NCLAT Allows Withdrawal Of Insolvency Appeal Against Oswal Overseas, Settlement Clears ₹2.80 Crore Dues To LH Sugar Factories
NCLAT has allowed the withdrawal of the insolvency appeal against Oswal Overseas after the company settled its dues with LH Sugar Factories by paying Rs 2.80 crore. The tribunal permitted CoC formation but paused further insolvency proceedings until the NCLT decides the withdrawal application.
Tribunal permits IRP to form Committee of Creditors but bars further CIRP steps until NCLT decides the withdrawal application. | Image Source: Wikipedia (Representative)
New Delhi: The National Company Law Appellate Tribunal (NCLAT) has allowed the withdrawal of an appeal related to the insolvency proceedings against Oswal Overseas Ltd after the company reached a settlement with its financial creditor, LH Sugar Factories.
Settlement Ends Dispute
A joint application was filed before the NCLAT by Oswal Overseas and LH Sugar Factories, informing the tribunal that both sides had settled the matter amicably.
As part of the settlement, Oswal Overseas handed over a demand draft of Rs 2.80 crore to the financial creditor. Counsel for LH Sugar Factories told the tribunal that the company's financial dues had been cleared in full and final settlement.
Tribunal Modifies Earlier Order
The NCLAT bench of Justice Mohammad Faiz Alam Khan and Naresh Salecha noted that the parties would now move an application under Section 12A of the Insolvency and Bankruptcy Code (IBC) before the National Company Law Tribunal (NCLT) to formally withdraw the insolvency process.
The tribunal also modified its earlier interim order. It allowed the Interim Resolution Professional (IRP) to verify claims and form the Committee of Creditors (CoC), as required under the amended IBC rules.
However, the IRP has been directed not to take any further steps in the Corporate Insolvency Resolution Process (CIRP), including inviting Expressions of Interest (EOIs), until the NCLT decides the withdrawal application.
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Background of the Case
The NCLAT also dismissed the appeal filed by Paramjeet Singh, the suspended Managing Director of Oswal Overseas, who had challenged the insolvency proceedings.
Earlier, on June 8, 2026, the NCLT admitted LH Sugar Factories' plea and started the CIRP against Oswal Overseas.
According to court records, Oswal Overseas had borrowed Rs 2.25 crore in August 2024 as a short-term loan, citing financial difficulties and delayed payments to sugarcane farmers. The company failed to repay the amount by the agreed deadline.
LH Sugar Factories later approached the NCLT, claiming Rs 2.44 crore, including the principal amount and default interest.
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