# In the matter of Royal Refinery Pvt. Ltd. I.A. 823-2020 in C.P. 2556-I&B-MB-2019

> NCLT judgment dated 2020-11-09. Citation: TCN-2020-NCLT-00282. The Corporate Insolvency Resolution Process (CIRP) was initiated against Royal Refinery Private…

- **Court:** NCLT
- **Order date:** 9 Nov 2020
- **Citation:** TCN-2020-NCLT-00282
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/royal-refinery-pvt-ltd-ia-823-2020-in-cp-2556-ib-mb-2019-e5c09099

## Summary

### Background

The Corporate Insolvency Resolution Process (CIRP) was initiated against Royal Refinery Private Limited (Corporate Debtor) based on a Section 9 petition filed by a Financial Creditor. Nandkishor Vishnupant Deshpande was appointed as the Interim Resolution Professional (IRP). The IRP made a public announcement inviting claims from creditors. The IRP discovered that a sum of Rs. 3.39 crores was receivable from Diamond India Limited (Respondent No. 2). Diamond India Limited confirmed a payable balance of Rs. 77,39,624/- to the Corporate Debtor. However, the Director of Revenue Intelligence (DRI) had attached this amount, preventing its disbursal to the Corporate Debtor. The IRP filed an application seeking the removal of the restriction imposed by the DRI and directing

…

## Facts

Royal Refinery Private Limited (Corporate Debtor) is engaged in the business of trading in bullion, importing gold, and exporting it after manufacturing. Diamond India Limited (Respondent No. 2) is a government-notified agency licensed by DGFT for importing gold and silver. The Corporate Debtor entered into an agreement with Diamond India Limited for the purchase of gold, maintaining a margin account for customs duty payments. The Director of Revenue Intelligence (DRI) initiated an investigation into the Corporate Debtor for allegedly diverting duty-free gold bars imported under the Advance Authorization Scheme. The DRI issued an attachment order to Diamond India Limited, preventing the disbursal of Rs. 77,39,624/- lying in the Corporate Debtor's margin account. The

…

## Issues and analysis

### Issue 1: Whether the Government dues, which are in the nature of Crown debts, take precedence over the …

**Ratio:** The Insolvency and Bankruptcy Code (IBC) does not provide priority to government dues on

…

**Reasoning:** The court relied on Section 53 of the IBC, which specifies the order of priority for

…

**Interpretation:** The IBC aims to maximize the value of assets and promote resolution, and giving

…

**Application:** In this case, the DRI's claim for customs duty is treated as an operational

…

## Parties

- **Judges:** SUCHITRAKAN…; Chandra Bha…
- **Appellants:** Nandkishor…
- **Respondents:** Royal Refinery…; Director of…
- **Advocates:** Ayush R…; Maya Maj…; +1 more

## Timeline

- **2019-11-13 — CIRP Init…**: Corporate Insolvency Resolution Process (CIRP)…
- **2019-11-21 — Public Annou…**: Public announcement in Form A made for intimating commencement of CIRP and inviting…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-chandigarh/royal-refinery-pvt-ltd-ia-823-2020-in-cp-2556-ib-mb-2019-e5c09099