On 2 November, the National Company Law Tribunal (NCLT), Mumbai, admitted a voluntary insolvency petition filed by West Gujarat Expressway Limited under Section 10 of the Insolvency and Bankruptcy Code, 2016 (IBC), initiating the corporate insolvency resolution process (CIRP).
A Bench of Judicial Member Ashish Kalia and Technical Member Banwari Lal Meena held that acknowledgment of debt in audited financial statements can extend limitation under Section 18 of the Limitation Act, 1963, read with Section 238A of the IBC. It said:
“As to limitation, the dues have remained outstanding since October 2018 and have been acknowledged in the audited financial statements, including those for FY 2024–25. Under Section 18 of the Limitation Act, 1963, read with Section 238A of the Code, a written acknowledgment made before expiry of the prescribed period gives rise to a fresh period of limitation. The Petition is therefore not barred by limitation.”
West Gujarat Expressway Limited is a special purpose vehicle incorporated by IL&FS Transport Network Limited (ITNL) and Infrastructure Leasing & Financial Services Limited (IL&FS) to develop, operate and maintain the Jetpur–Gondal–Rajkot section of National Highway 8B under a 20-year build-operate-transfer concession agreement with the National Highways Authority of India (NHAI).
The NHAI terminated the project in December 2021, and the project was handed over in April 2022. West Gujarat Expressway subsequently ceased significant business operations. In December 2022, the National Company Law Appellate Tribunal (NCLAT) classified the entity as a 'Red Entity' under the IL&FS resolution framework.
The resolution consultant recommended initiating insolvency proceedings against West Gujarat Expressway in October 2024. The proposal was subsequently approved through the requisite corporate and group-level processes.
Earlier, West Gujarat Expressway had approached the NCLT in connection with insolvency proceedings. By an order dated 27 May 2025, the Tribunal permitted the filing subject to distribution in accordance with the Revised Distribution Framework.
Subsequently, West Gujarat Expressway stated that the final distribution of Rs. 79.05 crore had been completed on 10 December 2025. It submitted that no winding-up or insolvency proceedings were pending against it and that it was not ineligible to initiate proceedings under Section 11 of the IBC.
The Tribunal examined West Gujarat Expressway Limited's audited financial statements for the financial year 2024–25, which reflected assets of Rs. 85.34 crore against liabilities of Rs. 319.81 crore.
It noted that West Gujarat Expressway's debt in default stood at approximately Rs. 227.20 crore as of 14 January 2026, exceeding the threshold prescribed under Section 4 of the IBC. The outstanding dues were also acknowledged in the entity's audited financial statements.
Further, the Bench observed that the pending investigation by the Serious Fraud Investigation Office (SFIO) did not prevent admission of the insolvency petition. However, it directed the Interim Resolution Professional to take note of the investigation and examine the applicable provisions of the IBC.
Accordingly, the NCLT admitted the petition and initiated CIRP against West Gujarat Expressway.
For Applicant: Adv. Kaustubh Srivastava
For NHAI: Adv. Nishant Awana a/w Adv. Ekta Kundu