NCLT Dismisses Operational Creditor's Insolvency Plea Against Burnpur Cement Limited

NCLT Dismisses Operational Creditor's Insolvency Plea Against Burnpur Cement Limited​

The National Company Law Tribunal (NCLT) bench in Kolkata ruled on April 20, 2026, dismissing an application filed by Mittal Polysacks Private Limited against Burnpur Cement Limited, thereby concluding the insolvency proceedings related to the matter. The Tribunal found that a pre-existing dispute existed regarding the operational debt claimed by the creditor.

The proceedings concerned an application filed under the Insolvency and Bankruptcy Code, 2016, initiated by the Operational Creditor (OC), Mittal Polysacks Private Limited, against the Corporate Debtor (CD), Burnpur Cement Limited.

Core Dispute and Financial Claim​

Mittal Polysacks Private Limited claimed an outstanding operational debt arising from the supply of polypropylene cement bags to the CD. The OC stated that the supplies were made between January 16, 2016, and December 23, 2016.

The operational debt claim detailed by the Operational Creditor aggregates the following amounts:


The OC had stated that despite issuing a demand notice on September 29, 2021, the CD failed to raise any dispute or establish any pre-existing dispute regarding the alleged operational debt.

Tribunal's Findings on Dispute​

The Tribunal, however, considered the submissions from the CD and ultimately ruled that substantial and bona fide disputes existed, rendering the petition unsustainable under the Insolvency and Bankruptcy Code.

Key points that formed the basis of the Tribunal's finding included:

• Lack of Formal Agreement: The CD emphasized that there was no written agreement or purchase order for the alleged supply of cement bags, describing the initial arrangement as 'verbal'.
• Missing Documentation: The Tribunal noted the absence of primary evidence of delivery, such as transport receipts, lorry challans, or goods receipt notes, to substantiate the actual delivery of goods.
• Pre-existing Dispute: The CD submitted that the outstanding entry in favor of the OC was subsequently reversed in the Company's financial statements prior to the demand notice date. This reversal constituted a clear repudiation of liability preceding the Section 8 notice, establishing a pre-existing dispute.
• Operational Flaws: The CD also pointed out discrepancies in the accounts, including the inconsistency between invoices prior to 2016 and the CD's balance sheet for FY 2015-16, which showed zero outstanding amount in favor of the OC.

The Tribunal concluded that the issues raised—including the non-existence of primary supporting documents, the reversal of entries, and the nature of the transaction—were neither illusory nor spurious and required detailed evidence and adjudication, which falls outside the limited summary jurisdiction of the Section 9 application.

Consequently, the NCLT dismissed and disposed of the petition, confirming that the Corporate Debtor remains operational and is not subject to the insolvency proceedings.