NCLT Ahmedabad Admits Insolvency Plea Against Gujarat Toolroom Over ₹26.20 Crore Dues

The National Company Law Tribunal (NCLT), Ahmedabad, has admitted an insolvency petition against Gujarat Toolroom Limited over unpaid operational dues of ₹26.20 crore to Naksh Steel Limited.

A bench of Judicial Member Chitra Hankare and Technical Member Dr V G Venkata Chalapathy found that the debt had been acknowledged but remained unpaid due to liquidity constraints.

“The date of default is reckoned as 20.01.2025. It is admitted to have not been paid due to liquidity constraints of the CD respondent,” the bench observed in its September 30 order.

Naksh Steel approached the tribunal under Section 9 of the Insolvency and Bankruptcy Code (IBC), claiming ₹26,20,56,668 in unpaid operational debt.

According to the petition, Naksh Steel supplied products to Gujarat Toolroom under a supply agreement dated December 16, 2024. The supplies were made between January 16 and 20, 2025, and invoices were raised for the consignments.

After repeated reminders failed to secure payment, Naksh Steel issued a demand notice under Section 8 of the IBC on January 20, 2026.

In a letter dated February 20, 2026, Gujarat Toolroom asked Naksh Steel not to initiate insolvency proceedings and expressed its willingness to pay the outstanding amount.

Opposing the initiation of the corporate insolvency resolution process (CIRP), Gujarat Toolroom said it remained a going concern and that temporary liquidity constraints arising from outstanding receivables from its own suppliers and business counterparties had affected its ability to make payments.

The company said it was trying to realise its receivables and discharge its liabilities. It sought an opportunity to reach a mutually acceptable payment arrangement with Naksh Steel.

Gujarat Toolroom also placed its latest financial statements and statement of creditors as of March 31, 2026, on record. It said it was complying with applicable SEBI, stock exchange and statutory filing requirements.

The tribunal noted that the debt was due and acknowledged, the invoices had been raised and the amount remained unpaid. It also found that there were no pre-existing disputes between the parties before the demand notice was issued.

The NCLT allowed the petition and ordered the initiation of CIRP against Gujarat Toolroom. It imposed a moratorium under Section 14 of the IBC and appointed Iqbalsingh Gandhi as the interim resolution professional (IRP).

The tribunal also directed Naksh Steel to pay ₹2 lakh to the IRP within seven days towards the initial costs of the insolvency process, including issuing a public notice and inviting claims, until the committee of creditors decides his fees and expenses.