SUPER BAZAR KARAMCHARI DALIT SANGH AND ORS. versus UNION OF INDIA AND ORS. on 26 September 2018

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SUPREME COURT REPORTS

[2018] 13 S.C.R.

A SUPER BAZAR KARAMCHARI DALIT SANGH AND ORS.

v.

UNION OF INDIA AND ORS.

(M.A. Nos.1394-1395 of 2017)

B

In

(Special Leave Petition (Civil) Nos.8398-8399 of 2005)

SEPTEMBER 26, 2018

[DIPAK MISRA, CJI, A. M. KHANWILKAR ANDCDR. DHANANJAYA Y CHANDRACHUD, JJ.]

Contempt of Court:

Contempt Petition – Maintainability of – Petition alleging non-compliance of order dated 17.05.2018 passed by Supreme Court –Objection to maintainability of the petition on the ground that onDaccount of non-jointer of necessary parties and on account of othercircumstances full facts were not placed before the Court when theorder dated 17.05.2018 was passed – Held: In absence of keystakeholders, full perspective of the matter was not presented beforethe Court – To prevent miscarriage of justice order dated 17.05.2018Eis recalled and hence contempt petition for non-compliance of orderdated 17.05.2018, does not survive.

‘Super Bazar’ a multi-State Cooperative Society incurredhuge losses and was unable to discharge its liabilities towards itsstakeholders. ‘Super Bazar’ went into liquidation. Order ofFliquidation was challenged by employees’ Union before HighCourt. When the matter reached Supreme Court, the Court inorder to obviate the order of winding up in the interest of all thestakeholders, directed a revival scheme under its supervision.Under the revival plan ‘WPL’ invested Rs. 504 crores. But norevival took place. Therefore, this Court giving effect to theGprocess of terminating the arrangement for revival, directedrefund of entire investment made by WPL with interest @ 6%p.a. subject to profit during arrangement period. Such deductionswere to be made after verification by an auditor nominated byComptroller and Auditor General (CAG). Official Liquidator was H

directed to proceed with the process of liquidation only afterdischarging the liability of WPL. CAG submitted its report. WPLraised objections to the report. Contempt proceedings wereinitiated by WPL against Official Liquidator, wherein this Courtby order dated 17.5.2018 disposed of the petition holding thatWPL was entitled to interest @ 6% p.a. on the entire investmentand that losses accrued not as a result of business were notrequired to be deducted. Official Liquidator released Rs. 35crores to WPL. Another Contempt Petition was filed by WPLalleging non-compliance of order dated 17.5.2018 as refund ofentire investment along with interest had not been made. Unionof India filed Interlocutory Application (IA) in the ContemptPetition contending that the order dated 17.5.2018 needed to berecalled as that Contempt Petition in which the order dated17.5.2018 was passed was not maintainable because due tonon-jointer of necessary parties (CAG and UOI), full facts couldnot be brought to the attention of the Court. FurtherMiscellaneous Applications and Contempt Petition were filed byother stakeholders.

Dismissing the Contempt Petition (Civil) Nos.1207-1208of 2018 and disposing of the IA No. 125885 in Contempt Petition(Civil) Nos. 1207-1208 of 2018, the Court HELD: 1. This Court supervised the revival scheme overa length of time with the object of protecting the interest of allthe stakeholders of Super Bazar. However, Super Bazar couldnot be revived. WPL claimed that it had invested a large amountof money, in spite of which no significant improvement resulted.The scheme of revival was not executed in the manner envisagedby this Court. Prima facie the verification made in the CAG reportis pertinent to the present matter and has to be given carefulconsideration. The glaring irregularities in accounts pointed outby the auditors and verified by the CAG require careful scrutiny.The absence of an opportunity to the Union of India before thisCourt on the earlier occasion and the written instructions issuedby the former Official Liquidator preventing the counsel fromappearing have effectively prevented full facts being placed beforethis court. The affairs of Super Bazar implicate the interests of AB

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[2018] 13 S.C.R.

