Delhi High Court Restores Super Bazar Writ Petition Withdrawn On Former Liquidator's Instructions

On 15 September, the Delhi High Court recalled the 18 May 2018 order dismissing The Cooperative Store Limited (Super Bazar)'s writ petition as withdrawn, after finding that its former Official Liquidator, Dr. A.K. Mishra, lacked authority to instruct the withdrawal after his tenure ended.

Justice Amit Mahajan held that an Official Liquidator cannot instruct withdrawal of a writ petition after his tenure has expired, particularly where the proceedings concern substantial public money. The Bench held:

“The order dated 18.05.2018, whereby W.P.(C.) 9114/2007 was dismissed as withdrawn, cannot be permitted to stand on the basis of instructions issued after expiry of the tenure of the OL, particularly where the proceedings concern such a substantial amount of public money.”

Super Bazar sought recall of the 2018 order along with condonation of a 1,600-day delay. It contended that the petition had been withdrawn on the instructions of Dr. Mishra, whose tenure as Official Liquidator had expired on 15 May 2018 and was not extended thereafter. It further submitted that Dr. Mishra's tenure was not extended amid allegations of financial irregularities investigated by the CBI. It argued that an unauthorised withdrawal of the petition could create a substantial liability for the liquidation estate.

The Company also submitted that it was a public cooperative organisation under liquidation, with liabilities of approximately Rs. 500 crore against assets of around Rs. 150 crore, and that the proceedings involved substantial public money.

The respondent union opposed the application, contending that Dr. Mishra had authority to withdraw the petition and that the application dated 7 May 2018 had been filed while he was still holding the office of Official Liquidator.

Justice Mahajan rejected this contention, noting that although the application bore the date 7 May 2018, the filing records showed that it was filed only on 16 May 2018, after Dr. Mishra's tenure had ended on 15 May. He further noted that the application merely sought disposal of the writ petition in view of the pending proceedings before the Supreme Court and did not seek withdrawal of the petition. He held:

“Dr. A.K. Mishra, therefore, had no authority to instruct withdrawal of the petition after he had ceased to hold the office of OL.”

The Court also rejected the argument that a specific order from the Central Registrar was required to bring Dr. Mishra's tenure to an end. It noted that his tenure had been extended only until 15 May 2018 and, in the absence of any further extension, he could not continue exercising the powers of the Official Liquidator.

It also took note that Super Bazar was under liquidation and that the proceedings had consequences for the liquidation estate, creditors, workmen and other stakeholders. It observed:

“In such circumstances, a proceeding affecting the liquidation estate ought not to remain withdrawn merely on the basis of instructions issued by a person who had ceased to hold the office of OL.”

On the 1,600-day delay, the Bench held that sufficient cause had been shown for condoning it. It stated:

“Even though there is substantial delay in filing the application seeking recall of order dated 18.05.2018, such substantial amount of public money cannot be wasted because of the conduct of one officer issuing directions without any authority and the laxity shown by some officers in filing the application seeking recall.”

Accordingly, the High Court condoned the delay, recalled the 18 May 2018 order and restored the writ petition to its original number for consideration on merits.

For Petitioner: Advocates Ruchir Mishra, Sanjiv Kumar Saxena, Mukesh Kumar Tiwari, Poonam Shukla, Reba Jena Mishra and Mukul Yadav

For Respondent: Jagdish Chaudhary, President and H.S Rao