NCLT Ahmedabad Admits Astron Paper To Insolvency Over Rs 1.77 Crore Dues

The Ahmedabad bench of the National Company Law Tribunal (NCLT) has admitted Astron Paper & Board Mill Limited to insolvency proceedings over a Rs 1.77 crore payment default claimed by an Australian supplier of corrugated waste paper.

Judicial Member Chitra Hankare and Technical Member Dr. V.G. Venkata Chalapathy passed the order on May 11.

Empire Sony PTY Limited, the operational creditor, said the default arose from supply of corrugated waste paper consignments under sales orders dated March 28, 2023, September 15, 2023, and September 22, 2023. It claimed dues of Rs 1.77 crore, including a principal amount of Rs 1.61 crore and interest of Rs 16.75 lakh.

The creditor said invoices were raised in October 2023 and collection payment advice was issued in November 2023.

Despite receiving the consignments, Astron allegedly did not clear the outstanding dues. The operational creditor relied on email correspondence in which payment was sought, a demand notice issued under Section 8 of the Insolvency and Bankruptcy Code on July 31, 2024, a bank certificate dated September 13, 2024 confirming that no payment had been received, and a NeSL demand notice dated November 12, 2024.

Astron resisted the insolvency plea, contending that the application was defective as it was not accompanied by an authenticated record of default from an information utility.

The company also claimed that the dispute predated the insolvency proceedings. It alleged that while it had contracted for 1,500 metric tonnes of material, only 1,050.53 metric tonnes were supplied, leaving a shortfall of 449.47 metric tonnes.

Astron further pointed to alleged quality issues, including moisture content beyond agreed limits, inadequate loading, outthrows in excess of contractual norms, and deviation from the agreed grade, which it said disrupted production and led to financial losses.

In rejoinder, Empire Sony denied the existence of any pre-existing dispute, placed on record a NeSL default record dated August 7, 2025, and relied on shipping documents to show delivery. It argued that the alleged shortfall was only 1.85%, within accepted tolerance limits.

The Tribunal noted that Astron had accepted the consignments and sought deferment of payment.

“We view the response of the CD as a belated and moonshine response and denial to make payment of debt due,” the Tribunal held.

The bench also noted that the purchase orders did not prohibit short shipment and that the parties had agreed to a USD 22,000 reduction in the claim.

“The CD did not give any reply to the demand notice dated 31.7.2024 to the OC and also did not authenticate dispute in the NeSL platform,” the tribunal said.

Holding that the principal outstanding alone crossed the statutory threshold for insolvency proceedings, the tribunal admitted the plea, imposed a moratorium under Section 14 of the Code, and appointed Atul Jashwantrai Sheth as Interim Resolution Professional.

The IRP has been directed to take control of the company's assets and records, manage the company as a going concern, and file periodic progress reports before the tribunal.