Adiverse stakeholders and the public interest. Full facts must beplaced before the Court to enable it to decide. [Para 19][441-B-D]

2. Moreover, the conduct of the earlier Official Liquidatorin purporting to issue instructions for the release of Rs. 35 croresBto WPL, after he had ceased to hold charge is a circumstancepressed in aid of the submission that there was a calibrated effortto prevent full facts from emerging before this Court. Theinterests of justice require that a full hearing be given to theUnion of India, the CAG, the present Official Liquidator and toWPL as well before a final determination is made of what, if anyCamount is due to WPL. Other stakeholders including theemployees’ union and the association of creditors should also beheard. Vital interests of all stakeholders are involved and that afull perspective of the matter was not presented to the court as aresult of the written instructions given by the earlier OfficialDLiquidator to the Counsel not to appear. Whatever may have beenhis motive in doing so, full facts should, but have not emergedbefore the court as a result of the absence of key stakeholders.In such a situation, it is the duty of the Court to prevent amiscarriage of justice and to set down proceedings for hearingafresh on the basis of the position as it obtained before the passingEof the order dated 17 May 2018. Hence, the order dated 17 May2018 are recalled. [Paras 20 and 21] [441-E-H; 442-A-B]

3. In view of the fact that the order dated 17 May 2018stands recalled, the Contempt Petitions filed by WPL fornon-compliance of the said order do not survive. Further, I.A.Ffiled on behalf of Union of India in the Contempt Petition of WPL,is accordingly disposed of to the extent that it seeks recall of theorder dated 17 May 2018. [Para 22] [442-B-C]

CIVIL APPELLATE JURISDICTION : M.A. Nos.1394-1395of 2017 in Special Leave Petition (Civil) Nos. 8398-8399 of 2005.GFrom the Judgment and Order dated 17.05.2018 of the Hon’bleSupreme Court of India in Contempt Petition (Civil) Nos. 1665-1666 of2017

WITH

M. A. Nos. 677-678 of 2018 in Special Leave Petition (Civil)HNos. 8398-8399 of 2005 with Contempt Petition (Civil) Nos. 866-867 of 2018 in SLP (Civil) Nos. 8398-8399 of 2005 with M.A. Nos. 1862-1863of 2018 in Special Leave Petition (Civil) Nos. 8398-8399 of 2005 andContempt Petition (Civil) Nos.1207-1208 of 2018 in Special LeavePetition (Civil) Nos. 8398-8399 of 2005.

Mr. Vikramjit Banerjee, ASG, C.A. Sundaram, Sunil Gupta,J.P. Cama, Harin P. Raval, Sajan Poovyya, Sr. Advs., Biju Mattam,Hemant Singh, Shourya Malhotra, Ms. Divya Roy, Sumit Goel,Ms. Sumedha Sindhu, Ms. Mahika Bhanot, Ms. Suruchi Kumar, MayanPrasad, M/s. Parekh & Co., R. K. Kapoor, Ms. Rekha Giri, Ms. Kheyali,Rajat Kapoor, Anis Ahmed Khan, R. P. Shukla, Ms. Upasna Shukla,Dhruv Shukla, Vijay K. Jain, Lakshmi Raman Singh, GopalSankaranarayanan, R. Balasubramanian, Mrs. Rekha Pandey, NachiketaJoshi, Gopal S. Narayan, Ms. Aarti Sharma, Siddhartha Sinha,Raj Bahadur, Mrs. Anil Katiyar, S. Wasim A. Qadri, Jubair Ahmad Khan,Zaid Ali, Tamim Qadri, Saeed Qadri, L. R. Singh, Priyadarshi Banerjee,Pratibhanu Singh, Animesh Kumar, Neeraj Shekhar, Advs.for theappearing parties.

The Judgment of the Court was delivered by DR. DHANANJAYA Y CHANDRACHUD, J.

The Judgment of the Court was delivered by DR. DHANANJAYA Y CHANDRACHUD, J.

1. The genesis of this set of proceedings dates back a decade,when steps were initiated for protecting the interests of the employeesand other stakeholders of Super Bazar, a Multi-State CooperativeSociety, through a revival scheme under the supervision of this Court.Super Bazar incurred huge losses on account of irregularities inmanagement and was unable to make payments towards arrears of wages,pensions and other benefits to its employees. It was unable to dischargeits liabilities towards other stakeholders as well. Pursuant to an orderdated 5 July 2002 issued by Central Registrar of Co-operative Societies,Super Bazar went into liquidation. The order of liquidation waschallenged by the Employees’ Union before the Delhi High Court.Eventually, proceedings came to this Court by way of Special LeavePetitions. In order to preserve the interests of all the stakeholders, thisCourt constituted a three-member committee to prepare and submit acomprehensive scheme for revival. The Committee identified threebidders. Out of them M/s Writers & Publishers Pvt. Ltd. (“WPL”)wasrecommended by the Committee for managing the affairs of Super Bazar.On 26 February 2009, this Court accepted the report of the Committee.The bid document submitted by WPL set out its financial capacity and A

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Athe funds which it would infuse for revival. Under the revival plan, WPLproposed to invest an amount of Rs. 504 crores, comprising of Rs. 102crores towards share capital, Rs. 276 crores towards working capitaland Rs. 126 crores for revival and revamping.

