Holding

The Supreme Court recalled the order dated 17 May 2018 and dismissed the contempt petitions, holding that the order was passed without the necessary parties and full facts.

Summary

The Supreme Court examined contempt petitions filed by Writers & Publishers Ltd. (WPL) alleging non‑compliance of its own order dated 17 May 2018, which directed a full refund of WPL’s investment in the failed revival of the multi‑state cooperative society Super Bazar along with 6% interest. The Court held that the order was passed without the joinder of key stakeholders such as the Comptroller and Auditor General (CAG) and the Union of India, resulting in an incomplete factual record. Because the earlier Official Liquidator had also prevented counsel from appearing, the Court concluded that full facts were not before it, creating a risk of miscarriage of justice. Consequently, the Court recalled the 17 May 2018 order and dismissed the contempt petitions, ordering a fresh hearing with all interested parties. The decision underscores the necessity of proper joinder and full disclosure before issuing contempt‑related directions.

Issues considered

The order dated 17 May 2018 directing refund to WPL was maintainable despite non‑joinder of essential parties (CAG, Union of India).
Whether the contempt petitions filed by WPL for alleged non‑compliance of that order should survive.
Whether the Supreme Court should recall the 17 May 2018 order to prevent miscarriage of justice.

Legislation cited

Subjects

contempt of courtrevival schemecooperative society liquidationCAG reportnon‑joinder of partiesmiscarriage of justiceorder recallemployee duesmulti‑state cooperative societies

Judgment

428 [2018]REPORTS
SUPREME COURT 13 S.C.R. 428 [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 AND
C DR. 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 on
D account of non-jointer of necessary parties and on account of other
circumstances full facts were not placed before the Court when the
order dated 17.05.2018 was passed – Held: In absence of key
stakeholders, full perspective of the matter was not presented before
the Court – To prevent miscarriage of justice order dated 17.05.2018
E is recalled and hence contempt petition for non-compliance of order
dated 17.05.2018, does not survive.
‘Super Bazar’ a multi-State Cooperative Society incurred
huge losses and was unable to discharge its liabilities towards its
stakeholders. ‘Super Bazar’ went into liquidation. Order of
F liquidation was challenged by employees’ Union before High
Court. When the matter reached Supreme Court, the Court in
order to obviate the order of winding up in the interest of all the
stakeholders, directed a revival scheme under its supervision.
Under the revival plan ‘WPL’ invested Rs. 504 crores. But no
revival took place. Therefore, this Court giving effect to the
G process of terminating the arrangement for revival, directed
refund of entire investment made by WPL with interest @ 6%
p.a. subject to profit during arrangement period. Such deductions
were to be made after verification by an auditor nominated by
Comptroller and Auditor General (CAG). Official Liquidator was
H
428
SUPER BAZAR KARAMCHARI DALIT SANGH v. UNION 429
OF INDIA

directed to proceed with the process of liquidation only after A
discharging the liability of WPL. CAG submitted its report. WPL
raised objections to the report. Contempt proceedings were
initiated by WPL against Official Liquidator, wherein this Court
by order dated 17.5.2018 disposed of the petition holding that
WPL was entitled to interest @ 6% p.a. on the entire investment
B
and that losses accrued not as a result of business were not
required to be deducted. Official Liquidator released Rs. 35
crores to WPL. Another Contempt Petition was filed by WPL
alleging non-compliance of order dated 17.5.2018 as refund of
entire investment along with interest had not been made. Union
of India filed Interlocutory Application (IA) in the Contempt C
Petition contending that the order dated 17.5.2018 needed to be
recalled as that Contempt Petition in which the order dated
17.5.2018 was passed was not maintainable because due to
non-jointer of necessary parties (CAG and UOI), full facts could
not be brought to the attention of the Court. Further
D
Miscellaneous Applications and Contempt Petition were filed by
other stakeholders.
Dismissing the Contempt Petition (Civil) Nos.1207-1208
of 2018 and disposing of the IA No. 125885 in Contempt Petition
(Civil) Nos. 1207-1208 of 2018, the Court
E
HELD: 1. This Court supervised the revival scheme over
a length of time with the object of protecting the interest of all
the stakeholders of Super Bazar. However, Super Bazar could
not be revived. WPL claimed that it had invested a large amount
of money, in spite of which no significant improvement resulted.
The scheme of revival was not executed in the manner envisaged F
by this Court. Prima facie the verification made in the CAG report
is pertinent to the present matter and has to be given careful
consideration. The glaring irregularities in accounts pointed out
by the auditors and verified by the CAG require careful scrutiny.
The absence of an opportunity to the Union of India before this G
Court on the earlier occasion and the written instructions issued
by the former Official Liquidator preventing the counsel from
appearing have effectively prevented full facts being placed before
this court. The affairs of Super Bazar implicate the interests of

