ORDER

Per: Bidisha Banerjee, Member (Judicial) 1. The Court convened via hybrid mode.

2. This is a Company Petition filed under section 9 of the Insolvency and Bankruptcy Code, 2016 (‘the Code’) read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 by Mr. Tariq Rafique Lambe, Legal Executive, Gandhar Oil Refinery (India) Limited (‘Operational Creditor’ or ‘GORIL’) duly authorised vide Board Resolution dated 23 December, 2019¹ for initiation of Corporate Insolvency Resolution Process (‘CIRP’) against City Oil Private Limited (‘Corporate Debtor’)

3. The present Petition was filed on 07 April, 2021 before this Adjudicating Authority. The total amount claimed in default is Rs.1,04,39,547/- (Rupees One Crore Four Lakh Thirty Nine Thousand Five Hundred Forty Seven only) [Principal – Rs.64,03,566/- and Interest – Rs. 40,35,941/-]. Details of the invoices that were raise by the Operational Creditor are, as follows; Annexure – C, Page 31 of the Petition.

4. In part II of the Petition the authorized share capital of the Corporate Debtor is Rs. 2,50,00,000/- (Rupees Two Crore Fifty Lakh only) with subscribed share capital of Rs.80,92,000/- (Rupees Eighty Lakh Ninety Two Thousand only). Part – IV of the Petition deals with the particulars of the Operational Debt.

5. Submissions by the Ld. Counsel appearing on behalf of the Operational Creditor

5.1 The Operational Creditor is a public Limited Company engaged in processing petroleum products to manufacture mineral oils, liquid paraffin, petroleum jelly, rubber process oils etc. The Operational Creditor also sources certain products from third party suppliers for direct sales to its customers. Whereas, the Corporate Debtor is engaged in manufacturing & trading of lubricating oil & grease.

5.2 In view of the business relationship between the Operational Creditor and the Corporate Debtor, the Corporate Debtor would periodically place orders with the Operational Creditor for supply of Divyol 75 and Divyol 480 (SN 500).

5.3 As the business was growing between the parties, the orders would be processed by the Operational Creditor, products would be delivered to the Corporate Debtor, and simultaneously, the Operational Creditor would raise invoices. As the business was growing over a period of time, the account of the Corporate Debtor had been a running account and the payment made by the Corporate Debtor to the Operational Creditor from time to time were being adjusted towards the then outstanding invoices of the Corporate Debtor.

5.4 In the usual course of business between April 2018 to August 2018, the Corporate Debtor issued 03 (three) purchase orders being; (i) Purchase Order No. (i) COPL/GO /02/18-19 dated April 16, 2018 (ii) COPL/GO/03/18-19 dated May 10, 2018 (iii) COPL/GO/05/18-19 dated August 18, 2018 for supply the said products. The products were supplied to the Corporate Debtor as per the Purchase Orders and same were accepted by without any demur.

5.5 Simultaneously, the Operational Creditor raised invoices in respect of the Product supplied amounting to Rs.73,56,627/- on the Corporate Debtor (invoices) and the same were accepted by the Corporate Debtor. On account of prior business transactions as on April 28, 2018 an amount of Rs.3,61,91,915.35 was due and payable by the Corporate Debtor to th