2. The revival scheme was intended to obviate an order ofBwinding up. On 7 May 2008, this Court recorded that all the unionsrepresenting the workmen had identified and agreed that theoutstanding dues payable to workers amounted to Rs. 54.31 crores, ason 31 December 2007. On 14 July 2009, WPL took over charge of theadministration of Super Bazar and began managing the affairs.

3. In a subsequent order dated 13 August 2010, this CourtCobserved thus:

“(ii) In terms of our order dated 7th May, 2008, an amount ofRs.54.31 crores, being arrears of wages up to 31st December,2007, was directed to be disbursed by the highest bidder. Rs.55crores stand deposited by the highest bidder. The sum of Rs.20Dcrores out of Rs.55 crores which lies with the Registry of theSupreme Court, will be disbursed by the Official Liquidator andthe nominee of the Central Registrar Co-operative Societies inthe presence of one Union representative of each Union withinfour weeks from today. The representative of the highest bidderwill also remain present in the said meeting. It is made clear thatEthe workers will sign the receipt of payment, which will be adjustedtowards the arrears of Rs.54.31 crores.

(iii) As far as the balance amount is concerned, we are directingthe highest bidder to file an affidavit containing an Undertakingthat within a period of eight weeks, from the date of constitutionFof the Board of Directors after the elections, the balance amountwill be disbursed to the workers. This will cover arrears of wagesup to 31st December, 2007.”

4. In accordance with the terms of the revival plan, WPL gavere-employment to the employees of Super Bazar in October 2009 for aGduration of 3 years. Subsequently, in September 2015, an I.A. was filedon behalf of the Union of India stating that neither WPL nor themanagement of Super Bazar had submitted a revival plan before theCentral Registrar of Cooperative Societies. As a result, no revival couldtake place in accordance with the provisions of the Multi-StateCooperative Societies Act, 2002.H

5. On 29 March 2016, a two-Judge Bench of this Court wasconstrained to observe that despite earnest efforts made by the Courtsince the acceptance of the bid of WPL, it was not possible to giveeffect to the terms of revival. Accordingly, this Court indicated that ithad sought suggestions to terminate the arrangement:

“Despite earnest efforts made by this Court ever since theacceptance of the bid of M/s Writers and Publishers Ltd., anddespite a series of hearings in the matter ever since 2009, it cameto be realised, that it would not be possible to give effect to theterms of revival. It is in the above view of the matter, that thisCourt sought suggestions from the rival parties, how thearrangement could be terminated.”

In order to give effect to the process of terminating the arrangementfor revival under the management of WPL, this Court by its order dated29 March 2016, directed a refund of the entire investment made byWPL, along with interest at the rate of 6 per cent per annum, subject todeduction of profits made during the period when the arrangementsubsisted. The Court further directed that these deductions shall be madeonly after verification by an auditor nominated by the Comptroller andAuditor General of India (“CAG”). The determination by the auditorwas required to be verified by the CAG, upon which it was made bindingupon by the parties concerned. In order to give effect to the process ofrefund and terminating the arrangement, WPL was directed to handoverall the movable and immovable properties of Super Bazar to the OfficialLiquidator. The directions of the Court were in the following terms:

“Having heard learned counsel, we are satisfied in recording, thatM/s Writers and Publishers Ltd. should be refunded the entireinvestment made by them, along with interest at the rate of 6%per annum (though it was suggested, that the rate of interest couldbe at 9% per annum), subject to deduction of profits made duringthe period when the arrangement subsisted....

