Summary
The Supreme Court clarified the court-approved exit terms for the unsuccessful revival of Super Bazar. Writers and Publisher was entitled to refund of its entire investment, including share capital, with 6% annual interest, less profits earned during the arrangement. The CAG report wrongly denied interest on share capital and adjusted losses against the refund, and required correction. The Court declined contempt action against the Official Liquidator but directed compliance with the clarified terms.
Issues
- Whether the CAG’s verification could exclude interest on share capital or deduct losses contrary to the earlier exit order.
- Whether the Official Liquidator’s conduct warranted contempt action.
Held
- The earlier order’s requirement to refund the entire investment with 6% annual interest included share capital as part of the funds infused for revival. General principles concerning shareholders’ entitlement to interest could not displace those specific directions. (¶¶ 5, 10, 11, 12)
- The mandate permitted deduction of profits earned by WPL during the arrangement because it was receiving interest on its investment. It did not authorise adjustment of losses against the refund. (¶¶ 12, 13)
- The CAG report required correction both for denial of interest on share capital and for adjustment of losses. All concerned were directed to act on the Court’s interpretation of the earlier directions. (¶¶ 14, 16)
- In light of the Official Liquidator’s affidavit explaining the audit process, extensions and steps towards valuation and sale, the Court declined to entertain contempt against him. (¶¶ 15, 17)
Result
Contempt petitions disposed of. CAG report to be corrected to allow 6% interest on the entire investment including share capital and remove the loss adjustment. All concerned directed to comply; no contempt action against the Official Liquidator.