H
430 SUPREME COURT REPORTS [2018] 13 S.C.R.

A diverse stakeholders and the public interest. Full facts must be
placed before the Court to enable it to decide. [Para 19]
[441-B-D]
2. Moreover, the conduct of the earlier Official Liquidator
in purporting to issue instructions for the release of Rs. 35 crores
B to WPL, after he had ceased to hold charge is a circumstance
pressed in aid of the submission that there was a calibrated effort
to prevent full facts from emerging before this Court. The
interests of justice require that a full hearing be given to the
Union of India, the CAG, the present Official Liquidator and to
WPL as well before a final determination is made of what, if any
C amount is due to WPL. Other stakeholders including the
employees’ union and the association of creditors should also be
heard. Vital interests of all stakeholders are involved and that a
full perspective of the matter was not presented to the court as a
result of the written instructions given by the earlier Official
D Liquidator to the Counsel 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 the absence of key stakeholders.
In such a situation, it is the duty of the Court to prevent a
miscarriage of justice and to set down proceedings for hearing
afresh on the basis of the position as it obtained before the passing
E of the order dated 17 May 2018. Hence, the order dated 17 May
2018 are recalled. [Paras 20 and 21] [441-E-H; 442-A-B]
3. In view of the fact that the order dated 17 May 2018
stands recalled, the Contempt Petitions filed by WPL for
non-compliance of the said order do not survive. Further, I.A.
F filed on behalf of Union of India in the Contempt Petition of WPL,
is accordingly disposed of to the extent that it seeks recall of the
order dated 17 May 2018. [Para 22] [442-B-C]
CIVIL APPELLATE JURISDICTION : M.A. Nos.1394-1395
of 2017 in Special Leave Petition (Civil) Nos. 8398-8399 of 2005.
G From the Judgment and Order dated 17.05.2018 of the Hon’ble
Supreme Court of India in Contempt Petition (Civil) Nos. 1665-1666 of
2017
WITH
M. A. Nos. 677-678 of 2018 in Special Leave Petition (Civil)
H Nos. 8398-8399 of 2005 with Contempt Petition (Civil) Nos. 866-867 of
SUPER BAZAR KARAMCHARI DALIT SANGH v. UNION 431
OF INDIA

