NCLT Admits IOB's ₹117.74 Cr Insolvency Petition Against Mhow Toll Roads

Authority: National Company Law Tribunal, Principal Bench, New Delhi

Order Date: 09.07.2026

Case Overview

The National Company Law Tribunal (NCLT) Principal Bench, New Delhi, heard a petition filed by Indian Overseas Bank (Financial Creditor) under Section 7 of the Insolvency and Bankruptcy Code, 2016 against Mhow Ghatabill Toll Roads Pvt. Ltd. (Corporate Debtor). The petition sought initiation of Corporate Insolvency Resolution Process (CIRP), declaration of moratorium, and appointment of an Interim Resolution Professional.

The financial debt originated from a term loan of ₹217.00 crores sanctioned by IL&FS Financial Services Limited to the Corporate Debtor on 02.03.2012 for four-laning of the Mhow-Ghatabillod section in Madhya Pradesh. Through a novation notice dated 01.10.2012, a portion of this debt amounting to ₹70 crores was assigned to Indian Overseas Bank. The Corporate Debtor failed to adhere to repayment obligations, resulting in the loan account being classified as a Non-Performing Asset (NPA) on 29.06.2019. The Financial Creditor issued a demand notice on 19.08.2019 followed by a loan recall notice on 30.06.2020.

The Corporate Debtor acknowledged the outstanding dues in its audited financial statements for years 2021-22, 2022-23, and 2023-24, showing an outstanding amount of ₹66,08,64,090. The total claimed amount including interest at 11% p.a. and penal interest at 2% p.a. as on 20.11.2025 stood at ₹1,17,74,94,044.88.

The Tribunal examined whether the application met the requirements under Section 7 of the IBC, particularly the existence of financial debt and occurrence of default. The Bench referenced the Supreme Court's judgment in Innoventive Industries Ltd. v. ICICI Bank (2018) which established that the Adjudicating Authority's role is limited to verifying the existence of debt and default.

On the issue of limitation (with default date of 29.06.2019 and application filed on 01.04.2026), the Tribunal relied on the Corporate Debtor's acknowledgments in audited financial statements as valid acknowledgments under Section 18 of the Limitation Act, 1963, following the Supreme Court's ruling in Asset Reconstruction Company (India) Limited v. Bishal Jaiswal & Anr. (2021).

The Corporate Debtor failed to appear despite service of notice through Registered Post Acknowledgement Due (returned with remark "Addressee Left without Instruction") and email on 23.04.2026, and subsequent opportunities granted on 09.06.2026 and 11.06.2026.

Final Outcome

The NCLT admitted the petition (CP (IB) - 159(ND)/2026) and ordered commencement of Corporate Insolvency Resolution Process against Mhow Ghatabill Toll Roads Pvt. Ltd. The moratorium under Section 14(1) of IBC was declared effective immediately and shall continue until completion of CIRP or approval of resolution plan or liquidation order.

Mavent Restructuring Services LLP (Registration No. IBBI/IPE-0154/IPA-3/2023-24/50058) was appointed as Interim Resolution Professional. The IRP was directed to make public announcement within three days and take charge of the Corporate Debtor's assets and documents. The Financial Creditor was directed to deposit ₹5,00,000 with the IRP for process expenses. The IRP must submit periodic progress reports to the Tribunal, and the Registry was directed to communicate the order to all concerned parties including Registrar of Companies, IBBI, and various government departments.

Topics: Corporate Insolvency, Infrastructure Debt, NCLT Proceedings