M/S WRITERS AND PUBLISHERS PVT. LTD. versus DR. AK MISHRA, OFFICIAL LIQUIDATOR

Citation: [2020] 4 S.C.R. 78 · Decided: 05-03-2020 · Supreme Court of India · Bench: D.Y. CHANDRACHUD · Disposal: Dismissed

cites 1 · see the full citation network in Lexace

Judgment (excerpt)

A
B
C
D
E
F
G
H
78
SUPREME COURT REPORTS
[2020] 4 S.C.R.
M/S WRITERS AND PUBLISHERS PVT. LTD.
v.
DR. AK MISHRA, OFFICIAL LIQUIDATOR
(Conmt. Pet. (C) Nos. 1665-1666 of 2017)
MARCH 05, 2020
[DR. DHANANJAYA Y. CHANDRACHUD
AND AJAY RASTOGI, JJ.]
Multi-State Co-operative Societies Act, 2002:
ss.89 and 90 – Winding up of Super Bazar – Notice by Official
Liquidator u/s. 25F of Industrial Disputes Act, 1947 terminating
services of regular employees – SLP before Supreme Court
challenging winding up order – Scheme for revival of Super Bazaar
– The petitioner in its bid for revival envisaged investment of
Rs. 504 crores – Petitioner’s bid accepted – SLP disposed of in
above terms keeping the order of winding up suspended – During
period under petitioner’s management summons issued u/s. 7A of
Employees’ Provident Fund and Miscellaneous Provisions Act, 1952
– Application before Supreme Court seeking withdrawal of summons
– Constitution of Committee to look into certain issues regarding
implementation of revival scheme – Committee in its report indicated
serious impasse arising out of the non-implementation of the revival
plan – Court directed refund of entire investment made by the
petitioner subject to deduction of profits made during the period of
arrangement – Direction to Comptroller and Auditor General of
India to determine exact amount to be refunded – Official Liquidator
was directed to bring to sale all the properties of Super Bazar –
Properties were handed over by the petitioner to Official Liquidator
– Contempt Petition by the petitioner seeking disbursement of certain
amount received from the sale of property of Super Bazar – The net
outstanding amount worked out by Comptroller and Auditor General
(CAG), as against the claim of petitioner amounting to Rs. 126
crores, was Rs. 3.39 crores – Held: The conduct of the petitioner
shows lack of bonafide in revival of Super Bazar – Having failed
in reviving Super bazar, its claim for refund of entire amount it had
invested, is contrary to the principles which govern winding up as
well a statutory scheme embodied in ss. 89 and 90 of Multi-State
[2020] 4 S.C.R. 78
78
A
B
C
D
E
F
G
H
79
Co-operative Societies Act; rr. 28 and 29 of Multi-State Co-operative
Societies Rules and s. 11 of Employees Provident Fund Act –
Verification made by CAG is final and binding – Official Liquidator
to deal with petitioner’s claim to the extent set out by CAG in
accordance with statutory order of priorities – Multi-State Co-
operative Societies Rules, 2002 – rr. 28 and 29 – Employees’
Provident Fund and Miscellaneous Provisions Act, 1952 – s. 11.
Dismissing the Contempt Petitions, the Court
HELD: 1. The purpose of the direction of this Court dated
29.03.2016 in nominating an auditor was to ensure a proper
verification of the income and expenditure incurred by the
petitioner and the profits earned from the Super Bazar
establishment. Underlying the above direction of this Court was
the necessity that the auditor conduct a due verification of the
actual and genuine income as well as the expenditure which was
incurred by the petitioner. That was premised on the assumption
that in pursuance of the revival plan, a genuine effort had been
made by the petitioner to revive Super Bazar. The circumstances
which have come on the record as a result of the verification
which has been carried out by the CAG upon the report of the
auditor indicate several significant facets. The findings which have
emerged in the course of the verification by the CAG leave no
manner of doubt that the petitioner did not intend at any material
time to embark upon the revival of Super Bazar. The business
and affairs of Super Bazar were conducted in a manner that was
sham and bogus. It dealt with related entities as explained in the
report. The Transactions and the modalities followed are
indicative of a lack of bona fides on the part of the petitioner in its
operations. [Paras 26 and 27][102-B-D; 103-C]
2. No part of the order dated 29.03.2016 of this Court
contains a direction to the effect that the petitioner would not be
held to account, upon a verification by the CAG, for the nature of
its dealings during the period when it was in management. To
accept the submission of the petitioner that no deduction could
be made from the investment which it had brought in save and
except for profits actually earned would be a simplistic reading of
the order of this Court. The entire process of verification of the
M/S WRITERS AND PUBLISHERS PV

Excerpt shown. Read the full judgment & AI analysis in Lexace.