2018 in SLP (Civil) Nos. 8398-8399 of 2005 with M.A. Nos. 1862-1863 A
of 2018 in Special Leave Petition (Civil) Nos. 8398-8399 of 2005 and
Contempt Petition (Civil) Nos.1207-1208 of 2018 in Special Leave
Petition (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, B
Hemant Singh, Shourya Malhotra, Ms. Divya Roy, Sumit Goel,
Ms. Sumedha Sindhu, Ms. Mahika Bhanot, Ms. Suruchi Kumar, Mayan
Prasad, 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, Gopal
Sankaranarayanan, R. Balasubramanian, Mrs. Rekha Pandey, Nachiketa C
Joshi, 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 the
appearing parties. D
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 employees
E
and other stakeholders of Super Bazar, a Multi-State Cooperative
Society, through a revival scheme under the supervision of this Court.
Super Bazar incurred huge losses on account of irregularities in
management and was unable to make payments towards arrears of wages,
pensions and other benefits to its employees. It was unable to discharge
its liabilities towards other stakeholders as well. Pursuant to an order F
dated 5 July 2002 issued by Central Registrar of Co-operative Societies,
Super Bazar went into liquidation. The order of liquidation was
challenged by the Employees’ Union before the Delhi High Court.
Eventually, proceedings came to this Court by way of Special Leave
Petitions. In order to preserve the interests of all the stakeholders, this
G
Court constituted a three-member committee to prepare and submit a
comprehensive scheme for revival. The Committee identified three
bidders. Out of them M/s Writers & Publishers Pvt. Ltd. (“WPL”)was
recommended 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 H
432 SUPREME COURT REPORTS [2018] 13 S.C.R.

A the funds which it would infuse for revival. Under the revival plan, WPL
proposed to invest an amount of Rs. 504 crores, comprising of Rs. 102
crores towards share capital, Rs. 276 crores towards working capital
and Rs. 126 crores for revival and revamping.
2. The revival scheme was intended to obviate an order of
B winding up. On 7 May 2008, this Court recorded that all the unions
representing the workmen had identified and agreed that the
outstanding dues payable to workers amounted to Rs. 54.31 crores, as
on 31 December 2007. On 14 July 2009, WPL took over charge of the
administration of Super Bazar and began managing the affairs.
3. In a subsequent order dated 13 August 2010, this Court
C observed thus:
“(ii) In terms of our order dated 7th May, 2008, an amount of
Rs.54.31 crores, being arrears of wages up to 31st December,
2007, was directed to be disbursed by the highest bidder. Rs.55
crores stand deposited by the highest bidder. The sum of Rs.20
D crores out of Rs.55 crores which lies with the Registry of the
Supreme Court, will be disbursed by the Official Liquidator and
the nominee of the Central Registrar Co-operative Societies in
the presence of one Union representative of each Union within
four weeks from today. The representative of the highest bidder
E will also remain present in the said meeting. It is made clear that
the workers will sign the receipt of payment, which will be adjusted
towards the arrears of Rs.54.31 crores.
(iii) As far as the balance amount is concerned, we are directing
the highest bidder to file an affidavit containing an Undertaking
that within a period of eight weeks, from the date of constitution
F of the Board of Directors after the elections, the balance amount
will be disbursed to the workers. This will cover arrears of wages
up to 31st December, 2007.”
4. In accordance with the terms of the revival plan, WPL gave
re-employment to the employees of Super Bazar in October 2009 for a
G duration of 3 years. Subsequently, in September 2015, an I.A. was filed
on behalf of the Union of India stating that neither WPL nor the
management of Super Bazar had submitted a revival plan before the
Central Registrar of Cooperative Societies. As a result, no revival could
take place in accordance with the provisions of the Multi-State
Cooperative Societies Act, 2002.
H
SUPER BAZAR KARAMCHARI DALIT SANGH v. UNION 433
OF INDIA [DR. DHANANJAYA Y CHANDRACHUD, J.]

5. On 29 March 2016, a two-Judge Bench of this Court was A
constrained to observe that despite earnest efforts made by the Court
since the acceptance of the bid of WPL, it was not possible to give
effect to the terms of revival. Accordingly, this Court indicated that it
had sought suggestions to terminate the arrangement:
“Despite earnest efforts made by this Court ever since the B
acceptance of the bid of M/s Writers and Publishers Ltd., and
despite a series of hearings in the matter ever since 2009, it came
to be realised, that it would not be possible to give effect to the
terms of revival. It is in the above view of the matter, that this
Court sought suggestions from the rival parties, how the
arrangement could be terminated.” C

