# In the matter of City Oil Private Limited

> NCLT judgment dated 2024-01-12. Citation: TCN-2024-NCLT-03096. Apar Industries Limited, the Operational Creditor/Applicant, filed an application under Section…

- **Court:** NCLT
- **Order date:** 12 Jan 2024
- **Citation:** TCN-2024-NCLT-03096
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/city-oil-private-limited-b3c2ea6b

## Summary

### Background

Apar Industries Limited, the Operational Creditor/Applicant, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against City Oil Private Limited, the Corporate Debtor/Respondent. The application pertains to a default in payment for the supply of "Power Oil" brand lubricant. The Operational Creditor claims a total default amount of Rs. 1,54,92,104/-, including principal and interest, arising from invoices issued between May and July 2019. The Corporate Debtor acknowledges the debt but cites financial instability as the reason for non-payment. The Corporate Debtor also alleges defects in the supplied products and disputes the applicability of GST and interest charges.

## Facts

Apar Industries Limited (Operational Creditor) supplied "Power Oil" lubricant to City Oil Private Limited (Corporate Debtor) based on purchase orders issued in May and July 2019. The Operational Creditor issued invoices for the supplies between May and July 2019, totaling Rs. 1,11,75,564/-. The invoices included 18% GST and a clause for 24% interest on late payments. The Corporate Debtor made part payments totaling Rs. 11,46,634/-, with the last payment on 2021-11-30. The Operational Creditor claimed a total default of Rs. 1,54,92,104/-, including principal and interest, with the date of default being 2019-07-13. The Corporate Debtor acknowledged the debt but cited financial instability as the reason for non-payment. The Corporate Debtor also alleged defects

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## Issues and analysis

### Issue 1: Whether the amount claimed by the Operational Creditor includes inadmissible components such as …

**Ratio:** Mere adducing an interest clause in the invoices by the Operational Creditor is not

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**Reasoning:** The NCLT relied on the decision passed by the Learned NCLT, New Delhi Bench in the case

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**Interpretation:** The court interpreted that simply including an interest clause in invoices does

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**Application:** The NCLT deducted the 24% interest part from the total amount claimed to be in

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## Parties

- **Judges:** BIDISHA BA…; D. Ar…
- **Appellants:** Apar Industries…
- **Respondents:** City Oil Private…
- **Advocates:** Debasish…

## Timeline

- **2019-05-11 — First Purchas…**: Purchase Order Number COPL/AIL/02/19-20 was issued by the Corporate Debtor upon the…
- **2019-05-29 — First Invoi…**: The first invoice is…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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