M/s Writers and Publishers Ltd. will be entitled to, on the filing ofan appropriate application, withdrawal of Rs.14.84 crores (alongwith interest accrued thereon), which was deposited by it in theRegistry of this Court. Likewise, M/s Writers and Publishers Ltd.will also be entitled to a refund of Rs.8.07 crores (along withinterest accrued thereon), which was deposited by it, with the A

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ARegional Commissioner, Employees’ Provident Fund Organization,Wazirpur, Delhi, on the filing of an appropriate application. Theabove amounts payable to M/s Writers and Publishers Ltd., shallbe deducted from the principal amount payable to it, while refundingthe payments due.”

B6. The order dated 29 March 2016, assigned the following role tothe CAG:

“In order to effectuate the refund referred to hereinabove (toM/s Writers and Publishers Ltd.), we consider it just and appropriateto direct the Comptroller and Auditor General of India, to nominateCan Auditor, to verify the income and expenditure incurred by M/sWriters and Publishers Ltd., and also, the profits earned by it fromthe Super Bazar establishment, during the period underconsideration. The determination so made by the Auditor, will beverified by the office of the Comptroller and Auditor General ofIndia, whereupon, the same shall be binding on all the partiesDincluding M/s Writers and Publishers Ltd. Needless to mention,that all interested parties shall have the liberty to appear beforethe nominated Auditor, and canvass their respective claims.”

7. WPL was allowed to withdraw an amount of Rs. 14.84 croresdeposited by it in the Registry of this Court, in addition to a sum ofERs. 8.07 crores (with interest) deposited with the RegionalCommissioner, Employees’ Provident Fund Organization (EPFO), Delhi.The above amounts were to be deducted from the principal amountpayable to WPL, while refunding the payments due. The OfficialLiquidator was directed to proceed with the process of liquidation onlyFafter discharging the entire liability of WPL.

8. In pursuance of the directions issued in the order of this Court,the CAG submitted its report dated 1 September 2017. In response,WPL filed its objections to the report.

9. In the meantime, by its orders dated 21 November 2016 and 27GApril 2017, this Court allowed the Official Liquidator an extension oftime to settle the dues of WPL. The Court further directed the OfficialLiquidator to sell the properties of Super Bazar and disburse the amountto WPL after deduction of administrative and other permissible charges.

10. Thereafter, contempt proceedings were instituted by WPLHagainst the Official Liquidator for seeking refund of the principal amount along with interest at the rate of 6 per cent and release of the amount ofsale consideration. When the proceedings together with the report ofCAG were taken up by this Court an order dated 17 May 2018 waspassed, accepting two objections of WPL to the CAG report:

firstly, WPL was held to be entitled to interest at 6 per cent on theentire investment, which includes share capital; and secondly, lossesaccrued not as a result of the business were not required to bededucted. The Contempt Petition was disposed of by the order dated 17May 2018. Subsequently, WPL preferred an application on 17 May 2018for refund of the entire investment. The Official Liquidator by an orderdated 18 May 2018, released an amount of Rs. 35 crores to WPL.

The Deputy Director, in the Department of Consumer Affairs,Government of India wrote a letter dated 20 May 2018, prohibiting theOfficial Liquidator from releasing any payment to WPL; stating that thematter is under examination, in consultation with the Department of LegalAffairs and Ministry of Finance. The letter was copied to the BranchManager, Andhra Bank, Connaught Place, New Delhi with a requestnot to release any payment against cheque signed by the OfficialLiquidator, A.K. Mishra issued by him after 15 May 2018. Subsequently,the Official Liquidator wrote a letter dated 21 May 2018, informing WPLthat after the release of Rs 35 crore on 18 May 2018, no subsequentpayment can be made by him in view of the direction issued in the aboveletter dated 20 May 2017.

11. Contempt Petition Nos. 1207-1208 before this Court have beenfiled by WPL for non-compliance of the order dated 17 May 2018alleging that the refund of the entire investment along with the interesthas not been made to it. WPL has prayed for the release of Rs 102.82crores by disposing of the assets of Super Bazar.

12. WPL has also prayed for setting aside the letters dated20 May 2018 and 21 May 2018 for releasing the amount of Rs 35 croreto it.

13. In response to the present petition, the Union of India has filedan I.A. raising objections to the maintainability of the earlier contemptproceedings initiated by WPL on which this Court issued directions on17 May 2018. The proceedings initiated have been challenged on theground that the report of the CAG was not placed before this Court in afair and proper manner and a contempt petition was not maintainable.