In order to give effect to the process of terminating the arrangement
for revival under the management of WPL, this Court by its order dated
29 March 2016, directed a refund of the entire investment made by
WPL, along with interest at the rate of 6 per cent per annum, subject to
deduction of profits made during the period when the arrangement D
subsisted. The Court further directed that these deductions shall be made
only after verification by an auditor nominated by the Comptroller and
Auditor General of India (“CAG”). The determination by the auditor
was required to be verified by the CAG, upon which it was made binding
upon by the parties concerned. In order to give effect to the process of E
refund and terminating the arrangement, WPL was directed to handover
all the movable and immovable properties of Super Bazar to the Official
Liquidator. The directions of the Court were in the following terms:
“Having heard learned counsel, we are satisfied in recording, that
M/s Writers and Publishers Ltd. should be refunded the entire F
investment made by them, along with interest at the rate of 6%
per annum (though it was suggested, that the rate of interest could
be at 9% per annum), subject to deduction of profits made during
the period when the arrangement subsisted....
M/s Writers and Publishers Ltd. will be entitled to, on the filing of G
an appropriate application, withdrawal of Rs.14.84 crores (along
with interest accrued thereon), which was deposited by it in the
Registry of this Court. Likewise, M/s Writers and Publishers Ltd.
will also be entitled to a refund of Rs.8.07 crores (along with
interest accrued thereon), which was deposited by it, with the
H
434 SUPREME COURT REPORTS [2018] 13 S.C.R.

A Regional Commissioner, Employees’ Provident Fund Organization,
Wazirpur, Delhi, on the filing of an appropriate application. The
above amounts payable to M/s Writers and Publishers Ltd., shall
be deducted from the principal amount payable to it, while refunding
the payments due.”
B 6. The order dated 29 March 2016, assigned the following role to
the CAG:
“In order to effectuate the refund referred to hereinabove (to
M/s Writers and Publishers Ltd.), we consider it just and appropriate
to direct the Comptroller and Auditor General of India, to nominate
C an Auditor, to verify the income and expenditure incurred by M/s
Writers and Publishers Ltd., and also, the profits earned by it from
the Super Bazar establishment, during the period under
consideration. The determination so made by the Auditor, will be
verified by the office of the Comptroller and Auditor General of
India, whereupon, the same shall be binding on all the parties
D including M/s Writers and Publishers Ltd. Needless to mention,
that all interested parties shall have the liberty to appear before
the nominated Auditor, and canvass their respective claims.”
7. WPL was allowed to withdraw an amount of Rs. 14.84 crores
deposited by it in the Registry of this Court, in addition to a sum of
E Rs. 8.07 crores (with interest) deposited with the Regional
Commissioner, Employees’ Provident Fund Organization (EPFO), Delhi.
The above amounts were to be deducted from the principal amount
payable to WPL, while refunding the payments due. The Official
Liquidator was directed to proceed with the process of liquidation only
F after 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 27
G April 2017, this Court allowed the Official Liquidator an extension of
time to settle the dues of WPL. The Court further directed the Official
Liquidator to sell the properties of Super Bazar and disburse the amount
to WPL after deduction of administrative and other permissible charges.
10. Thereafter, contempt proceedings were instituted by WPL
H against the Official Liquidator for seeking refund of the principal amount
SUPER BAZAR KARAMCHARI DALIT SANGH v. UNION 435
OF INDIA [DR. DHANANJAYA Y CHANDRACHUD, J.]

