Resolution
This issue occurs if a virtual machine that is meant for VMware Hosted products such as VMware Workstation, VMware Player or VMware Fusion is powered-on on a VMware ESX host.
The underlying format used to store virtual machines on VMware Hosted products differs from the format used to store virtual machines on VMware ESX hosts.
To import a virtual machine stored on a VMware Hosted product to a VMware ESX host, the virtual machine should first be converted using VMware vCenter Converter. For more information on conversion, see the VMware vCenter Converter documentation.
Why this happen to me :
This error comes when thin provisioned VMDK file is imported as new vm from backup, or clone VM.
Reimport the VM using the "zeroedthick"
How to :-
Connect to the ESX host using an SSH session or ILO/DRAC to use this command.
Go to /vmfs/volumes/yourdatastore/
and then give the following command
vmkfstools -i Ubuntu-server.vmdk -d zeroedthick Ubuntu-server1.vmdk
after that remove Ubuntu-server.vmdk and rename Ubuntu-Server1.vmdk to Ubuntu-Server.vmdk and continue the process of import it will work.
"zeroedthink" a flat file of full size is created. ( not thin provisioned)