Geetanjali Sugar Consortium Wins Bid: NCLT Approves Rs. 185 Crore Revival Plan for Lokshakti Sugar [Read Order]
With the approval, the moratorium on Lokshakti Sugar ends, allowing the consortium to implement the revival plan under the monitoring committee’s supervision. The resolution professional has been directed to submit records to the Insolvency and Bankruptcy Board of India (IBBI) and notify stakeholders.
Sugar - NCLT - Taxscan
Sugar - NCLT - Taxscan
The National Company Law Tribunal (NCLT), Mumbai Bench, has approved a Rs. 185 crore resolution plan submitted by Geetanjali Sugar Private Limited in consortium with M/s G V Alurkar for the revival of debt-ridden Lokshakti Sugar & Allied Industries Ltd. The order paves the way for the takeover of the Solapur-based sugar manufacturer, which had been undergoing Corporate Insolvency Resolution Process (CIRP) since January 2023.
The consortium emerged as the highest bidder in an open bidding process held in October 2023, offering Rs. 185 crore against Lokshakti Sugar’s admitted financial debt of Rs. 209.26 crore. The Committee of Creditors (CoC), comprising secured lenders, unanimously approved the plan with 100% voting share. The resolution professional, Charudutt Marathe, had filed the application seeking NCLT’s approval after the CoC reaffirmed its decision following a brief remand for fresh consideration due to a change in the consortium’s shareholding.
Want a deeper insight into the Income Tax Bill, 2025? Click here
Lokshakti Sugar, which operates a 3,500 TCD sugar plant and a 14 MW cogeneration facility in Maharashtra, had faced financial collapse, leading to insolvency proceedings initiated by Indian Renewable Energy Development Agency Limited. The resolution process saw intense competition, with six initial bids and three final contenders, including Twenty-One Sugars Limited and Ampra Distilleries. The open bidding process, held on October 17, 2023, saw Geetanjali Sugar consortium outbid rivals with a final offer of Rs. 185 crore.
The approved plan outlines a structured payout, including full settlement of Rs. 2.85 lakh to operational creditors (GST dues to Maharashtra government) and 88.4% repayment to secured financial creditors. An additional Rs. 21 crore will be infused as working capital over two years. The consortium also proposed capital restructuring, cancelling existing shares and issuing fresh equity to take 100% control of Lokshakti Sugar. A monitoring committee, including CoC representatives and the resolution professional, will oversee implementation.
The NCLT bench, comprising Member (Technical) Anil Raj Chellan and Member (Judicial) K.R. Saji Kumar, citing the Supreme Court in K. Sashidhar v. Indian Overseas Bank and Ors. (2019) held that once the Committee of Creditors (CoC) approves a resolution plan by the requisite percentage of voting share, the Resolution Professional is mandated under Section 30(6) of the Code to submit the plan to the Adjudicating Authority, which is limited to scrutinizing the plan only as per the conditions laid down in Section 30(2), without questioning the commercial wisdom of the CoC.
How to Audit Public Charitable Trusts under the Income Tax Act Click Here
Further, in the Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta and Ors. (2020), the Supreme Court reinforced that the Adjudicating Authority lacks the power to modify a resolution plan approved by the CoC in their commercial wisdom, restricting judicial review strictly within the ambit of Section 30(2) and Section 32 read with Section 61(3), as clarified in K. Sashidhar.
The tribunal noted the plan complies with Section 30(2) of the Insolvency and Bankruptcy Code (IBC), including provisions for CIRP costs, creditor payments, and management continuity. It also referenced the Supreme Court’s 2021 “clean slate” principle, extinguishing all pre-CIRP claims not part of the resolution plan.
The order grants standard IBC protections, including immunity for the new management from past liabilities under Section 32A, while clarifying that statutory authorities may independently assess post-resolution compliance. Guarantors remain liable to lenders, though barred from recovering from the revived company. The tribunal declined blanket waivers for stamp duty or regulatory fees but recommended authorities facilitate the revival.
Clear all Your Doubts on RCM, TCS, GTA, OIDAR, SEZ, ISD Etc... Click Here
With the approval, the moratorium on Lokshakti Sugar ends, allowing the consortium to implement the revival plan under the monitoring committee’s supervision. The resolution professional has been directed to submit records to the Insolvency and Bankruptcy Board of India (IBBI) and notify stakeholders. The NCLT’s decision marks a critical step in salvaging the distressed sugar unit, which now awaits operational revival under new ownership.
In Conclusion, Geetanjali Sugar consortium can now take over and restart Lokshakti Sugar's manufacturing operations.
Support our journalism by subscribing to Taxscanpremium. Follow us on Telegram for quick updates