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AAnother ground of challenge is that as a consequence of the non-joinderof necessary parties such as the CAG and the Central Government inthe Contempt Petition, true facts could not be brought to the attention ofthis Court. The former Official Liquidator alone was made a party to theContempt Petition. Objections were also raised in relation to thenon-issuance of notice to the CAG and the Central Government beforeBthe issuance of the directions on 17 May 2018.

14. We have taken note of the issues raised by Union of India inresponse to the present Contempt Petition. Our attention has been drawnto the fact that the Official Liquidator, A K Mishra gave writteninstructions to Senior Counsel and Assisting Counsel representing SuperCBazar not to appear before this Court. Further, it is stated that he issueda cheque to WPL allowing it to withdraw an amount of Rs 35 croreseven after the expiry of his term as Official Liquidator. It has beensubmitted by the Union of India that when the earlier proceedings wereheard by this Court, there was no representation on the part of the UnionDGovernment or Super Bazar, due to which several important facts anddocuments could not be brought to its notice. The relevant averments inthat regard are extracted below:

“32. ...It is submitted that the former Official Liquidator issuedinstructions to the Senior Counsel who was representing SuperEBazar along with junior counsel on 01.05.2018, not to appear beforethis Hon’ble Court on 02.05.2018 and in fact on that date whenthe orders were reserved, there was no representation on part ofthe Government or Super Bazar, due to which correct facts couldnot be brought to the notice of this Hon’ble Court. It is humblysubmitted that the facts which are borne from the records notFbrought to notice of this Hon’ble Court....

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42. It is submitted that, there is a further shocking state of affairsthat when the matter was listed on 09.07.2018 before this Hon’bleCourt the former Official Liquidator engaged a Senior AdvocateMr. Sajjan Povvaiya, who made the statement before this Hon’bleCourt that the former Official Liquidator is still holding chargeand the [Sr. Advocate] is representing him [former O.L.] andfurther the cheque in question was issued legally.... Themisdemeanour of the former Official Liquidator would be clearfrom the fact that former issued instructions to the Senior Counselwho was representing Super Bazar along with junior counsel on G

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01.05.2018 not to appear before this Hon’ble Court on 02.05.2018and in fact on that date when the orders were reserved, therewas no representation on part of the Government or Super Bazar,due to which correct facts could not be brought to the notice ofthis Hon’ble Court.”

15. Next in sequence is Contempt Petition Nos. 866-867 filed onbehalf of the Creditors Welfare Association. The applicant representspersons who were engaged in supply of goods to Super Bazar. Theapplicant had earlier filed a contempt petition for seeking payment ofRs. 25 crores which was due from Super Bazar for goods supplied,which was disposed of by this Court by an order dated 27 April 2017.The applicant alleges that Super Bazar owes a payment of Rs 25 crores.The applicant has contended that the Government through the CentralRegistrar did not provide an opportunity to be heard to all the interestedparties including the applicant and the workers’ union contrary to thedirections given by this Court in its order dated 10 May 2013.

16. Last in the present batch are three MAs which have beenfiled on behalf of three stakeholders of Super Bazar which are relevantfor the instant matter. The first is MA Nos. 677-678 of 2018 filed onbehalf of Dr. A.K. Mishra, former Official Liquidator of Super Bazar,seeking withdrawal of the orders dated 25 July 2016 and 4 October2016 issued by the Employees’ Provident Fund Organisation forrecovery of Rs 27,83,01,725 charged on account of dues relating toprovident fund, employees’ pension fund, insurance fund contributionand administrative charges under provisions of the Employees’Provident Fund & Miscellaneous Provisions, 1952; and for release ofpension of all outgoing employees of Super Bazar.

MA Nos. 1862-1863 is an application for impleadment filed onbehalf of 240 employees of Super Bazar as their dues towards salaryand other benefits have not been paid.

In the third group, MA Nos. 1394-1395 of 2017 have been filedon behalf of the employees of Super Bazar seeking arrears of wagesand other benefits in light of this Court’s order dated 29 March 2016. Ithas been contended by the employees that WPL carried out amendmentsto the bye-laws of the society which ousted the old shareholders fromthe management of Super Bazar in contravention of the provisions ofthe Multi State Cooperative Societies Act 2002.

