NEW DELHI: With the illegality of Adarsh Housing Society fully established, auditors are now getting ready to investigate how its promoters cheated the Army of several hundred crores.As the Comptroller and Auditor General of India carries out a nationwide audit of defence land, the scam-tainted Colaba highrise is coming under close scrutiny from its local auditors in Mumbai.Sources said “auditors based in Mumbai are looking at the entire issue” and prima facie a large number of questions are popping up on Adarsh Society, in which several political leaders, military brass and bureaucrats are members. All of them got flats in the society in an expensive part of Mumbai at throwaway prices.While ownership of the land was still with the state, it was in the custody of Army for several years. Army had taken custody of the land ever since it was reclaimed because the state government was to give it to the Army in return for Army’s land in Santa Cruz firing range which was taken over by for expanding the Western Expressway.In the late 1950s, the defence ministry and the State of Bombay had clearly agreed on the modalities of the land exchange. In a letter on December 31, 1958, joint secretary in the MoD, S D Nargolwala wrote to the secretary of the public works department of Bombay, referring to a discussion between the chief minister and defence minister where they agreed on the land swap. “The Government of Bombay should take over the area required from the Santa Cruz Rifle Range and in exchange make available to the Ministry of Defence approximately the same acreage of Bombay Government land from Block VI in Colaba, an area adjacent to the site where Defence installations are already situated.” The letter also said in case the transfer doesn’t take place, the state government will financially compensate the Army.Now, as the auditors go through records, it is clear that the Army neither got the land, nor financial compensation from the state. The financial loss due to this would run into hundreds of crores, at today’s market value, sources pointed out.Besides the financial loss, the CAG would also look at the compromise of security, the misuse of the name of war widows etc. Local auditors are already in touch with the Army’s local authorities, sources said. “We are having regular communications,” a source said.