In the matter of C Gems and Jewels Private Limited
- CitationCP(IB) No.176-Chd-Pb-2024
Ratio decidendi
The rule this decision rests on
The supply of essential goods and services to a corporate debtor during the moratorium is a matter the Tribunal may direct the supplier to continue where such supply is critical to running the corporate debtor as a going concern and preserving its value; the Tribunal is empowered to make such a direction notwithstanding that the supplier has stopped supply for non-payment of outstanding dues prior to the commencement of the CIRP. Costs of supply of goods or services provided to the corporate debtor during the moratorium period under such a direction are to be treated as part of the CIRP expenses, to be paid in priority to other claims in arriving at a resolution of the corporate debtor, while the supplier's claim for pre-CIRP outstanding dues is to be filed as a claim before the Resolution Professional/IRP.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
IN THE NATIONAL COMPANY LAW TRIBUNAL CHANDIGARH (COURT – II) (Through Hybrid Mode) Item No.101 IA(I.B.C)/1223(CH)2025 In CP (IB) No.176/Chd/Pb/2024 (Admitted) IN THE MATTER OF: Punjab and Sind Bank … Petitioner Versus C Gems And Jewels Private … Respondent Limited Under Section: 7, 60(5) IBC 2016 Order delivered on 31.07.2025 CORAM: SHRI. K. K. SINGH, SHRI. K. BISWAL, HON’BLE MEMBER (T) HON’BLE MEMBER (J) PRESENT:- For the IRP-Applicant in : Mr. Aalok Jagga, Mr. Shubham Gupta, Mr. IA(I.B.C)/1223(CH)2025 Sahil Lohan, Advocates along with Mr. Navneet Gupta, IRP : Mr. Raman Sharma, Advocate For the Respondent in IA(I.B.C)/1223(CH)2025 ORDER IA(I.B.C)/1223(CH)2025 1. This is an Application filed by the RP seeking direction to the Respondent-Hindustan Petroleum Corporation Limited(HPCL) to continue supply the petroleum products to their filling stations. The Corporate Debtor has been put into CIRP vide order dated 11.07.2025. As recorded in the order dated 29.07.2025, the supply of the petrol and CNG was stopped to the filling stations of CD w.e.f. 07.07.2025 i.e. few days prior to initiation of CIRP.
Atiqur Rehman 31.07.2025
2. The Ld. Counsel for the Applicant Mr. Aalok Jagga has referred to the provisions of Section 14(2) and 14(2A) of the IBC and submits that supply of the petrol and CNG is essential to run the CD as a going concern during the moratorium period. In the context, we have heard the Ld. Counsel Mr. Raman Sharma appearing for the Respondent-HPCL. He refers to the Rules and Regulations of the Petroleum Act, 1934 and Petroleum Rules, 2022 and submits that though the land on which the filling stations are set up is owned by the CD but as per the policy of the Respondent-HPCL, the same is given to the Respondent-HPCL on lease for 30 years. He submits that the petrol pump etc. which are set up on that land is basically owned by the Respondent Company itself but the same are given to the CD being its dealer as per the dealership agreement. He also submits that as per the agreement and the relevant Rules, the supply of the petroleum products are made on payment of advance, however, the Respondent-HPCL within its own discretion have been supplying it on credit also to some of its dealers keeping in view the performance and relationship with such dealers. In the context, it is submitted that for some time, the CD was also given the facility of the credit, however, the CD failed to clear the outstanding of Rs.3.48 Crores and therefore, the supply was stopped. We have noted the submission so made by the Ld. Counsel. As regards the outstanding amount, Respondent Company will have to file its claim before the IRP/RP. The issue herein is of supply of critical goods and services required to preserve the value of the CD and to make it as a going concern.
Atiqur Rehman 31.07.2025
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 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. 4. Accordingly, IA(I.B.C)/1223(CH)2025 stands allowed and disposed of.
Sd/- Sd/- (K. K. SINGH) (K. BISWAL) MEMBER (TECHNICAL) MEMBER (JUDICIAL)
Atiqur Rehman 31.07.2025
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