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A17. The review of the accounts of Super Bazar for FinancialYears 2009-10 to 2015-16 was conducted by an auditor nominated bythe CAG, SPMG & Co. in accordance with this Court’s order dated 29March 2016. The determination made by SPMG & Co. in respect ofclaims made by WPL was verified in the CAG report dated1 September 2017. Mr. Harin P. Raval, learned Senior CounselBappearing on behalf of the present Official Liquidator has submitted thatan amount approximately of Rs 44 crores, represents inadmissible lossesas pointed out by the CAG in its report. In his written submissions,Mr Raval points out that the CAG report reflects serious infirmities inthe accounts of Super Bazar during the above years when WPL was inCmanagement. Some extracts from the report of the CAG adverting tosignificant infirmities in the accounts of WPL have been extractedbelow:

“FY 2009-10

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SL. M/s SPMG & Co., Chartered Accountants Report No.We would like to submit our observations in the form of a report as mentioned below:

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1. Writers & Publishers Private Limited introduced only Rs 35 crores during the Financial Year 2009-10 against Rs 102 crores mentioned in terms of revival as share capital. Further out of that amount of Rs 35 crores introduced by them against Share Capital. Rs 28 crores was converted into Fixed Deposits with F3. Bank as per the Books of Accounts and bank records produced before us as on 31.03.2010. The fresh induction of money in the form of Share Capital was required to be invested into enhancing the business activity of the Super Bazar, which was not done during the first year of induction of money. Out of Gseventy-three stores which were planned to be reopened as per the terms of the agreement, only one store at Sanjay Gandhi Memorial Hospital was made operational in January 2010. The total sale of that store was Rs 15 lacs (approx.) till 31.03.2010.

CAG Audit Term remarks Facts and figures verified

CAG Audit Term remarks Facts and figures verified SUPER BAZAR KARAMCHARI DALIT SANGH v. UNION439OF INDIA [DR. DHANANJAYA Y CHANDRACHUD, J.]A7. There are expenses amounting to Rs 67,92,216 (Annexure 3 for FY 2009-10 attached) which were incurred for the renovation of building. However, no Agreed with the quotation/ tender/ work order was floated. The remarks of the invoices attached against the above-mentioned nominated auditor B9. expenses doesn’t seems to be proper as proper tax is and Rs. 60,87,954 not charged. Further advance payments were made may be debited to and accounts was settled on last days of the financial M/s WPL and year. No certification/ photograph/ documentary included in redrafted evidence is available on record to justify the work balances. done against these expenses. CF.Y. 2010-11SL. CAG Audit Term M/s SPMG & Co., Chartered Accountants Report No.remarks Our firm M/s SPMG & Co., Chartered Accountants was Agreed with the remarks Dassigned the task to conduct the review of the Super of the nominated auditor. Bazar Cooperative Stores Limited for the F.Y. 2010-11 in compliance of the order passed by Hon'ble Supreme Court. We would like to submit our observations in the However nominated form of a report as mentioned below: auditor has worked out interest for 77 days on An advance of Rs 20 crores was given to a vendor 15 crores i.e. 28.48 lakh Enamely Premier Industries India Limited in the month of whereas per CAG audit January 2011. Neither interest was charged on the above team interest should be said amount nor any purchases were made till computed for 78 days i.e. 29.03.2011. On 30.03.2011 a. purchase of Rs 23,93,820/- Rs. 28.85 lakh. No 1. were made and simultaneously same goods were sold to difference in interest for the same party on that particular date itself for Rs balance 5 crore (Rs. 8.26 24,18,000/- earning a net profit of Rs 24,180/-. No lakh). Fjustification was available for giving an advance of Rs 20 crores without interest just to trade for Rs 24 Lacs (approx.) and that too without any implications of any flow of funds. An interest loss of Rs 36,73,973 should be Interest loss of Rs. 37.11 debited to party and credited in income so as to make lakh (Rs. 28.85 lakh + good the loss incurred on account of giving interest free Rs. 8..26 lakh) may be Gadvance without business purpose. debited to the party, which is included in redrafted balances. The onus of its recovery may lie with M/s WPL H

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There are expenses amounting to Rs 83,34,434 (Annexure Agreed with the 3 for FY 2010-11 attached) which were incurred for the remarks of the renovation of building. However, no quotation/ tender/ nominated auditor work order was floated. The invoices attached against the and Rs. 78,39,333 is B8.above-mentioned expenses doesn’t seems to be proper as debited to M/s WPL proper tax is not charged. Further advance payments were and included in made and accounts was settled on last days of the financial redrafted balance as year. No certification/ photograph/ documentary evidence Annexure 3. is available on record to justify the work done against these expenses.

