Contempt of Court:
Contempt Petition – Maintainability of – Petition alleging noncompliance of order dated 17.05.2018 passed by Supreme Court – Objection to maintainability of the petition on the ground that on 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 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 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 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 directed to proceed with the process of liquidation only after 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 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 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 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
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 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 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 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 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 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 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. 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. 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]
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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