Naksh Steel Limited Vs Gujarat Toolroom Limited (NCLT Ahmedabad)
Summary: The National Company Law Tribunal, Ahmedabad Bench, Court-II, admitted an application filed by Naksh Steel Limited under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against Gujarat Toolroom Limited for default in payment of operational debt amounting to ₹26,20,56,668. The dispute arose from a Supply Agreement dated 16 December 2024, under which the operational creditor supplied steel and other building materials during 16 January 2025 to 20 January 2025 for shipment to Reliance Industries Limited in Gujarat. Invoices were raised for the supplies, but the corporate debtor failed to discharge the outstanding liability. The date of default was reckoned as 20 January 2025. The operational creditor issued a statutory demand notice dated 20 January 2026 under Section 8 of the Code in Forms 3 and 4, but the payment remained outstanding.
The corporate debtor did not dispute the underlying business relationship, the supply of goods or the invoices raised against it. It explained that payment could not be made because of temporary liquidity constraints arising from outstanding receivables from its suppliers and business counterparties. In its letter dated 20 February 2026, the corporate debtor expressed willingness to discharge the amount and requested that insolvency proceedings not be initiated. It submitted that it continued to operate as a going concern, complied with applicable statutory and stock exchange filing requirements, and was seeking to realise its receivables. It consequently requested an opportunity to negotiate a mutually acceptable payment arrangement instead of commencement of CIRP.
