Exclusive Capital Ltd (ECL), one of the committee of creditors (CoC) members has issued a legal notice to Independent Sugar Corporation Ltd (INSCO) alleging “wilful disobedience” of the Supreme Court’s order in the resolution process of Hindusthan National Glass & Industries Ltd (HNGIL), warning of contempt proceedings if INSCO fails to rectify its revised bid within 48 hours.
The apex court, in its January 29 judgment, had directed the Committee of Creditors (CoC) to reconsider resolution plans that had requisite Competition Commission of India (CCI) approval as of October 28, 2022. It had also taken on record INSCO’s unconditional undertaking to match AGI Greenpac’s commercial bid, including an upfront ₹356 crore cash component, ₹50 crore for operational creditors and workers, and equity to the CoC.
ECL, represented by senior counsel Pranjit Bhattacharya, claims INSCO’s revised plan dated June 8 fails to meet these requirements. “The plan does not match AGI’s offer and introduces staggered or deferred payments, violating both the letter and spirit of the Supreme Court’s direction,” the notice states.
It further alleges that the CCI approval cited by INSCO—obtained via the Green Channel route—is invalid, as other parties to the combination such as HNGIL and acquiring creditors were not co-applicants, rendering the filing procedurally flawed under Regulation 5A of the 2011 Combination Regulations.
“The conduct amounts to a flagrant breach of undertakings made before the Court and a serious erosion of the integrity of the insolvency process,” ECL said in the notice, also copied to top CoC members including SBI, LIC, Edelweiss ARC, and DBS Bank.
Legal experts said if the allegations hold, INSCO could face contempt proceedings under Section 12 of the Contempt of Courts Act, 1971, which provides for imprisonment and penalties for disobeying judicial orders.
INSCO’s plan outlines payment of the entire ₹2,200 crore cash component within 30 days of NCLT approval, along with infusion of working capital and equity issuance to CoC members within 90 days. A non-binding term sheet has also been submitted with Cerberus Capital Management for bridge financing support. The proposal combines promoter equity, internal accruals, and indicative external funding.
However, earlier this month in a missive to RP and CoC members Exclusive Capital flagged serious concerns over the viability and transparency of the proposal, sources reveal. The lender pointed to the lack of a binding financial commitment from INSCO for the ₹2,213 crore it is obligated to bring in. The Cerberus term sheet, dated May 2, 2025, is described in the document as “illustrative” and “not legally binding,” and no sanction letters or definitive financing agreements have been submitted. The remaining ₹663 crore infusion also lacks supporting documentation or a clear timeline.
Questions were also been raised in the letter about INSCO’s financial capacity, with audited financials showing a fall in EBITDA from ₹31.42 crore in 2019 to ₹6.29 crore in 2021, and profits declining from ₹31.05 crore to ₹6.19 crore during the same period. This may cast doubt whether the company can realistically implement a ₹2,752 crore revival plan.
At the heart of the matter is a Supreme Court ruling that rejected a CoC approved plan given by AGI Greenpac because it did not adhere to the terms of the request for proposal. AGI Greenpac, which gave a higher offer than rival bidder INSCO, failed to get requisite approval from the Competition Commissioner of India (CCI) before the plan was approved by the CoC. It received a conditional approval from the CCI after lenders had voted on the plan.
While rejecting a review petition filed by AGI Greenpac, the Supreme Court directed INSCO to match the offer given by AGI Greenpac and directed the resolution professional to complete the resolution process involving the approval of the INSCO resolution plan by the CoC, by July 2025.
