LexM/S S.S. ENGINEERS versus HINDUSTAN PETROLEUM CORPORATION LTD. & ORS.
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A B C D E F G H 391 [2022] 18 S.C.R. 391 391 M/S S.S. ENGINEERS v. HINDUSTAN PETROLEUM CORPORATION LTD. & ORS. (Civil Appeal No. 4583 of 2022) JULY 15, 2022 [INDIRA BANERJEE AND V. RAMASUBRAMANIAN, JJ.] Insolvency and Bankruptcy Code, 2016 – ss.7-9 – Held: NCLT, exercising powers u/s.7 or s.9, is not a debt collection forum – IBC tackles and/or deals with insolvency and bankruptcy – It is not the object of the IBC that Corporate Insolvency Resolution Process (CIRP) should be initiated to penalize solvent companies for non- payment of disputed dues claimed by an operational creditor – There are noticeable differences in the IBC between the procedure of initiation of CIRP by a financial creditor and initiation of CIRP by an operational creditor – On a reading of ss.8 and 9, it is patently clear that an Operational Creditor can only trigger the CIRP process, when there is an undisputed debt and a default in payment thereof – If the claim of an operational creditor is undisputed and the operational debt remains unpaid, CIRP must commence, for IBC does not countenance dishonesty or deliberate failure to repay the dues of an Operational Creditor – However, if the debt is disputed, the application of the Operational Creditor for initiation of CIRP must be dismissed – In the present case, there was a pre-existing dispute with regard to the alleged claim of the appellant-Operational Creditor against HPCL (respondent no.1) or its wholly owned subsidiary HBL – Adjudicating Authority (NCLT) clearly fell in error in admitting the application filed by the appellant u/s.9 as Operational Creditor, for initiation of the CIRP against HBL – NCLAT rightly allowed the appeal filed on behalf of HBL – No grounds to interfere with the impugned judgment of the NCLAT. Mobilox Innovations Private Limited v. Kirusa Software Private Limited (2018) 1 SCC 353 : [2017] 10 SCR 1006; K Kishan vs. Vijay Nirman Co. (P) Ltd. (2018) 17 SCC 662 : [2018] 10 SCR 959 – relied on. A B C D E F G H 392 SUPREME COURT REPORTS [2022] 18 S.C.R. Case Law Reference [2017] 10 SCR 1006 relied on Para 16 [2018] 10 SCR 959 relied on Para 18 CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4583 of 2022. From the Judgment and Order dated 10.01.2022 of the National Company Law Appellate Tribunal, New Delhi in Company Appeal (AT) (Insolvency) No. 332 of 2020. Ratnanko Banerjee, Sanjeev Sen, Sr. Advs., Ms. Poonam Verma, Sidharth Sethi, Ms. Sakshi Kapoor, Avinash Das, Advs. for the Appellant. Tushar Mehta, SG, Sanjay Kapur, Ms. Megha Karnwal, Arjun Bhatia, Advs. for the Respondents. The following Order of the Court was passed: ORDER This appeal is against a judgment and order dated 10th January, 2022 passed by the National Company Law Appellate Tribunal, Principal Bench, New Delhi allowing Company Appeal (AT)(Insolvency) No. 332 of 2020 filed by the Respondent No.1 Hindustan Petroleum Corporation Limited (HPCL) and setting aside the order dated 12.02.2020 passed by the National Company Law Tribunal (NCLT), Kolkata, admitting an application filed by the appellant under Section 9 of the Insolvency and Bankruptcy Code (IBC) as Operational Creditor, for initiation of the Corporate Insolvency Resolution Process (CIRP) against HPCL Biofuels Ltd. (HBL), a wholly owned subsidiary of HPCL. The NCLAT directed the Adjudicating Authority NCLT to close the proceedings for CIRP initiated against HBL. 2. On or about 15.11.2018, the appellant filed an application for initiation of CIRP against HBL under Section 9 of the IBC in the Kolkata Bench of the NCLT. On 07.03.2019, HBL filed its reply to the said application made by the appellant and the appellant also filed a rejoinder thereto. 3. By an order dated 12.02.2020, the Adjudicating Authority (NCLT) admitted the application for initiation of CIRP filed by the appellant, rejecting the contention raised by HBL that there were pre- A B C D E F G H 393 existing disputes between the parties in respect of the claim of the appellant. 4. From the List of Dates filed by the appellant, it appears that between 27.06.2012 to 30.08.2012, various tenders were floated by HBL for enhancing the capacity of the Boiling Houses of HBL at Lauryia and Sugauli from 1750 TCD to 3500 TCD. 5. The appellant submitted its offer pursuant to the tenders. On or about 15.10.2012, four purchase orders were issued to the appellant in relation to the tender work of enhancing the capacity of the Boiler Houses. On 01.11.2012, Purchase Orders were issued by HBL for enhancing the
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