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2. Nalgonda-Rangareddy District Union cleared dues of Rs. 13,000.00 crores in six years and the mother dairy is collecting one lakh litres of milk from Nalgonda-Rangareddy districts per day. The union is selling 1.40 lakhs of litres of milk every day. It is making milk powder, which is popular. The mother dairy is extending various subsidies to farmers for feed, pesticides, fodder and seeds. There are 700 milk collecting centers and 364 societies in the two districts. The 8 district unions are controlled or managed by non-congress people and the State resorted to an inelegant legislative device to take direct control of the district unions, which is demonstrably colourable exercise of legislative power.
7. Expropriation of the societies by throwing out validly elected people is arbitrary, capricious and in violation of Article 14 of the Constitution. The lawless law to obliterate the societies is not a normal legislative exercise of power and smacks of vindictiveness and abuse of power.
8. Nalgonda-Rangareddy District Union supplied ghee worth Rs. 66.00 lakhs to Tirumala Tirupathi Devastanams during September, 2002 and the Federation collected the money through Chittoor District Union, but did not pay. The amount due comes to Rs. 1.00 crore, and Rs. 50.00 lakhs of Nalgonda-Rangareddy Union kept in revolving fund with the Government were given to Chittoor Union and were not restored. A total of Rs. 2.00 crores were withdrawn and diverted by the Federation to other entities. The commercial tax officer by seizing the bank account of Nalgonga-Rangareddy Union, collected Rs. 36.00 lakhs sales tax on the supplies made to Tirumala Tirupathi Devastanams in spite of exemption. Any defaults are traceable, thus, to the Federation.
11. The district milk unions have to abide by the transfer agreement on the directions and various Government orders as per Section 6(2) of 1995 Act, but they have violated the same. The directives of the Federation are violated and adequate quantities of milk and milk products are not supplied to the milk products factory, Hyderabad as per the directions of the Federation. The district milk unions are indulging in bulk sale of milk and milk products outside their jurisdiction directly without the knowledge of the Federation and they are not providing any information regarding their business transactions etc., to the Federation. They are not obtaining quality control clearance from the Federation and are not obeying the directions/instructions of the Government and the Federation. The Visakha and Guntur milk unions floated MATA Federation, marketing milk and milk products of competitor brands utilizing the State owned infrastructure against the interest of the State owned Vijaya brand. The Visakha Milk Union has Visakha brand. The Nalgonda-Rangareddy Milk Union repatriated the services of N. Hanumantha Rao, posted as General Manager by the Federation against the transfer agreement and all the district unions promoted juniors from common category seniority list tampering with protection of service assured by the State Government. The Krishna Milk Union gave higher emoluments to the Chief Executive Officer. All the district unions deviated from the staff pattern promoting and recruiting personnel at their discretion and ignoring the zonal system and the presidential order. The district unions were not remitting the contribution towards pension, leave salary and gratuity. In violation of the disciplinary control vested with the Federation, the Krishna Union did not implement the punishment in respect of Sri P.S.R. Swamy, S.A.O., MPF, Vijayawada, and Nalgonda-Rangareddy Union did not implement the suspension of Sri P. Dayakar Reddy, D.G.M. All the district unions appointed Chief Executive Officers and other sub-staff without the consent of the Federation. Kurnool, Nellore and Visakha Unions appointed retired personnel as their Chief Executive Officers. The final audit reports of Krishna, Guntur, Prakasam, Nellore, Nalgonda-Rangareddy and Kurnool Unions showed serious financial irregularities and mismanagement.
(g) Nalgonda-Rangareddy district union supplied ghee to Chittoor milk union for sale to Tirumala Tirupathi Devastanams and the sale proceeds could not be paid, as Chittoor milk union was ordered for liquidation. The Federation got exemption of sales tax for the supply of ghee and out of Rs. 2.00 crores given as advance to Chittoor milk union for clearing producer bills, the Federation and Krishna, Visakha and Nalgonda-Rangareddy Unions shared Rs. 50.00 lakhs each. These transactions were with the approval of the Board of the Federation.