# In the matter of Nagarjuna Oil Corporation Limited IA-840-IB-2020 MA-298-2018 in TCP-10-IB-2017

> NCLT judgment dated 2021-06-01. Citation: TCN-2021-NCLT-02054. Bharat Heavy Electricals Limited (BHEL) filed an appeal against the decision of the Respondent…

- **Court:** NCLT
- **Order date:** 1 Jun 2021
- **Citation:** TCN-2021-NCLT-02054
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/nagarjuna-oil-corporation-limited-ia-840-ib-2020-ma-298-2018-in-tcp-10-ib-2017-715dc641

## Summary

### Background

Bharat Heavy Electricals Limited (BHEL) filed an appeal against the decision of the Respondent (Liquidator of Nagarjuna Oil Corporation Limited - NOCL) rejecting BHEL's claim as an operational creditor. BHEL had entered into a purchase order with NOCL in 2010 to supply a hydrogen recycle gas compressor package. BHEL received 35% of the purchase price as advance but NOCL failed to open a Letter of Credit for the remaining amount. CIRP was initiated against NOCL in 2017, and BHEL filed its claim with the RP and later with the Liquidator. The Liquidator rejected BHEL's claim, stating that the compressor was not delivered at the site.

## Facts

In 2010, Bharat Heavy Electricals Limited (BHEL) entered into a purchase order with Nagarjuna Oil Corporation Limited (NOCL) to supply a hydrogen recycle gas compressor package for Rs. 25.90 Crore. BHEL received 35% of the purchase price (Rs. 9.06 Crore) as advance payments. NOCL was required to open a Letter of Credit for the remaining 60% of the purchase price two months prior to the start of dispatches, but failed to do so. BHEL claimed it was ready to dispatch the goods. NOCL stated that the equipment was under hold due to a revised project schedule. In 2013, BHEL sent a letter to NOCL requesting the opening of the Letter of Credit. CIRP was initiated against NOCL in 2017. BHEL filed its claim with the Resolution Professional (RP) and later with the Liquidator. The

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## Issues and analysis

### Issue 1: Whether the decision of the Respondent rejecting the Appellant's claim as Operational Creditor of …

**Ratio:** The principle derived from the Supreme Court's decision in the Committee of Creditors of

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**Reasoning:** The court reasoned that the approved scheme for NOCL binds all stakeholders, including

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**Interpretation:** This interpretation emphasizes the binding nature of an approved resolution

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**Application:** The ratio and reasoning apply to the specific facts of this case because the

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## Parties

- **Judges:** R. VARADH…; Anil Ku…
- **Appellants:** Bharat Heavy…
- **Respondents:** Nagarjuna Oil…; V. Ma…

## Timeline

- **2009-12-11 — Purchase Order…**: Purchase Order No. SAP/0007/2009/SEIPL issued…
- **2010-12-24 — Purchase Order…**: The Appellant entered into Purchase Order No. SAP/0007/2009/SEIPL with the Corporate…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 42 — Appeal against the decision of liquidator](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-42)

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