NCLAT upholds CIRP against Simbhaoli Sugars, dismisses appeals

The National Company Law Appellate Tribunal (NCLAT) has upheld the Corporate Insolvency Resolution Process (CIRP) against Simbhaoli Sugars Limited, dismissing the appeal filed by promoter Ms. Gursimran Kaur Mann and disposing of the appeal filed by farmer Mr. Surender Pal Singh Mangat on July 13, 2026. Consequently, all interim orders stand vacated, and pending interlocutory applications are closed. The tribunal confirmed that the financial creditor, Oriental Bank of Commerce (now Punjab National Bank), had initiated recovery actions, including recalling the loan on November 1, 2017, prior to the Reserve Bank of India's February 12, 2018 circular, thereby validating the admission of the Corporate Debtor into CIRP.

The tribunal rejected arguments that the proceedings were initiated solely due to the RBI circular, which was struck down in the Dharani Sugars case. It noted that the debt and default were conclusively established, and no approved One Time Settlement (OTS) proposal was pending before the Joint Lenders Forum. The NCLAT found that the insolvency proceeding was independent of the RBI circular as the loan recall and legal notices preceded the circular's issuance.

Financial and Operational Context

Simbhaoli Sugars Limited had previously reported its audited consolidated financial results for the quarter and year ended March 31, 2026, with the statutory auditor issuing an adverse opinion. B.K. Kapur & Company stated that the financial statements did not give a true and fair view due to material uncertainties and non-compliance with Indian Accounting Standards (Ind AS). The company incurred losses resulting in negative net worth and negative working capital, with defaults in payments to lenders and farmers casting significant doubt on its ability to continue as a going concern.

The adverse opinion was driven by the non-provision of interest expenses on bank borrowings amounting to ₹8,997.64 Lakhs for the quarter and ₹34,990.72 Lakhs for the year. The cumulative unprovided interest liability aggregates to ₹2,10,020.35 Lakhs as of March 31, 2026. Additionally, the company failed to assess impairment losses on investments in and receivables from its subsidiaries, Simbhaoli Power Private Limited (SPPL) and Integrated Casetech Consultants Private Limited (ICCPL), aggregating to ₹22,862.61 Lakhs and ₹655.72 Lakhs respectively.

Qualification	Amount (₹ in Lakhs)	Impact
Interest on bank borrowings (Quarter)	8,997.64	Understatement of loss and liabilities
Interest on bank borrowings (Year)	34,990.72	Understatement of loss and liabilities
Interest on unsecured related party loan (Year)	43.81	Understatement of loss and liabilities
Interest on delayed cane dues	12,163.25	Understatement of loss and liabilities
MSMED Act interest liability	51.26	Understatement of loss and liabilities

Regulatory and Stakeholder Directions

Addressing concerns regarding sugarcane farmers, the NCLAT directed the Resolution Professional to consider their claims in accordance with the law. The tribunal referenced the IRP's affidavit confirming adherence to tagging orders issued by the District Magistrate for the disbursement of cane prices. Operational headwinds persist, including directions from the Central Pollution Control Board to stop manufacturing at distillery units and adverse cane area reservation orders affecting raw material supply.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
-0.45%	-1.19%	-2.34%	-27.50%	-57.57%	-82.17%

Simbhaoli sugars Limited has officially communicated to stock exchanges that it does not qualify as a Large Corporate under the Securities and Exchange Board of India (SEBI) debt securities framework. The disclosure was made on April 29, 2026, in compliance with SEBI operational circulars pertaining to fund raising through debt securities issuance by large entities.

Regulatory Compliance Disclosure

The company's disclosure references multiple SEBI circulars, including SEBI/HO/DDHS/P/CIR/2021/613 dated August 10, 2021, a subsequent circular dated April 13, 2022, and SEBI Circular No. SEBI/HO/DDHS/DDHS-RACPOD1/P/CIR/2023/172 dated October 19, 2023. These circulars establish the framework for fund raising by issuance of debt securities by large entities.

Financial Position Details

The company provided specific details regarding its financial standing and compliance status:

Parameter	Details
Company Name	Simbhaoli Sugars Limited
CIN	L15122UP2011PLC044210
Outstanding Long-term Borrowing (March 31, 2026)	Nil
Credit Rating Status	Not Applicable
Stock Exchange Fine Applicability	Not Applicable

Corporate Status Confirmation

Simbhaoli Sugars Limited explicitly confirmed that it is "NOT A LARGE CORPORATE" as per the framework provided in the aforementioned SEBI circulars. This classification is significant as it determines the company's obligations under the debt securities framework and related compliance requirements.

Current Corporate Proceedings

The company disclosed that it is currently undergoing Corporate Insolvency Resolution Process (CIRP) pursuant to the Insolvency and Bankruptcy Code, 2016, effective from July 11, 2024. The management affairs and assets are being handled by Interim Resolution Professional Mr. Anurag Goel, who was appointed by the National Company Law Tribunal, Allahabad Bench.

Notably, the CIRP process is currently under stay following an order dated July 24, 2024, by the National Company Law Appellate Tribunal, New Delhi. This stay order temporarily suspends the insolvency proceedings.

Document Authentication

The disclosure was jointly signed by Company Secretary & Compliance Officer Jagriti Sharma and Chief Financial Officer Dayal Chand Popli, both providing digital signatures on April 29, 2026. The company maintains its registered office at Simbhaoli, District Hapur, Uttar Pradesh, and holds certifications including FSSC 22000: version 6.1, ISO 9001:2015, and ISO 14001:2015.