# In the matter of Gandhar Oil Refinery (India) Vs. City Oil Pvt.Ltd Company Appeal (AT) (Ins) No. 915 of 2022

> NCLAT judgment dated 2022-09-30. Citation: TCN-2022-NCLAT-00176. The case involves an appeal against the dismissal of a Corporate Insolvency Resolution…

- **Court:** NCLAT
- **Order date:** 30 Sept 2022
- **Citation:** TCN-2022-NCLAT-00176
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/gandhar-oil-refinery-india-vs-city-oil-pvtltd-company-appeal-e7220e36

## Summary

### Background

The case involves an appeal against the dismissal of a Corporate Insolvency Resolution Process (CIRP) application filed under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016. The Appellant, Gandhar Oil Refinery (India) Ltd., is an operational creditor seeking to initiate CIRP against the Respondent, City Oil Pvt. Ltd., for non-payment of outstanding dues. The Adjudicating Authority dismissed the application in limini, leading to the present appeal before the National Company Law Appellate Tribunal (NCLAT). The core issue revolves around whether the interest amount on delayed payments can be included to meet the minimum threshold for initiating CIRP and whether the Adjudicating Authority erred in dismissing the application without providing the Respondent an

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## Facts

Gandhar Oil Refinery (India) Ltd. (Appellant) is a public limited company engaged in processing petroleum products. City Oil Pvt. Ltd. (Respondent) is a private limited company involved in manufacturing and trading lubricants and grease. Since March 2014, the two companies have engaged in business transactions. The Respondent periodically placed orders with the Appellant for the supply of Divyol 75 and Divyol 480 (SN 500). In April and August 2018, the Respondent placed three purchase orders. The Appellant supplied the products as per the purchase orders, which were accepted without protest. The Appellant raised invoices totaling Rs. 73,56,627/- which were accepted by the Respondent. The Respondent owed Rs. 3,61,91,915.35/- towards credit transactions prior to April

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority erred in dismissing the application in limini without …

**Ratio:** The judgment emphasizes that an order or judgment should contain reasoning and that the

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**Reasoning:** The NCLAT found that the Adjudicating Authority did not properly consider the terms of

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**Interpretation:** The interpretation of the law requires that the Adjudicating Authority must

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**Application:** In this case, the Adjudicating Authority's failure to consider the interest

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## Parties

- **Judges:** M. Satyanarayana…; Barun M…
- **Appellants:** Gandhar Oil…
- **Respondents:** City Oil Pv…

## Timeline

- **2014-03-01 — Business Transactions…**: The Appellant and Respondent engaged in…
- **2018-04-01 — Purchase Order…**: In April and August 2018, the Respondent placed…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 61 — Appeals and Appellate Authority](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-61)

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