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It has been further submitted by the learned Senior Counsel thatwith respect to Financial Year 2011-12, it was observed that 67 per centof the turnover was recorded by book entries only. Further, in 2012-13an attempt was made to show a turnover out of which 50 per cent wasonly by book entries without actual movements of goods. It has beenDstated that no dispute is raised with regard to interest but the amount onwhich the interest is payable has to be reworked by the nominated auditorand verified by the CAG. It has been contended that A K Mishra, whowas the former Official Liquidator, remained a mute spectator and didnot permit the counsel to present the real facts before this Court.Moreover, it has been submitted that the amount claimed as loss byEWPL is ineligible and an unclaimable expense not supported with anydocumentary proof.

18. Learned Counsel for WPL has also filed a note ofsubmissions in pursuance of the directions of this Court in its order dated12 September 2018. It has been stated that when WPL took overFpossession of Super Bazar, permission had to be obtained from variousstatutory authorities. Moreover, the properties were in a dilapidatedcondition and needed renovation and restoration. There were alsooutstanding statutory dues. It has been submitted that under the ordersof this Court, WPL was called upon to revive Super Bazar and it had toGmake investments for the revival. In a situation, where WPL was notable to proceed with the proposed revival scheme, it was held to beentitled to the return of its investment with interest of 6 per cent, afterreduction of any profits made by WPL during the period it was inmanagement. It has also been submitted that the transfer of money H

between different accounts of Super Bazar was only done to takeadvantage of higher interest rates.

19. In considering the rival submissions, several important facetsof the case which were brought to the notice of this Court need to be setout. This Court supervised the revival scheme over a length of time withthe object of protecting the interest of all the stakeholders of Super Bazar.However, Super Bazar could not be revived back to its halcyon days.WPL claimed that it had invested a large amount of money, in spite ofwhich no significant improvement resulted. The scheme of revival wasnot executed in the manner envisaged by this Court. Prima facie wefind that verification made in the CAG report is pertinent to the presentmatter and has to be given careful consideration. The glaringirregularities in accounts pointed out by the auditors and verified by theCAG require careful scrutiny. The absence of an opportunity to theUnion of India before this Court on the earlier occasion and the writteninstructions issued by the former Official Liquidator preventing the counselfrom appearing have effectively prevented full facts being placedbefore this court. The affairs of Super Bazar implicate the interests ofdiverse stakeholders and the public interest. Full facts must be placedbefore the Court to enable it to decide.

20. Moreover, the conduct of the earlier Official Liquidator inpurporting to issue instructions for the release of Rs. 35 crores to WPL,after he had ceased to hold charge is a circumstance pressed in aid ofthe submission that there was a calibrated effort to prevent full factsfrom emerging before this Court. In our view, the interests of justicerequire that a full hearing be given to the Union of India, the CAG, thepresent Official Liquidator and to WPL as well before a finaldetermination is made of what, if any amount is due to WPL. Otherstakeholders including the employees’ union and the association ofcreditors should also be heard. We are satisfied from the material onrecord that vital interests of all stakeholders are involved and that a fullperspective of the matter was not presented to the court as a result ofthe written instructions given by the earlier Official Liquidator to theCounsel not to appear. Whatever may have been his motive in doing so,full facts should, but have not emerged before the court as a result of theabsence of key stakeholders. In such a situation, it is the duty of theCourt to prevent a miscarriage of justice and to set down proceedings A

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Afor hearing afresh on the basis of the position as it obtained before thepassing of the order dated 17 May 2018.

21. Hence, we are of the view that the order dated 17 May 2018of this Court should be recalled. We order accordingly.

22. In view of the fact that the order dated 17 May 2018 standsBrecalled, the Contempt Petitions filed by WPL for non-compliance ofthe said order do not survive. Contempt Petition (Civil) Nos. 1207-1208of 2018 in Special Leave Petition (Civil) 8398-8399 of 2005 standdismissed. Further, I.A. No. 125885 in Contempt Petition (Civil)No. 1207-1208 of 2018 in Special Leave Petition (Civil) 8398-8399 ofC2005 filed on behalf of Union of India is accordingly disposed of to theextent that it seeks recall of the order dated 17 May 2018.

Kalpana K. Tripathy

Contempt Petitions disposed of.

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