# In the matter of Indian Oil Corporation Ltd. Vs. Mr. Ashish Arjun Kumar Rathi CA(AT)(Ins)No. 1116 of 2019

> NCLAT judgment dated 2020-05-22. Citation: TCN-2020-NCLAT-00265. The case involves an appeal against an order passed by the National Company Law Tribunal…

- **Court:** NCLAT
- **Order date:** 22 May 2020
- **Citation:** TCN-2020-NCLAT-00265
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/indian-oil-corporation-ltd-vs-mr-ashish-arjun-kumar-rathi-ca-ab4ce855

## Summary

### Background

The case involves an appeal against an order passed by the National Company Law Tribunal (NCLT), Chennai, regarding the rejection of certain claims by the liquidator of SBQ Steels Pvt. Ltd. Indian Oil Corporation Ltd. (IOCL), the appellant, had filed a claim for investment made in a storage facility and for interest, which were partly rejected by the liquidator. The NCLT upheld the liquidator's decision, leading IOCL to file an appeal before the National Company Law Appellate Tribunal (NCLAT). The core issue revolves around whether the liquidator provided sufficient reasons for rejecting the claims and whether the rejection was justified under the Insolvency and Bankruptcy Code (I&B Code).

## Facts

Indian Oil Corporation Ltd. (IOCL) entered into an agreement with SBQ Steels Limited (the corporate debtor) on 08.02.2010 for the supply of furnace oil for 15 years. IOCL took a portion of land on lease from SBQ Steels to set up a fuel storage facility, investing Rs. 3,09,17,932.71. SBQ Steels failed to meet its obligations, leading IOCL to initiate arbitration proceedings and subsequently insolvency proceedings against SBQ Steels. The corporate debtor was ordered to be liquidated on 30.01.2019. IOCL submitted a claim to the liquidator, including Rs. 2,35,00,000 for investment in the storage facility and Rs. 2,90,00,000 for interest. The liquidator admitted Rs. 9,87,93,000 but rejected the claims for investment and interest. The liquidator stated that the investment

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## Issues and analysis

### Issue 1: Whether the Liquidator provided sufficient reasons for rejecting the Appellant's claim for …

**Ratio:** A Liquidator, acting as a quasi-judicial authority, must provide reasoned orders,

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**Reasoning:** The NCLAT found that the Liquidator had not provided detailed reasoning for rejecting the

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**Interpretation:** Section 40 of the I&B Code requires the Liquidator to provide reasons for

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**Application:** In this case, the Liquidator's failure to provide detailed reasons for

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## Parties

- **Judges:** Bansi Lal…; Venugop…; +1 more
- **Appellants:** Indian Oil…
- **Respondents:** SBQ Steels Pvt.…; Ashish Arjunkumar…

## Timeline

- **2010-02-08 — Agreement between IOCL…**: Indian Oil Corporation Ltd. (IOCL) entered into an agreement with SBQ Steels Limited for…
- **2019-01-30 — Liquidation…**: SBQ Steels Limited was…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 40 — Admission or rejection of claims](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-40)

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