NCLT Indore Rejects Section 9 Plea by ADM Agro, Holds Disputed Contractual Claims Beyond IBC Summary Jurisdiction

April 7, 2026 : The National Company Law Tribunal (NCLT), Indore Bench, has dismissed a Section 9 application filed by ADM Agro Industries Kota & Akola Pvt. Ltd. seeking initiation of the corporate insolvency resolution process (CIRP) against Bari Foods Pvt. Ltd., holding that the dispute raised involves contested questions of fact unsuitable for summary adjudication under the Insolvency and Bankruptcy Code, 2016.

The operational creditor had claimed a default of ₹2.56 crore arising from an alleged transaction for supply of 500 metric tonnes of crude palm oil, asserting that the corporate debtor failed to lift the goods, forcing a resale at a lower price and resulting in losses. The date of default was stated as December 13, 2022.

However, the corporate debtor disputed the very foundation of the claim, contending that no binding contract was ever executed and that negotiations through a broker did not culminate in a concluded agreement. It was further argued that the claim represented unadjudicated damages, which do not qualify as an “operational debt” under the Code.

The Tribunal framed key issues including the existence of a binding contract, substantiation of the claimed amount, and whether the alleged debt was crystallised and undisputed. On the first issue, the Bench noted that execution of the commercial terms and the authority of the broker were specifically denied by the respondent. Given the disputed evidentiary value of documents such as commercial terms, emails, and transactional records, the Tribunal held that the existence of a concluded contract could not be determined without detailed examination of evidence.

With respect to the claim amount, the Tribunal found that ADM Agro failed to produce independent evidence of the alleged resale transaction or prevailing market prices. The claim was based largely on internal calculations and debit notes, which lacked corroboration. As such, the quantification of liability was held to be unilateral and unsubstantiated.

On the nature of the debt, the Bench observed that the claim arose from an alleged breach of contract and represented loss computed on price differences. Since both the existence of the contract and the computation of loss were disputed, the claim could not be treated as a crystallised and undisputed operational debt.

Relying on the Supreme Court’s ruling in Mobilox Innovations Pvt. Ltd. v. Kirusa Software Pvt. Ltd., the Tribunal reiterated that an application under Section 9 must be rejected where a genuine pre-existing dispute exists. It further noted the pendency of parallel proceedings before a Commercial Court, observing that such disputes require detailed adjudication and cannot be resolved in summary insolvency proceedings.

Emphasising the limited scope of Section 9, the Tribunal held that insolvency proceedings are not intended for adjudicating contractual disputes or determining damages requiring evidentiary analysis. Concluding that the dispute was real and not spurious, and that the claim was neither crystallised nor undisputed, the Tribunal dismissed the application as not maintainable.

Case Details:

• Case: ADM Agro Industries Kota & Akola Pvt. Ltd. v. Bari Foods Pvt. Ltd.
• Case No.: CP(IB) No. 56 of 2023
• Bench: Indore
• Coram: Brajendra Mani Tripathi (Member Judicial), Man Mohan Gupta (Member Technical)
• Order Date: April 7, 2026