# In the matter of Swastik Oil Refinery Private Limited CP (IB) No. 119-KB-2021

> NCLT judgment dated 2022-03-15. Citation: TCN-2022-NCLT-03736. Meher Oil Industries Limited, the Operational Creditor, filed a petition under Section 9 of the…

- **Court:** NCLT
- **Order date:** 15 Mar 2022
- **Citation:** TCN-2022-NCLT-03736
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/swastik-oil-refinery-private-limited-cp-ib-no-119-kb-2021-c2d7855f

## Summary

### Background

Meher Oil Industries Limited, the Operational Creditor, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, against Swastik Oil Refinery Private Limited, the Corporate Debtor, for failing to make payment of a sum of Rs. 65,04,438 as of March 31, 2018, plus interest at 25% per annum from April 1, 2018, to July 31, 2020, totaling Rs. 1,02,98,692. The Operational Creditor supplied crude rice bran oil to the Corporate Debtor between November 28, 2017, and December 7, 2017, and raised invoices. The Corporate Debtor claimed deficiencies in the quality of the oil and disputed the interest rate.

## Facts

Meher Oil Industries Limited (Operational Creditor) filed a petition against Swastik Oil Refinery Private Limited (Corporate Debtor) under Section 9 of the Insolvency and Bankruptcy Code, 2016. The Operational Creditor supplied crude rice bran oil to the Corporate Debtor between November 28, 2017, and December 7, 2017, raising invoices. The Corporate Debtor defaulted on payments totaling Rs. 65,04,438 as of March 31, 2018, plus interest at 25% per annum from April 1, 2018, to July 31, 2020, amounting to Rs. 37,94,254, bringing the total due to Rs. 1,02,98,692 as of July 31, 2020. A demand notice under Section 8 of the Code was issued on August 12, 2020. The Corporate Debtor claimed that the oil supplied was not as per the agreed quality and FFA standards, and that

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted on …

**Ratio:** Section 9 of the Insolvency and Bankruptcy Code, 2016 allows an operational creditor to

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**Reasoning:** The court found that the Corporate Debtor had defaulted on payments after December 7,

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**Interpretation:** The court interpreted the provisions of Section 9 of the IBC to mean that if a

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**Application:** The court applied the ratio to the facts and determined that the Corporate

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## Parties

- **Judges:** Rajasekha…; Balraj…
- **Appellants:** Meher Oil…
- **Respondents:** Swastik Oil…

## Timeline

- **2017-11-28 — Supply of Crude Rice…**: Operational Creditor supplied crude…
- **2017-12-07 — Supply of Crude Rice…**: Operational Creditor supplied crude…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 8 — Insolvency resolution by operational creditor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-8)

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