The National Company Law Tribunal (NCLT) Mumbai Bench-II has officially admitted the voluntary insolvency petition filed by West Gujarat Expressway Limited (WGEL), a special purpose vehicle previously engaged in road infrastructure projects. Presided over by Judicial Member Ashish Kalia and Technical Member Banwari Lal Meena, the tribunal sanctioned the initiation of the Corporate Insolvency Resolution Process (CIRP) under Section 10 of the Insolvency and Bankruptcy Code (IBC), 2016 . The decision follows the entity's substantial debt default, which significantly exceeds the statutory threshold required for initiating insolvency proceedings, marking a significant step in the winding down of the company's financial affairs.

The tribunal's order confirmed that as of January 14, 2026 , the Corporate Debtor faced a total debt in default of approximately ₹227.20 crore. This figure far surpasses the minimum requirement of ₹1 crore stipulated under Section 4(1) of the Code . The company, which had been incorporated in 2005 as a joint venture between Infrastructure Leasing & Financial Services Limited (IL&FS) and IL&FS Transportation Networks Limited (ITNL), cited its deteriorating financial position and the cessation of its primary business operations as the foundation for seeking corporate insolvency.

Legal Justification for Admission

In addressing the threshold requirements, the NCLT scrutinized the company’s audited financial statements for the fiscal year 2024–25 . These records revealed total assets valued at ₹85.34 crore against total liabilities of ₹319.81 crore, resulting in a negative net worth of ₹234.46 crore. A critical legal hurdle addressed by the bench concerned the limitation period for the debt. The tribunal held that the acknowledgment of debt in the company’s audited financial statements serves as a valid extension of the limitation period .

The tribunal observed: “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.”

Furthermore, the NCLT rejected contentions that an ongoing investigation by the Serious Fraud Investigation Office (SFIO) should impede the insolvency process. The Bench clarified that while the investigation proceeds, it does not bar the admission of a Section 10 petition. The appointed Interim Resolution Professional (IRP) has been tasked with noting the investigation's existence and ensuring that all subsequent actions comply with the relevant sections of the IBC, particularly those regarding the examination of potential avoidance transactions .

Operational Background and Project Termination

West Gujarat Expressway was established to develop and maintain the Jetpur–Gondal–Rajkot section of National Highway 8B under a 20-year Build-Operate-Transfer (BOT) concession agreement with the National Highways Authority of India (NHAI). Although the project commenced toll operations in 2008, the entity eventually faced severe financial strain following its classification as a “Red Entity” by the National Company Law Appellate Tribunal (NCLAT) in December 2022 .

The project itself was halted following a termination notice issued by the NHAI in December 2021 , and formal control of the highway was handed over to the authority in April 2022 . Following the cessation of its primary business activity, the company moved through a series of corporate and regulatory approvals, including obtaining the consent of the NCLAT-supervised resolution committee, to arrive at the current stage of voluntary insolvency. The tribunal noted that all necessary internal and group-level authorizations for filing the insolvency plea had been duly secured.

Appointment of IRP and Moratorium Directions

With the formal admission of the petition, the tribunal has placed the company under a statutory moratorium , as prescribed by Section 14 of the IBC . This move prohibits the institution or continuation of suits against the Corporate Debtor , the transfer or encumbrance of assets, and any actions intended to foreclose or recover security interests. These protective measures are intended to maintain the status quo and preserve the assets of the company while the insolvency process unfolds.

The Bench has appointed Mr. Parshva Manoj Shah as the IRP to oversee the management of the Corporate Debtor . The IRP is now vested with the powers of the board of directors and is responsible for managing the company’s affairs, inviting claims from creditors, and conducting the CIRP under the supervision of the Committee of Creditors (CoC). The tribunal has mandated that the officers and managers of the company cooperate fully with the IRP, providing all necessary documents within a week to ensure a seamless transition of control.

Regarding the petitioner's request for directions on the distribution of future recoveries, the tribunal noted that such a request was premature. It stated that the statutory scheme of the IBC, which includes the waterfall mechanism under Section 53, must be followed. The Bench emphasized that the IRP must act in accordance with the Code and report all progress, including any future recoveries, directly to the tribunal.

The order concludes by directing the registry to notify the Registrar of Companies and the Insolvency and Bankruptcy Board of India . The IRP is expected to initiate the public announcement of the CIRP immediately, inviting stakeholders to submit their claims, thereby marking the commencement of the formal resolution timeline.