December 10, 2025 : The National Company Law Appellate Tribunal, New Delhi, has reaffirmed that once an operational debt is recorded as “disputed” in the records of an Information Utility, an insolvency application under Section 9 of the Insolvency and Bankruptcy Code, 2016 must be rejected outright. The appellate tribunal dismissed an appeal filed by Accurate Transheat Pvt. Ltd., upholding the decision of the National Company Law Tribunal, Ahmedabad Bench, which had declined to admit the insolvency petition against Sufi International Pvt. Ltd.
The appeal was decided by a Bench comprising Justice Ashok Bhushan, Chairperson, and Barun Mitra, Technical Member. The tribunal emphasised that a Section 9 proceeding is not meant to resolve contractual or commercial disputes and that insolvency forums must operate strictly within the statutory framework laid down under the Code.
The case arose from a commercial supply arrangement between Accurate Transheat Pvt. Ltd. and Sufi International Pvt. Ltd., under which goods were supplied during the financial year 2020–21. The operational creditor claimed that around ₹2.08 crore remained unpaid and issued a demand notice in March 2023 seeking payment of the alleged dues.
Sufi International, however, denied any outstanding liability. It disputed the purchase orders and invoices relied upon by Accurate Transheat and asserted that the cheques referred to by the operational creditor were issued only as security, not towards discharge of any debt. It was also pointed out that criminal proceedings under the Negotiable Instruments Act relating to cheque dishonour were already pending between the parties.
When insolvency proceedings were initiated under Section 9, the NCLT, Ahmedabad refused to admit the application after noting that the alleged debt had been marked as “disputed” in the records of the Information Utility, National E-Governance Services Limited (NeSL). The dispute was expressly reflected in the NeSL certificate, where the corporate debtor had denied the existence of any debt.
Challenging this rejection, Accurate Transheat approached the appellate tribunal, relying on the Supreme Court’s decision in Mobilox Innovations Pvt. Ltd. v. Kirusa Software Pvt. Ltd. It argued that the dispute raised by the corporate debtor was illusory and that the adjudicating authority was required to examine whether the defence was genuine or merely a moonshine plea.
Rejecting this contention, the NCLAT held that Section 9(5)(ii)(d) of the Code leaves no discretion with the adjudicating authority once there is a record of dispute in the Information Utility. The tribunal observed that, in such circumstances, the insolvency court cannot go into the merits or plausibility of the dispute. It reiterated that insolvency proceedings cannot be used as a substitute for recovery mechanisms or for adjudicating contested claims.
The appellate tribunal concluded that the NCLT had rightly rejected the Section 9 application and dismissed the appeal. It clarified, however, that dismissal of the insolvency petition would not prevent the operational creditor from pursuing other remedies available in law.
Cause Title: Accurate Transheat Pvt. Ltd. v. Sufi International Pvt. Ltd.
Case Number: Company Appeal (AT) (Insolvency) No. 1373 of 2025
Coram: Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member)