along with interest at the rate of 6 per cent and release of the amount of A
sale consideration. When the proceedings together with the report of
CAG were taken up by this Court an order dated 17 May 2018 was
passed, accepting two objections of WPL to the CAG report:
firstly, WPL was held to be entitled to interest at 6 per cent on the
entire investment, which includes share capital; and secondly, losses B
accrued not as a result of the business were not required to be
deducted. The Contempt Petition was disposed of by the order dated 17
May 2018. Subsequently, WPL preferred an application on 17 May 2018
for refund of the entire investment. The Official Liquidator by an order
dated 18 May 2018, released an amount of Rs. 35 crores to WPL.
C
The Deputy Director, in the Department of Consumer Affairs,
Government of India wrote a letter dated 20 May 2018, prohibiting the
Official Liquidator from releasing any payment to WPL; stating that the
matter is under examination, in consultation with the Department of Legal
Affairs and Ministry of Finance. The letter was copied to the Branch
Manager, Andhra Bank, Connaught Place, New Delhi with a request D
not to release any payment against cheque signed by the Official
Liquidator, A.K. Mishra issued by him after 15 May 2018. Subsequently,
the Official Liquidator wrote a letter dated 21 May 2018, informing WPL
that after the release of Rs 35 crore on 18 May 2018, no subsequent
payment can be made by him in view of the direction issued in the above E
letter dated 20 May 2017.
11. Contempt Petition Nos. 1207-1208 before this Court have been
filed by WPL for non-compliance of the order dated 17 May 2018
alleging that the refund of the entire investment along with the interest
has not been made to it. WPL has prayed for the release of Rs 102.82 F
crores by disposing of the assets of Super Bazar.
12. WPL has also prayed for setting aside the letters dated
20 May 2018 and 21 May 2018 for releasing the amount of Rs 35 crore
to it.
13. In response to the present petition, the Union of India has filed G
an I.A. raising objections to the maintainability of the earlier contempt
proceedings initiated by WPL on which this Court issued directions on
17 May 2018. The proceedings initiated have been challenged on the
ground that the report of the CAG was not placed before this Court in a
fair and proper manner and a contempt petition was not maintainable.
H
436 SUPREME COURT REPORTS [2018] 13 S.C.R.

A Another ground of challenge is that as a consequence of the non-joinder
of necessary parties such as the CAG and the Central Government in
the Contempt Petition, true facts could not be brought to the attention of
this Court. The former Official Liquidator alone was made a party to the
Contempt Petition. Objections were also raised in relation to the
non-issuance of notice to the CAG and the Central Government before
B
the issuance of the directions on 17 May 2018.
14. We have taken note of the issues raised by Union of India in
response to the present Contempt Petition. Our attention has been drawn
to the fact that the Official Liquidator, A K Mishra gave written
instructions to Senior Counsel and Assisting Counsel representing Super
C Bazar not to appear before this Court. Further, it is stated that he issued
a cheque to WPL allowing it to withdraw an amount of Rs 35 crores
even after the expiry of his term as Official Liquidator. It has been
submitted by the Union of India that when the earlier proceedings were
heard by this Court, there was no representation on the part of the Union
D Government or Super Bazar, due to which several important facts and
documents could not be brought to its notice. The relevant averments in
that regard are extracted below:
“32. ...It is submitted that the former Official Liquidator issued
instructions to the Senior Counsel who was representing Super
E Bazar along with junior counsel on 01.05.2018, not to appear before
this Hon’ble Court on 02.05.2018 and in fact on that date when
the orders were reserved, there was no representation on part of
the Government or Super Bazar, due to which correct facts could
not be brought to the notice of this Hon’ble Court. It is humbly
submitted that the facts which are borne from the records not
F brought to notice of this Hon’ble Court....
42. It is submitted that, there is a further shocking state of affairs
that when the matter was listed on 09.07.2018 before this Hon’ble
Court the former Official Liquidator engaged a Senior Advocate
Mr. Sajjan Povvaiya, who made the statement before this Hon’ble
G Court that the former Official Liquidator is still holding charge
and the [Sr. Advocate] is representing him [former O.L.] and
further the cheque in question was issued legally.... The
misdemeanour of the former Official Liquidator would be clear
from the fact that former issued instructions to the Senior Counsel
H who was representing Super Bazar along with junior counsel on
SUPER BAZAR KARAMCHARI DALIT SANGH v. UNION 437
OF INDIA [DR. DHANANJAYA Y CHANDRACHUD, J.]

