice. They decide to convene a general meeting and pass a resolution for the removal of the auditor.

• Scenario 2: A cooperative credit society finds that the current auditor has failed to disclose material information in the audit report, leading to financial losses. The members demand the removal of the auditor and appoint a new one through a resolution at a general meeting.

• Scenario 3: A cooperative agricultural society faces delays in receiving the audit report from the current auditor, causing disruptions in financial planning. The members decide to remove the auditor and appoint a more efficient professional.

References

• Section 75 of the Gujarat Cooperative Societies Act, 1961: Official PDF

• Rule 77 of the Gujarat Cooperative Societies Rules, 1965: Official PDF