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NCLT Kolkata Admits Oscorp Industries Into CIRP After Rejecting Joint Venture Defence for Financial Debt Claim

  • Writer: Kaustav Chowdhury
    Kaustav Chowdhury
  • 3 days ago
  • 4 min read

The National Company Law Tribunal (NCLT), Kolkata Bench, in an order dated August 10, 2026, admitted Oscorp Industries Private Limited, a Howrah based railway wagon rebuilder, into the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC). The bench of Labh Singh, Member (Judicial), and Rekha Kantilal Shah, Member (Technical), passed the order in C.P. (I.B.) No. 126/KB/2025 on a Section 7 petition filed by Gurgaon based Stemztech Industries Private Limited, claiming an unpaid financial debt of Rs 2.74 crore. The tribunal rejected the corporate debtor's principal defence that the amounts were equity style investments in a joint venture rather than financial debt.


Background: The Transaction and the Parties


Oscorp Industries, formerly Subrata Iron Foundry, describes itself as a manufacturer and upgrader of railway wagons and wagon components serving major divisions of Indian Railways. The company claims more than 15 years of experience in wagon rebuilding, covering fabrication, modernisation and retrofitting, with origins tracing to 1973. It was incorporated on April 17, 2013, and is registered under the Registrar of Companies, Kolkata, with its registered office at Balitikuri, Surkimill, Howrah.


The dispute arises from a memorandum of understanding dated December 20, 2022, under which Stemztech agreed to provide financial assistance to Oscorp for bidding on tenders floated by Indian Railways. An addendum dated January 30, 2023, set out further terms for executing two existing railway contracts covering covered and open wagon types. Two loan agreements followed, dated February 11 and March 10, 2023, together providing for Rs 2.5 crore at 10 percent interest per annum. Stemztech disbursed Rs 2.25 crore in tranches between February and March 2023. Stemztech issued a demand notice on May 30, 2023, for Rs 2,51,28,221 and in its application claimed Rs 2,74,91,034 as due and payable.


The Joint Venture Defence and the Corporate Debtor's Arguments


Oscorp, represented by senior advocate Joy Saha, contended that no debtor creditor relationship existed and that Stemztech did not qualify as a financial creditor under Section 5(8) of the IBC. The company argued that the real arrangement was a joint venture in which the parties agreed to share profit and loss equally over three calendar years of railway contracts, with Stemztech as the investing partner and Oscorp as the working partner.


The loan agreements, Oscorp argued, were a paper formality. The company pointed to emails of January 2023 in which it told Stemztech that an interest free loan could not be advanced between two Indian companies under the Companies Act, 2013, making it difficult to record the investment in its books, and that the payments would bear no interest and be adjusted within six months. Oscorp also relied on a letter dated July 17, 2024, stating that Stemztech was to invest approximately Rs 4.8 crore under an agreed cash flow against a 50:50 profit share. Oscorp's counsel cited the NCLAT ruling in Realpro Realty Solutions Pvt. Ltd. v. Sanskar Projects and Housing Ltd., where the appellate tribunal held that a party pooling resources in an agreed ratio and sharing profits, losses and costs could not claim financial creditor status under Section 5(7).


What the Tribunal Held


The NCLT rested its finding primarily on Clause 19 of the February 11, 2023, loan agreement, which provides that the loan agreement constitutes the entire agreement between the parties and supersedes all previous oral or written communications on its subject matter. The bench held that even assuming the MoU and addendum survived, the addendum itself contemplated Stemztech raising invoices for project management or business consultation fees equal to 50 percent of project profit, with interest on the loan to be adjusted from overall profits. The tribunal read this as consistent with a lending relationship rather than an equity partnership.


The bench also relied on two emails from Oscorp: one dated August 23, 2025, agreeing to refund the amount paid by Stemztech, and another dated September 11, 2025, acknowledging liability and requesting time until the Railways released payment. These admissions were inconsistent with the claim that no debt existed. Holding that Stemztech qualified as a financial creditor, that the loans had been advanced, and that default had occurred, the bench admitted the petition under Section 7(5)(a) of the IBC.


Previous Insolvency History and Tribunal Directions


Notably, Oscorp had been admitted into CIRP once before, on January 4, 2024, on a Section 9 application by one Rajendra Kumar Agarwal. That process was closed following a settlement, with the closure approved by the NCLAT on February 8, 2024. Stemztech cited this history to counter Oscorp's supplementary affidavit claiming the company was solvent and a healthy going concern.


The tribunal directed Stemztech to deposit Rs 3 lakh with the interim resolution professional (IRP) within three days to meet initial process costs. Raj Singhania of Apex Insolvency Professionals LLP, Kolkata, was appointed as the IRP, and a moratorium under Section 14 of the IBC was declared. Per the public announcement published on August 13 in The Economic Times (Kolkata edition) and the Bengali daily Ekdin, the insolvency commencement date is August 10, 2026, creditors must submit claims with proof by August 24, 2026, and the estimated date of closure of the process is February 6, 2027.


Key Takeaways


  • The NCLT Kolkata has admitted Oscorp Industries into CIRP under Section 7 of the IBC on a financial debt claim of Rs 2.74 crore filed by Stemztech Industries.

  • An entire agreement clause in a loan document can override prior MOUs and side arrangements that attempt to recharacterise a loan as a joint venture investment.

  • Emails from the corporate debtor acknowledging liability and agreeing to refund amounts were treated as strong evidence against the joint venture defence.

  • A prior CIRP admission and settlement does not immunise a company from subsequent insolvency proceedings if a fresh default is established.

  • Corporate debtors attempting to recharacterise financial debt as equity must produce contemporaneous documentary evidence stronger than self serving correspondence.

  • The moratorium under Section 14 has been declared, with the claims submission deadline set at August 24, 2026.


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