Court Condones 1600-Day Delay in Recall Application, Emphasizes Protection of Public Money Amid Serious Allegations Against Former Official Liquidator
In a significant ruling on September 15, 2026, the Delhi High Court, presided over by Justice Amit Mahajan, restored a writ petition related to the liquidation proceedings of The Cooperative Store Limited (Super Bazar). The petition had been earlier withdrawn based on instructions from Dr. A.K. Mishra, who purported to act as the Official Liquidator (OL). However, the Court held that Dr. Mishra's tenure as OL had expired prior to his instructions to withdraw the petition, rendering such withdrawal unauthorized and invalid.
The case concerned the liquidation of Super Bazar, a public cooperative organization with assets worth approximately Rs. 150 crores and liabilities around Rs. 500 crores. The petitioner sought to challenge an award relating to Dearness Allowances, which could significantly impact the liquidation estate and the interests of creditors, workmen, and other stakeholders.
Key facts revealed that Dr. A.K. Mishra's tenure as OL ended on May 15, 2018. Despite this, he instructed counsel to withdraw the writ petition on May 18, 2018. The Court noted that the application to dispose of the petition was filed on May 16, 2018, after his tenure had expired, and the withdrawal occurred subsequently. The respondent argued that no explicit order terminated Dr. Mishra's tenure, but the Court rejected this, emphasizing that absence of extension meant cessation of authority.
The Court also underscored serious allegations against Dr. Mishra involving financial impropriety and embezzlement investigated by the Central Bureau of Investigation (CBI), which had led to sanction for his prosecution by the Central Registrar of Cooperative Societies. The Supreme Court had earlier taken note of his conduct post-tenure, including issuing a cheque worth Rs. 35 crores and instructing counsel not to appear before the Apex Court, actions held to be unauthorized.
The Court highlighted the public interest dimension, observing that since the liquidation involved substantial public money, any unauthorized acts by an ex-official could not be allowed to prejudice the liquidation estate or harm the claims of creditors and stakeholders. The writ petition's withdrawal, based on instructions from an unauthorized person, was therefore set aside.
Despite a delay of approximately 1600 days in filing the recall application to restore the petition, the Court condoned the delay citing the importance of safeguarding public funds over procedural lapses. The order dated May 18, 2018, was recalled, and the writ petition was restored for adjudication on merits.
The Court clarified that its decision only addressed the authority of the ex-OL to withdraw the petition and did not deal with the merits of the underlying dispute, which remain open for trial.
This judgment sends a strong message on the accountability of officials managing public cooperative bodies and the courts' readiness to intervene to protect public money and ensure proper legal process in liquidation cases.
The matter is now listed for further hearing on November 6, 2026.
Bottom Line:
Liquidation proceedings of a public cooperative organisation - Withdrawal of writ petition by an official without authority held to be invalid - Delay in filing recall application condoned to safeguard substantial public money.
Statutory provision(s):
Cooperative Societies Act, Civil Procedure Code, Indian Evidence Act.
