CHL settlement extension expires as EXIM cases remain pending

CHL Limited’s latest extension under its Rs 3.4 crore One Time Settlement with EXIM Bank expired on September 30, 2026, and had not been renewed by November 5, 2026, while litigation over its subsidiary’s loan remained pending before the Supreme Court of India and the Debt Recovery Tribunal in Delhi.

Why did CHL's EXIM Bank settlement extension expire?

CHL’s latest extension under the One Time Settlement, or OTS, expired on September 30, 2026, according to the limited-review report signed on November 5, 2026. The auditor said CHL had requested EXIM Bank to grant another extension, but the bank had not extended the arrangement by the date of the report.

The OTS was entered into by EXIM Bank, the principal borrower and the guarantors for Rs 3.4 crore, under EXIM Bank’s approval letter dated November 23, 2023. The loan was taken by CHL International, CHL’s subsidiary, and CHL is identified as a guarantor, making the expired extension relevant to both the subsidiary borrowing and CHL’s corporate obligations.

What is the difference between the settlement and stated liability?

CHL’s disclosed OTS amount is Rs 3.4 crore, while the Economic Court of Dushanbe had crystallised liability against the borrowers and guarantors at USD 34 million in its December 12, 2023 judgment in Case No. 52/2023. The filing does not provide an exchange rate or an explanation reconciling the Rs 3.4 crore settlement amount with the USD 34 million liability, so the two figures should not be treated as directly comparable values.

The settlement was initially described in the EXIM Bank approval letter of November 23, 2023 and was subsequently extended from time to time at CHL’s request. What changed by the September 2026 quarter-end was that the last stated extension had lapsed, whereas the report does not disclose any new deadline, revised settlement terms, payment schedule or EXIM Bank approval after September 30.

Which EXIM Bank cases involving CHL are still pending?

CHL said EXIM Bank’s Civil Appeal No. 1671 of 2019 remains pending before the Supreme Court of India. The appeal challenges the January 16, 2019 order of the National Company Law Appellate Tribunal, or NCLAT, New Delhi, which had upheld the National Company Law Tribunal, or NCLT, Delhi decision dismissing EXIM Bank’s petition under Section 7 of the Insolvency and Bankruptcy Code, 2016.

Proceedings are also pending before Debt Recovery Tribunal-III, Delhi, through Transfer Application No. 221 of 2022, titled EXIM Bank versus Dr. Lalit Kumar Malhotra, and Transfer Application No. 224 of 2022, titled EXIM Bank versus CHL. The auditor described these as applications against the personal and corporate guarantors respectively and said EXIM Bank had placed the OTS on record as a settlement under implementation.

How did the auditor treat CHL's expired settlement extension?

CHL’s statutory auditor drew an emphasis-of-matter paragraph to the EXIM Bank loan, the expired OTS extension and the continuing litigation, but did not modify its review conclusion. In the standalone limited-review report dated November 5, 2026, the auditor said its review had not identified anything suggesting the September-quarter unaudited financial statements contained a material misstatement or failed required disclosure.

The consolidated review report reached the same unmodified conclusion and identified CJSC CHL International as the subsidiary included in the group results. The consolidated report said CHL International recorded second-quarter revenue of Rs 14.99 crore and a net loss after tax of Rs 2.07 crore for the quarter ended September 30, 2026, while its six-month revenue was Rs 40.18 lakh and net profit after tax was Rs 5.12 crore.

What does CHL International's reported performance show?

CHL International’s reported second-quarter loss of Rs 2.07 crore contrasts with a six-month net profit after tax of Rs 5.12 crore for April 1 to September 30, 2026. The auditor said the six-month figure included currency exchange-fluctuation gains of Rs 43.30 crore, compared with exchange-fluctuation gains of Rs 7.37 crore in the September quarter, indicating that reported comprehensive performance included a substantial currency component.

For the same six-month period, CHL International reported total comprehensive income of Rs 48.42 crore and net cash flow of Rs 1.05 crore. The group auditor did not itself review the subsidiary’s financial results; it relied on another auditor’s review report for the subsidiary amounts and stated that its own conclusion was not modified in respect of that matter.

Conclusion

CHL faces an unresolved position in which a Rs 3.4 crore OTS extension expired on September 30, 2026, while EXIM Bank proceedings remain active in the Supreme Court and Delhi’s Debt Recovery Tribunal. The disclosed USD 34 million liability determined by the Economic Court of Dushanbe on December 12, 2023 is separate from the settlement figure, and the filing does not state how the two amounts are reconciled.

The immediate item to watch is whether EXIM Bank responds to CHL’s request for another OTS extension after the November 5, 2026 review-report date. Investors can also monitor developments in Civil Appeal No. 1671 of 2019 and Transfer Applications No. 221 and 224 of 2022, as well as later disclosures on the loan and any revised settlement terms.