01.05.2018 not to appear before this Hon’ble Court on 02.05.2018 A
and in fact on that date when the orders were reserved, there
was no representation on part of the Government or Super Bazar,
due to which correct facts could not be brought to the notice of
this Hon’ble Court.”
15. Next in sequence is Contempt Petition Nos. 866-867 filed on B
behalf of the Creditors Welfare Association. The applicant represents
persons who were engaged in supply of goods to Super Bazar. The
applicant had earlier filed a contempt petition for seeking payment of
Rs. 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. C
The applicant has contended that the Government through the Central
Registrar did not provide an opportunity to be heard to all the interested
parties including the applicant and the workers’ union contrary to the
directions given by this Court in its order dated 10 May 2013.
16. Last in the present batch are three MAs which have been D
filed on behalf of three stakeholders of Super Bazar which are relevant
for the instant matter. The first is MA Nos. 677-678 of 2018 filed on
behalf of Dr. A.K. Mishra, former Official Liquidator of Super Bazar,
seeking withdrawal of the orders dated 25 July 2016 and 4 October
2016 issued by the Employees’ Provident Fund Organisation for E
recovery of Rs 27,83,01,725 charged on account of dues relating to
provident fund, employees’ pension fund, insurance fund contribution
and administrative charges under provisions of the Employees’
Provident Fund & Miscellaneous Provisions, 1952; and for release of
pension of all outgoing employees of Super Bazar.
F
MA Nos. 1862-1863 is an application for impleadment filed on
behalf of 240 employees of Super Bazar as their dues towards salary
and other benefits have not been paid.
In the third group, MA Nos. 1394-1395 of 2017 have been filed
on behalf of the employees of Super Bazar seeking arrears of wages G
and other benefits in light of this Court’s order dated 29 March 2016. It
has been contended by the employees that WPL carried out amendments
to the bye-laws of the society which ousted the old shareholders from
the management of Super Bazar in contravention of the provisions of
the Multi State Cooperative Societies Act 2002.
H
438 SUPREME COURT REPORTS [2018] 13 S.C.R.

A 17. The review of the accounts of Super Bazar for Financial
Years 2009-10 to 2015-16 was conducted by an auditor nominated by
the CAG, SPMG & Co. in accordance with this Court’s order dated 29
March 2016. The determination made by SPMG & Co. in respect of
claims made by WPL was verified in the CAG report dated
1 September 2017. Mr. Harin P. Raval, learned Senior Counsel
B
appearing on behalf of the present Official Liquidator has submitted that
an amount approximately of Rs 44 crores, represents inadmissible losses
as pointed out by the CAG in its report. In his written submissions,
Mr Raval points out that the CAG report reflects serious infirmities in
the accounts of Super Bazar during the above years when WPL was in
C management. Some extracts from the report of the CAG adverting to
significant infirmities in the accounts of WPL have been extracted
below:

“FY 2009-10
D
SL. CAG Audit Term
M/s SPMG & Co., Chartered Accountants Report
No. remarks

We would like to submit our observations in the
form of a report as mentioned below:
E
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
F Facts and figures
3. Bank as per the Books of Accounts and bank records
verified
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
G seventy-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.

H
SUPER BAZAR KARAMCHARI DALIT SANGH v. UNION 439
OF INDIA [DR. DHANANJAYA Y CHANDRACHUD, J.]

A
7. 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 B
9. 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.
C

F.Y. 2010-11
SL. 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 D
assigned 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 E
namely 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). F
justification 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
advance without business purpose. debited to the party, G
which is included in
redrafted balances. The
onus of its recovery may
lie with M/s WPL

H
440 SUPREME COURT REPORTS [2018] 13 S.C.R.

