NCLT Ahmedabad Sanctions Suzlon Energy Scheme To Set Off ₹18,418 Crore Losses By Reorganising Reserves

The Ahmedabad bench of the National Company Law Tribunal has approved Suzlon Energy Limited's plan to set off accumulated losses of about Rs.18,418 crore by reorganising its reserves.

The order was passed on April 29, 2026 by Judicial Member Chitra Hankare and Technical Member Dr V.G. Venkata Chalapathy.

Suzlon Energy Limited had proposed a scheme of arrangement to reorganise and reclassify its reserves to offset negative retained earnings and improve its financial position. The appointed date for the scheme was fixed as September 30, 2024.

The company's board approved the scheme on October 28, 2024.

Pursuant to earlier directions of the tribunal, meetings of equity shareholders and unsecured creditors were held on December 12, 2025. The scheme was approved by 96.6019% of shareholders in number and 99.9966% in value, and by 97.1154% of unsecured creditors in number and 98.1638% in value.

Meetings of secured creditors were dispensed with after they submitted consent affidavits.

Notices were issued to statutory authorities including the Regional Director, Registrar of Companies and the Income Tax Department.

The Regional Director raised concerns over the selection of the appointed date, utilisation of capital reserves to offset losses, transfer of general reserves to retained earnings and compliance with accounting standards.

In response, Suzlon said the appointed date was selected in line with the tribunal's directions and that the reserves proposed to be set off were real and backed by auditor certification.

It also relied on precedents including the tribunal's rulings in Mafatlal Industries and Prime Securities.

The Registrar of Companies reported that there were no pending complaints, inspections or investigations against the company. It emphasised that Suzlon must comply with SEBI regulations, preserve records and continue to meet all statutory obligations.

Suzlon undertook to comply with all such requirements.

The Income Tax Department informed the tribunal about certain outstanding demands and pending reassessment proceedings.

Suzlon responded that penalties had been quashed by the Gujarat High Court and that fresh proceedings had dropped the penalties. It also undertook to comply with any tax liabilities as finally determined.

The tribunal noted that the scheme involved using available reserves to set off accumulated losses arising from negative retained earnings.

“This helps the petitioner to reflect a better financial health of the company as it reorganizes its reserves and off set the negative balance in retained earnings. The proposal to set off by using the Capital reserve, Capital Contribution, Capital redemption reserve, Securities Premium and Balance if any in General Reserve, which as per submissions does not alter the share holding pattern of the company."

It further observed that the scheme did not result in any change in the company's shareholding pattern.

“The Shareholding Pattern of the Applicant Company shall not undergo any change due to the proposed Scheme of Arrangement.”

The tribunal also recorded that the accounting treatment under the scheme was in conformity with applicable accounting standards under the Companies Act.

It noted that the shareholders and creditors had approved the scheme with the requisite majority and that the company had filed affidavits responding to the observations of statutory authorities.

The tribunal observed that there was no impediment in approving the scheme and allowed the petition, subject to compliance with applicable laws and regulatory requirements.