Key Event Details

  • The Company executed Consent Terms with HDFC Bank Limited ("HDFC Bank") and Bank of Bahrain and Kuwait BSC ("BBK") on 22nd October, 2026 for negotiated settlement of various legal cases.
  • The cases were pending before Debt Recovery Appellate Tribunal - Mumbai (DRAT), Debt Recovery Tribunal - Mumbai (DRT), and the Commercial Court at the City Civil Court, Ahmedabad.
  • The parties will file the Consent Terms with DRAT at the next hearing of the matter for withdrawing the cases.

Background of Dispute

  • The litigation relates to a matter from 2003 involving a cheque of Rs. 7.50 Crores drawn on HDFC Bank by the Company in favor of BBK.
  • The cheque was not to be credited by HDFC Bank to BBK but was erroneously credited by HDFC Bank to BBK, which was disputed by the Company.

Settlement Terms

  • The Company will pay Rs. 18.00 Crores to BBK for settlement of the matter.
  • The Company will receive approximately Rs. 4.06 Crores from HDFC Bank, being amount belonging to the Company and held as Fixed Deposit by HDFC Bank pursuant to court order in the case pending before the Commercial Court.
  • Net outgo on account of the settlement would be approximately Rs. 13.94 Crores.
  • The Company will withdraw the civil suit pending before the Commercial Court after DRAT passes order allowing withdrawal of cases.
  • HDFC Bank will release the amount upon Order of withdrawal is passed by the Commercial Court.

Financial Implications

  • The Company has been carrying the disputed liability of Rs. 7.50 Crores in its books under Suspense Account since 2003.
  • The amount of difference of Rs. 10.50 Crores (between disputed liability of Rs. 7.50 Crores and settlement payment of Rs. 18.00 Crores) will be accounted for as interest expense.
  • The amount of Fixed Deposits with HDFC Bank is carried at Rs. 3.39 Crores in the Company's books as on date.
  • The difference of Rs. 0.67 Crores (between book value of Rs. 3.39 Crores and actual receipt of Rs. 4.06 Crores) will be accounted for as interest income.
  • The overall impact of the settlement on the profitability of the Company would be approximately Rs. 9.83 Crores (net negative impact).

Procedural Status

  • The Consent Terms were executed on 22nd October, 2026.
  • The parties will file the Consent Terms with DRAT at the next hearing for withdrawing the cases.
  • The Company will pay the settlement amount during the hearing.