Hindustan Petroleum Corporation ... vs C Gems And Jewels Pvt. Ltd
- CitationCompany Appeal (AT) (Insolvency) No. 1215 of 2025
Ratio decidendi
The rule this decision rests on
The supply of petroleum products to a corporate debtor under CIRP that is running as a going concern is treated as critical, and the adjudicating authority may direct the supplier to resume and continue supply during the moratorium period, with the cost of such supply treated as a CIRP expense to be paid in priority to other CIRP costs in resolution. Where a supplier is directed to continue supply under such an arrangement, the terms of the interim arrangement, including credit terms and daily application of cash receipts to clearing the supplier's dues, may be fixed by the adjudicating authority as necessary to keep the corporate debtor operating, and the appeal may be disposed of on the basis of the parties' recorded undertakings that the arrangement will operate as directed pending a decision of the Committee of Creditors.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Hindustan Petroleum Corporation Ltd. ...Appellant Versus C Gems and Jewels Pvt. Ltd. & Anr. ...Respondents
Present: For Appellant : Mr. N. Venkatraman, ASG with Mr. T. Sundar Ramanathan, Mr. Vivek Pandey, Mr. Krishan Singhal, Ms. Sukanya Viswanathan, Mr. Shivshankar, Advocates. For Respondents : Advocate for RP present.
ORDER
(Hybrid Mode)
14.08.2025: This appeal has been filed against order dated 31.07.2025
by which order the Adjudicating Authority has allowed the application IA
(I.B.C.)/1223(CH)2025 by issuing following directions in Para 3:
"3. Having considered the facts, we are of the view that supply of the petroleum products is very critical for running the CD as a going concern during the moratorium period also and we therefore, direct the Respondent-HPCL to resume and continue its supply which has been stopped w.e.f. 07.07.2025 during the moratorium period. It is clarified that the cost of the supply of the petroleum product during such period would be a part of the CIRP expenses which ultimately will have to be paid in priority together with other CIRP cost while arriving at resolution of the CD. Nevertheless, in this matter, we consider it appropriate to direct that the Respondent-HPCL shall supply the
Cont'd.../ required petroleum products with a credit of minimum 4 days and the Applicant IRP/RP will ensure that the cash received on any day by selling the petrol and CNG etc. through the filling stations is first of all utilized to make the payment to the Respondent-HPCL the very next day itself. Respondent-HPCL is at liberty to place any of their official in the premises of the CD to ensure the compliance of the dealer and to make inspections as per the provisions of the relevant Act and Rules as referred to by the Ld. Counsel."
2. Shri N. Venkataraman, ASG appearing for the Appellant submit that
the Company has already sent a Memorandum of Understanding to be
executed between the Company and the IRP to run the Petrol Pump as
Company Operated Petrol Pump under which the Corporate Debtor shall not
suffer any loss since they will be entitled to receive commission.
3. Learned counsel for the IRP submits that for executing such agreement
approval of CoC shall be required, hence, IRP on its own cannot enter into
any agreement. It is submitted by learned counsel for the IRP that under the
orders passed by the Adjudicating Authority entire receipt of the cash on daily
basis has to be given on the very next day to the Company towards the supply
received by the Petrol Pump. It is submitted that said interim arrangement
shall continue till decision is taken by the CoC.
4. We have considered the submissions of learned counsel for the parties
and perused the record.
Comp. App. (AT) (Ins.) No. 1215 of 2025 2 of 3
5. The Corporate Debtor is in CIRP and IRP is taking steps to run the
Corporate Debtor as going concern and the arrangement which has been
directed by the Adjudicating Authority shall ensure running of the Petrol
Pump. We record the submission of the Appellant that daily receipt of all cash
amount shall be utilized and handed over to the Company on the next day
utilize the receipt for clearing the dues of the Company.
6. In view of the above, we see no reason to keep the appeal pending.
Appeal is disposed of accordingly.
7. Learned counsel for the Appellant submits that the IRP has initiated a
Contempt Proceeding. In view of the above, the Contempt Proceeding be not
prosecuted any further.
[Justice Ashok Bhushan] Chairperson
[Arun Baroka] Member (Technical) Archana/nn
Comp. App. (AT) (Ins.) No. 1215 of 2025 3 of 3
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