# In the matter of Mercator Petroleum Limited

> NCLT judgment dated 2023-11-02. Citation: TCN-2023-NCLT-00863. Bank of Baroda, a financial creditor of Mercator Petroleum Limited, filed an application…

- **Court:** NCLT
- **Order date:** 2 Nov 2023
- **Citation:** TCN-2023-NCLT-00863
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/mercator-petroleum-limited-5a9110c8

## Summary

### Background

Bank of Baroda, a financial creditor of Mercator Petroleum Limited, filed an application challenging the resolutions passed by UTI Structured Debt Opportunities Fund-I (UTI) in the 11th Committee of Creditors (CoC) meeting held on July 11, 2022, regarding the discarding of valuation reports and calling for a fresh valuation report. The applicant sought directions from the Tribunal to discard the valuation reports prepared by the registered valuers and call for a fresh valuation report. The Respondent No.02, Mr. Satish Kumar Gupta, is the Resolution Professional (RP) of the Corporate Debtor, Mercator Petroleum Limited. The application was filed under Rule 11 of the N.C.L.T Rules, 2016.

## Facts

The Corporate Debtor is Mercator Petroleum Limited. The Insolvency Commencement Date (ICD) is August 31, 2020. Bank of Baroda, holding 31.80% voting share, filed an application challenging the CoC's decision to discard valuation reports. UTI, with a 68.20% majority voting share, requested discarding the reports and calling for fresh valuations. The CoC's decision was influenced by changes in the crude oil industry and exchange rates. The price of oil per barrel increased from $43 (August 31, 2020) to $84 (September 19, 2022), and the dollar value changed from INR 73/$ to INR 80/$. The applicant filed I.A. No. 3233/2022 to restrain UTI from abusing its majority voting share. The applicant and UTI mutually agreed to resolve their differences, with a 60:40 proceeds

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## Issues and analysis

### Issue 1: Whether the CoC is justified in discarding the existing valuation reports and seeking fresh …

**Ratio:** The CoC has the prerogative to seek valuations to take commercial decisions. Regulation

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**Reasoning:** The NCLT reasoned that the changes in the oil prices and exchange rates justified the

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**Interpretation:** The interpretation is that while the CoC has the right to seek fresh

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**Application:** In this specific case, the NCLT applied the reasoning that since the parties

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## Parties

- **Judges:** ANURADHA SANJAY…; Kuldip Kumar…
- **Appellants:** Bank of B…
- **Respondents:** Mercator Petroleum…; UTI Structured…

## Timeline

- **2020-08-31 — Insolvency Commencement…**: The Insolvency Commencement Date…
- **2022-07-11 — 11th CoC M…**: UTI proposed discarding valuation…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 31 — Approval of resolution plan](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-31)

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