NCLAT Dismisses Promoter Appeal in Simbhaoli Sugars CIRP; Farmer Dispute Resolved

NCLAT Dismisses Promoter Appeal in Simbhaoli Sugars CIRP; Farmer Dispute Resolved​

The National Company Law Appellate Tribunal (NCLAT) has delivered its judgment concerning the Corporate Insolvency Resolution Process (CIRP) of Simbhaoli Sugars Limited, vacating all interim orders related to the process. The ruling addresses appeals filed by various stakeholders regarding the ongoing insolvency proceedings.

The NCLAT pronounced its judgment on 13 July 2026 in cases pertaining to the CIRP of Simbhaoli Sugars Ltd. The Tribunal dismissed the appeal filed by Ms. Gursimran Kaur Mann, one of the company's promoters. Furthermore, the appeal filed by Mr. Surender Pal Singh Mangat (Farmer) was disposed of with certain directions from the court.

The judgment confirms that all interim orders in the matter stand vacated, and any pending interlocutory applications are closed. There was no order as to costs issued by the Tribunal.

Financial Position and Creditor Status​

Simbhaoli Sugars Ltd has been undergoing the Corporate Insolvency Resolution Process since 11 July 2024, managed by Interim Resolution Professional (IRP) Mr. Anurag Goel, following the initiation of CIRP.

The legal proceedings examined details regarding outstanding liabilities and valuation within the company's operational framework:

NCLAT Findings on Financial Creditor Action​

A key finding established by the NCLAT related to the petition filed by Oriental Bank of Commerce (OBC)/Punjab National Bank, a financial creditor. The Tribunal determined that the insolvency proceeding initiated by the bank was independent of the RBI Circular dated 12 February 2018.

The judgment noted that the loan recall and legal notice from the bank were issued prior to the circular, with the company acknowledging its liability and submitting a restructuring proposal which was later rejected by the bank.

Legal experts at the Tribunal emphasized that:

• The Financial Creditor's action commenced in adherence to pre-CIRP recovery actions, including filing for recovery proceedings before the Debt Recovery Tribunal on 23 November 2017, and issuing a legal notice dated 29 October 2017.
• A significant argument raised by the Corporate Debtor—that the petition was dependent on the RBI circular which had been declared ultra vires in previous judicial proceedings—was rejected. The NCLAT concluded that the Section 7 application was initiated long before the reference date mentioned in the said RBI Circular, rendering the corporate debtor's contention without merit.

The NCLAT confirmed that once debt and default were established, admission into CIRP must follow, thereby finding no infirmity in the initial order of the National Company Law Tribunal regarding the admission of Simbhaoli Sugars Ltd into the Corporate Insolvency Resolution Process.

SIMBHALS Stock Price Movement​

Shares of Simbhaoli Sugars Limited are shedding value at 1:45 PM today, having slipped by 2.37% in live trading to trade at ₹7.00. So far, the stock has experienced a daily range between ₹7.00 and ₹7.20 amid 4,332 shares traded during this session.