Dharani Sugars and Chemicals Limited received a legal notice from NARCL on 7th February 2026 for non-compliance of Master Restructuring Agreement dated 24th May 2024. The notice identifies multiple defaults including failure to allot 20% equity shares to NARCL, non-creation of INR 15 crores DSRA, and financial default of INR 10.48 crores due on 31st December 2025. NARCL has granted one month to cure all defaults, failing which recovery proceedings will be initiated before the Debt Recovery Tribunal.

Dharani Sugars and Chemicals Limited Receives Legal Notice from NARCL for Master Restructuring Agreement Non-Compliance

Dharani Sugars Receives Legal Notice from NARCL Over Multiple Non-Compliances

Dharani Sugars and Chemicals Limited has received a legal notice from National Asset Reconstruction Company Limited (NARCL) regarding multiple non-compliances under the Master Restructuring Agreement (MRA) dated 24th May 2024.

Legal Notice Details

The legal notice dated 7th February 2026 was issued by NARCL through its authorized representative India Debt Resolution Company Limited (IDRCL).
The notice pertains to the Sanction Letter dated 22nd March 2024 and the Master Restructuring Agreement executed among NARCL, Dharani Sugars and Chemicals Limited, and guarantors Dr. Palani G. Periyasamy and Smt. Visalakshi Periyasamy.

Multiple Events of Default Identified

NARCL has identified several material non-compliances and events of default under the MRA through previous notices dated 24th November 2025 and 19th December 2025.

Equity Allotment Failure: Non-allotment of fully paid-up equity shares aggregating to 20% of total paid-up equity share capital in favor of NARCL as required under Clause 4(c) of the MRA
DSRA Non-Creation: Failure to create, fund, and maintain a Debt Service Reserve Account of INR 15 crores within 18 months from the Cut-off Date
Monitoring Committee: Failure to constitute and operationalize the Monitoring Committee as required under Clause 11(i) of the MRA
Farmers' Dues Corpus: Non-arrangement of requisite additional corpus for payment of farmers' dues
Unauthorized Debt: Incurrence of additional indebtedness of approximately INR 25 crores without prior written consent from NARCL

Financial Default and Outstanding Amount

In addition to the operational defaults, NARCL has highlighted a separate financial default.

Default Type: Financial Default
Amount: INR 10.48 crores
Due Date: 31st December 2025
Status: Outstanding

Final Opportunity and Consequences

NARCL has granted Dharani Sugars a final period of one month from receipt of the notice to cure all subsisting events of default and achieve compliance with the MRA.

The company has been put on notice that failure to remedy the defaults within the stipulated period will result in:

Initiation of proceedings before the Debt Recovery Tribunal for issuance of Recovery Certificate
Reinstatement of entire outstanding dues in accordance with MRA provisions
Exercise of all contractual and statutory rights available to NARCL