1    

IN THE SUPREME COURT OF INDIA  CIVIL APPELLATE JURISDICTION  

 MA NOS 1394-1395 OF 2017  

 IN    

SPECIAL LEAVE PETITION (CIVIL) NOS 8398-8399  OF 2005     

SUPER BAZAR KARAMCHARI DALIT SANGH  AND ORS                       ..Petitioners     

VERSUS  

UNION OF INDIA AND ORS              ..Respondents    

WITH  

MA NOS 677-678 OF 2018    

IN    

SPECIAL LEAVE PETITION (CIVIL) NOS 8398-8399  OF 2005     

WITH  

CONT.PETITION (C) NOS 866-867 OF 2018    

IN    

SPECIAL LEAVE PETITION (CIVIL) NOS 8398-8399  OF 2005     

WITH  

REPORTABLE

2    

MA NOS 1862-1863 OF 2018    

IN    

SPECIAL LEAVE PETITION (CIVIL) NOS 8398-8399  OF 2005     

AND   

WITH  

CONT.PETITION (C) NOS 1207-1208 OF 2018    

IN    

SPECIAL LEAVE PETITION (CIVIL) NOS 8398-8399  OF 2005     

J U D G M E N T   

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 and other  

stakeholders of Super Bazar, a Multi-State Cooperative Society, through a

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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 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 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 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 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

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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 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  

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  

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  

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 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.   

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5. On 29 March 2016, a two-Judge Bench of this Court was 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  

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.”  

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 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 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:

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“Having heard learned counsel, we are satisfied in recording,  

that M/s Writers and Publishers Ltd. should be refunded the  

entire 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 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 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.”  

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 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  

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 Rs. 8.07 crores (with  

interest) deposited with the Regional Commissioner, Employees’ Provident  

Fund Organization (EPFO), Delhi. The above amounts were to be deducted

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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 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 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 against 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 of 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 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

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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.   

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 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 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 crores by disposing of the assets of  

Super Bazar.   

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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 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. 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  

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 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

10    

were heard by this Court, there was no representation on the part of the Union  

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  

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 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 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 who was representing Super 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.”  

15 Next in sequence is Contempt Petition Nos. 866-867 filed on 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. The applicant has contended that the Government through the

11    

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 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 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.   

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 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

12    

contravention of the provisions of the Multi State Cooperative Societies Act  

2002.   

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 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 management.  Some extracts from  

the report of the CAG adverting to significant infirmities in the accounts of WPL  

have been extracted below:  

SL.  

No.  M/s SPMG & Co., Chartered Accountants Report  

CAG Audit Term  

remarks  

3.   

We would like to submit our observations in the form of a  

report as mentioned below:  

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 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  

Facts and figures  

verified  

“FY 2009-10

13    

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 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.  

9.  

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  

quotation/ tender/ work order was floated. The invoices  

attached against the above-mentioned expenses doesn’t  

seems to be proper as proper tax is not charged. Further  

advance payments were made and accounts was settled  

on last days of the financial year. No certification/  

photograph/ documentary evidence is available on  

record to justify the work done against these expenses.  

Agreed with the  

remarks of the  

nominated auditor  

and Rs. 60,87,954  

may be debited to M/s  

WPL and included in  

redrafted balances.  

F.Y. 2010-11  

SL.  

No.  M/s SPMG & Co., Chartered Accountants Report  

CAG Audit Term  

remarks  

1.   

Our firm M/s SPMG & Co., Chartered Accountants was  

assigned the task to conduct the review of the Super  

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  

form of a report as mentioned below:   

An advance of Rs 20 crores was given to a vendor namely  

Premier Industries India Limited in the month of January  

2011. Neither interest was charged on the above said  

amount nor any purchases were made till 29.03.2011. On  

30.03.2011 a. purchase of Rs 23,93,820/- were made and  

simultaneously same goods were sold to the same party  

on that particular date itself for Rs 24,18,000/- earning a  

net profit of Rs 24,180/-. No 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 debited to party and credited in  

income so as to make good the loss incurred on account  

of giving interest free advance without business purpose.   

Agreed with the  

remarks of the  

nominated auditor.  

However nominated  

auditor has worked  

out interest for 77  

days on 15 crores i.e.  

28.48 lakh whereas  

per CAG audit team  

interest should be  

computed for 78  

days i.e. Rs. 28.85  

lakh. No difference in  

interest for balance 5  

crore (Rs. 8.26 lakh).   

Interest loss of Rs.  

37.11 lakh (Rs. 28.85  

lakh + Rs. 8..26 lakh)  

may be debited to  

the party, which is

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included in redrafted  

balances. The onus  

of its recovery may  

lie with M/s WPL    

8.  

There are expenses amounting to Rs 83,34,434  

(Annexure 3 for FY 2010-11 attached) which were  

incurred for the renovation of building. However, no  

quotation/ tender/ work order was floated. The invoices  

attached against the above-mentioned expenses doesn’t  

seems to be proper as proper tax is not charged. Further  

advance payments were made and accounts was settled  

on last days of the financial year. No certification/  

photograph/ documentary evidence is available on record  

to justify the work done against these expenses.  

Agreed with the  

remarks of the  

nominated auditor  

and Rs. 78,39,333 is  

debited to M/s WPL  

and included in  

redrafted balance as  

Annexure 3.   

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 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 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 possession of Super Bazar,

15    

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 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 between different accounts of Super Bazar  

was only done to take 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. 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  

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

16    

effectively prevented full facts being placed 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, 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 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 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 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.  

17    

22 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. 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 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.    

...................................................CJI            [Dipak Misra]    

                         ......................................................J            [A M Khanwilkar]    

                                     .......................................................J                    [Dr Dhananjaya Y Chandrachud]    New Delhi;  September 26, 2018