A2Z Infra says Rs 72.35 crore cogeneration awards remain unresolved

A2Z Infra Engineering Limited said Rs 72.35 crore of 2021 arbitral awards plus interest over three cogeneration plants remained under challenge as of September 30, 2026, while its subsidiary’s Chhattisgarh contract recovery claim entered arbitration on August 21, 2026. A2Z Infra’s auditors said the final outcomes of both matters were unascertainable.

What is the Rs 72.35 crore cogeneration dispute?

The Rs 72.35 crore dispute concerns awards passed against A2Z Infra in 2021 in disputes with certain sugar mills over three cogeneration power plants. The awards, issued by the Additional Registrar, also carry interest, although the filing does not quantify that interest. A2Z Infra said the contractual disputes include claims concerning guaranteed returns, boiler repair and maintenance, and electricity bought to operate the plants.

A2Z Infra has challenged the awards under Section 34 of the Arbitration and Conciliation Act, 1996 before the District & Sessions Court, Chandigarh. Its stated ground is that the Registrar was not an independent arbitrator within the meaning of Section 11 of the Act. The Section 34 challenge was still pending when the board approved the September 30, 2026 standalone results on November 13, 2026.

The table shows that revenue from operations declined by Rs 10.35 crore year on year, while total income fell by Rs 3.43 crore. The smaller decline in total income reflected other income of Rs 7.51 crore in the 2026 half year, compared with Rs 0.59 crore in the corresponding period a year earlier.

Why were the three power plants fully impaired?

A2Z Infra fully impaired the carrying value of the three cogeneration plants in earlier periods because the disputes created uncertainty over asset recoverability and the company’s personnel had restricted access to the respective plant premises. The plants had been established on a Build, Own, Operate and Transfer, or BOOT, basis. The filing does not state the amount of the impairment.

A2Z Infra said it had taken legal action over restricted access, while the High Court of Punjab and Haryana appointed a sole arbitrator on December 5, 2025 to resolve the disputes. Arbitration is now in progress before that arbitrator, alongside the pending Section 34 court challenge. The auditors’ September 30, 2026 review said the eventual result of these related proceedings cannot presently be determined.

The accounting treatment does not settle the legal claims: it reflects management’s earlier assessment of the plants’ carrying value amid the access restrictions and recovery uncertainty. The Rs 72.35 crore awards plus interest remain a separate disputed exposure in the legal process. The filing does not disclose an expected completion date for either the Chandigarh court matter or the arbitration.

What is happening in the Chhattisgarh contract case?

The Chhattisgarh case arose from an Economic Offences Wing and Anti-Corruption Bureau investigation relating to certain contracts executed with Chhattisgarh State Marketing Corporation Limited. A2Z Infra’s subsidiary, A2Z Infraservices Ltd, invoked the arbitration clause in its contract to seek recovery of dues from the state marketing corporation. The filing does not give the value of the subsidiary’s claim.

The High Court of Chhattisgarh appointed a sole arbitrator on August 21, 2026 to adjudicate the subsidiary’s claim. A2Z Infra’s management said it believes the company has reasonable chances of succeeding before the arbitral tribunal. That is management’s assessment, while the auditors stated that the final outcome of the proceedings remains unascertainable.

The disclosure also addresses proceedings involving Amit Mital, a director of A2Z Infra and non-executive director of the subsidiary. The High Court of Chhattisgarh granted him bail on July 3, 2026. The filing neither specifies the monetary impact of the investigation nor provides a date by which the arbitration or associated proceedings may conclude.

How do the cases fit A2Z Infra’s September results?

A2Z Infra reported standalone revenue from operations of Rs 33.58 crore for the six months ended September 30, 2026, down from Rs 43.93 crore in the corresponding six months of 2025. Total income declined to Rs 41.09 crore from Rs 44.52 crore, although other income increased to Rs 7.51 crore from Rs 0.59 crore over the same comparison.

The six-month standalone loss narrowed to Rs 25.05 lakh from Rs 39.31 lakh a year earlier. In the September 2026 quarter, revenue from operations was Rs 13.65 crore, compared with Rs 16.24 crore in the September 2025 quarter, while the quarter recorded a Rs 1.28 lakh loss versus a Rs 36.04 lakh profit a year earlier.

The statutory auditors issued a disclaimer of conclusion on the standalone results, citing liquidity issues, uncertainty around customer recoveries and lender balances. As of September 30, 2026, the auditors said accumulated losses were Rs 1,076.85 crore and current liabilities exceeded current assets by Rs 59.74 crore. They also said A2Z Infra had not recognised Rs 56.96 lakh of interest for the quarter on borrowings classified by lenders as non-performing assets, or NPAs.

What legal and financial milestones should readers watch?

The immediate legal milestones are the ongoing sole-arbitrator proceedings in the cogeneration dispute following the December 5, 2025 appointment, and the Chhattisgarh arbitration following the August 21, 2026 appointment. The filing does not disclose hearing dates, claim values in the Chhattisgarh matter, or a timetable for awards. Any outcome could clarify the status of the Rs 72.35 crore cogeneration awards and the subsidiary’s recovery claim.

On the financial side, management said it was in discussions with lenders on settlement of borrowings and dues, while the auditors said expected recovery from certain customers within 12 months was uncertain without confirmations. Accumulated unrecognised interest on NPA borrowings was Rs 6.48 crore as of September 30, 2026. These lender discussions and customer-recovery uncertainties were among the matters supporting the auditors’ disclaimer of conclusion.

Conclusion

A2Z Infra’s filing places two unresolved legal tracks alongside a constrained standalone financial position. The company continues to contest Rs 72.35 crore of cogeneration awards plus interest, after fully impairing the three affected plants in earlier periods, while its subsidiary has started arbitration to recover undisclosed dues in the Chhattisgarh contract matter.

Readers should watch for progress in the cogeneration arbitration initiated through the December 5, 2025 sole-arbitrator appointment, the Chhattisgarh arbitration initiated on August 21, 2026, and the pending Chandigarh Section 34 challenge. Management’s lender-settlement discussions and uncertain customer recoveries within 12 months are the other disclosed matters that could affect the position described in the September 30, 2026 results.