# In the matter of Royal Refinery Private Limited, I.A. 1398/2020 in C.P. 2556/I&B/MB/2019

> NCLT judgment dated 2021-01-29. Citation: TCN-2021-NCLT-03190. The case involves an application (I.A. 1398/2020) filed in C.P. 2556/I&B/MB/2019 under Section…

- **Court:** NCLT
- **Order date:** 29 Jan 2021
- **Citation:** TCN-2021-NCLT-03190
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/royal-refinery-private-limited-ia-13982020-in-cp-2556ibmb2019-9cc6b534

## Summary

### Background

The case involves an application (I.A. 1398/2020) filed in C.P. 2556/I&B/MB/2019 under Section 66 read with Section 26 of the Insolvency & Bankruptcy Code, 2016. The applicant, Mr. Nandkishor Vishnupant Deshpande, sought reliefs related to fraudulent transactions allegedly conducted by the respondents, particularly Shalibhadra Exports Private Limited, with Royal Refinery Private Limited (the Corporate Debtor). The Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor on 13.11.2019, following a Section 9 petition filed by the Operational Creditor. The applicant contends that the Corporate Debtor engaged in fraudulent or wrongful trading with the intent to defraud creditors, specifically by extending undue credit facilities to

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## Facts

The Corporate Insolvency Resolution Process (CIRP) was initiated against Royal Refinery Private Limited (Corporate Debtor) on 13.11.2019, based on a Section 9 petition. Mr. Nandkishor Vishnupant Deshpande was appointed as the Interim Resolution Professional (IRP). The IRP issued a public announcement on 21.11.2019, inviting claims from creditors by 04.12.2019. The IRP constituted a Committee of Creditors (CoC). The first CoC meeting was held on 17.12.2019, where the IRP was confirmed and appointed as the Resolution Professional (RP). The Corporate Debtor is engaged in importing and exporting gold, with sales generally made on advance payment or within 2-3 days. The applicant alleges that the Corporate Debtor extended undue credit facilities to Shalibhadra Exports

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## Issues and analysis

### Issue 1: Whether the transactions between the Corporate Debtor and Shalibhadra Exports Private Limited …

**Ratio:** Section 66 of the IBC deals with fraudulent or wrongful trading. It imposes liability on

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**Reasoning:** The Tribunal observed that the unaudited balance sheets produced by the Resolution

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**Interpretation:** The Tribunal interpreted Section 66 of the IBC to mean that any person,

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**Application:** The Tribunal applied the ratio to the facts of the case, finding that the

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## Parties

- **Judges:** SUCHITRAKAN…; Chandra Bha…
- **Appellants:** Nandkishor…
- **Respondents:** Royal Refinery…; Shalibhadra…

## Timeline

- **2019-11-13 — CIRP Init…**: Corporate Insolvency Resolution Process (CIRP) initiated against Royal Refinery Private…
- **2019-11-21 — Public Annou…**: Public announcement issued,…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 66 — Fraudulent trading or wrongful trading](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-66)

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