A

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
B 8. 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.
C
It has been further submitted by the learned Senior Counsel that
with respect to Financial Year 2011-12, it was observed that 67 per cent
of the turnover was recorded by book entries only. Further, in 2012-13
an attempt was made to show a turnover out of which 50 per cent was
only by book entries without actual movements of goods. It has been
D stated that no dispute is raised with regard to interest but the amount on
which the interest is payable has to be reworked by the nominated auditor
and verified by the CAG. It has been contended that A K Mishra, who
was the former Official Liquidator, remained a mute spectator and did
not permit the counsel to present the real facts before this Court.
Moreover, it has been submitted that the amount claimed as loss by
E WPL is ineligible and an unclaimable expense not supported with any
documentary proof.
18. Learned Counsel for WPL has also filed a note of
submissions in pursuance of the directions of this Court in its order dated
12 September 2018. It has been stated that when WPL took over
F possession of Super Bazar, permission had to be obtained from various
statutory authorities. Moreover, the properties were in a dilapidated
condition and needed renovation and restoration. There were also
outstanding statutory dues. It has been submitted that under the orders
of this Court, WPL was called upon to revive Super Bazar and it had to
G make investments for the revival. In a situation, where WPL was not
able to proceed with the proposed revival scheme, it was held to be
entitled to the return of its investment with interest of 6 per cent, after
reduction of any profits made by WPL during the period it was in
management. It has also been submitted that the transfer of money

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SUPER BAZAR KARAMCHARI DALIT SANGH v. UNION 441
OF INDIA [DR. DHANANJAYA Y CHANDRACHUD, J.]

between different accounts of Super Bazar was only done to take A
advantage of higher interest rates.
19. In considering the rival submissions, several important facets
of the case which were brought to the notice of this Court need to be set
out. This Court supervised the revival scheme over a length of time with
the object of protecting the interest of all the stakeholders of Super Bazar. B
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 of
which no significant improvement resulted. The scheme of revival was
not executed in the manner envisaged by this Court. Prima facie we
find that verification made in the CAG report is pertinent to the present
matter and has to be given careful consideration. The glaring C
irregularities in accounts pointed out by the auditors and verified by the
CAG require careful scrutiny. The absence of an opportunity to the
Union of India before this Court on the earlier occasion and the written
instructions issued by the former Official Liquidator preventing the counsel
from appearing have effectively prevented full facts being placed D
before this court. The affairs of Super Bazar implicate the interests of
diverse stakeholders and the public interest. Full facts must be placed
before the Court to enable it to decide.
20. Moreover, the conduct of the earlier Official Liquidator in
purporting to issue instructions for the release of Rs. 35 crores to WPL, E
after he had ceased to hold charge is a circumstance pressed in aid of
the submission that there was a calibrated effort to prevent full facts
from emerging before this Court. In our view, the interests of justice
require that a full hearing be given to the Union of India, the CAG, the
present Official Liquidator and to WPL as well before a final
determination is made of what, if any amount is due to WPL. Other F
stakeholders including the employees’ union and the association of
creditors should also be heard. We are satisfied from the material on
record that vital interests of all stakeholders are involved and that a full
perspective of the matter was not presented to the court as a result of
the written instructions given by the earlier Official Liquidator to the G
Counsel 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 the
absence of key stakeholders. In such a situation, it is the duty of the
Court to prevent a miscarriage of justice and to set down proceedings

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442 SUPREME COURT REPORTS [2018] 13 S.C.R.

A for hearing afresh on the basis of the position as it obtained before the
passing of the order dated 17 May 2018.
21. Hence, we are of the view that the order dated 17 May 2018
of this Court should be recalled. We order accordingly.
22. In view of the fact that the order dated 17 May 2018 stands
B recalled, the Contempt Petitions filed by WPL for non-compliance of
the said order do not survive. Contempt Petition (Civil) Nos. 1207-1208
of 2018 in Special Leave Petition (Civil) 8398-8399 of 2005 stand
dismissed. Further, I.A. No. 125885 in Contempt Petition (Civil)
No. 1207-1208 of 2018 in Special Leave Petition (Civil) 8398-8399 of
C 2005 filed on behalf of Union of India is accordingly disposed of to the
extent that it seeks recall of the order dated 17 May 2018.

Kalpana K. Tripathy Contempt Petitions disposed of.

D

E

F

G

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