Samtex Fashions Receives ₹437.57 Crore DRT Demand Notice

Samtex Fashions Ltd received a demand notice for ₹437.57 crore from Delhi's DRT-III on November 4, 2026, following a recovery certificate in favour of National Asset Reconstruction Company Ltd. The amount carries pendentelite and future simple interest of 10% a year from March 20, 2018, along with ₹1.5 lakh in costs.

Why did Samtex Fashions receive the DRT demand notice?

Samtex Fashions received the notice because it was a corporate guarantor for loan facilities availed by its wholly owned subsidiary, SSA International Ltd. The Recovery Officer of the Debts Recovery Tribunal-III, Delhi issued the demand notice dated October 30, 2026, under Recovery Certificate No. 44/2026.

The recovery certificate was issued by the Presiding Officer of DRT-III on October 23, 2026. It followed the tribunal's October 3, 2026 order in the case brought by National Asset Reconstruction Company Ltd, or NARCL, against SSA International and other parties. Samtex Fashions has been named Certificate Debtor No. 9 in the recovery proceedings.

The underlying dispute concerns term loan and cash credit facilities taken by SSA International. Samtex Fashions had provided a corporate guarantee for these facilities, which led to its inclusion in the tribunal proceedings. The earlier tribunal order allowed NARCL's recovery application and dismissed SSA International's counterclaim.

What amount must Samtex Fashions and the other debtors pay?

Samtex Fashions and the other Certificate Debtors have been held jointly and severally liable for a principal amount of ₹437.57 crore. The exact principal stated in the order is ₹437,57,28,362.70, or ₹437.57 crore when expressed in a single standard unit.

The order also provides for pendentelite and future interest at 10% per annum on a simple-interest basis from March 20, 2018, until realisation. In addition, the tribunal awarded costs of ₹1.5 lakh against the debtors. The disclosed maximum exposure is therefore the principal amount, accumulated interest and costs, subject to the joint and several liability of the Certificate Debtors.

Joint and several liability allows the recovery process to be directed at any one or more of the debtors for the full certified amount. This means Samtex Fashions may be pursued for the entire liability regardless of the amount attributable to SSA International or any other co-debtor. The notice does not provide a breakup of liability among the parties.

What restrictions apply to Samtex Fashions after the notice?

Samtex Fashions faces restrictions on dealing with specified assets after service of the demand notice. The recovery certificate restrains the defendants from depleting, transferring, encumbering, alienating, selling or otherwise dealing with hypothecated assets and other movable or immovable properties without first paying NARCL's claim.

An October 29, 2026 order also directed that consequences under Rule 16 of the Second Schedule to the Income-tax Act, 1961 would apply on service of the notice. Under this framework, a defaulter cannot mortgage, charge, lease or otherwise deal with property without the Recovery Officer's permission.

The Recovery Officer declined a request for pre-notice attachment of immovable property. However, notices were issued seeking replies and details of assets. The Certificate Debtors must submit particulars of their assets through an affidavit before the next hearing scheduled for December 4, 2026.

What are the next legal and recovery steps in the case?

Samtex Fashions and the other Certificate Debtors have been directed to pay the certified sum within 15 days of receiving the demand notice. The recovery process will proceed under Sections 25 to 28 of the Recovery of Debts and Bankruptcy Act, 1993, as stated in the notice.

Samtex Fashions said it is evaluating the financial impact of the development and consulting its legal team on available remedies. The company said it would provide further updates as required under the SEBI Listing Regulations. It has not disclosed a settlement, payment arrangement, appeal filing or a quantified provision in the information provided.

The October 3 tribunal order represented a key procedural development because it resolved the recovery application in NARCL's favour and dismissed SSA International's counterclaim. The subsequent recovery certificate and demand notice move the matter into the recovery stage, with payment directions, asset disclosures and restrictions on property dealings.

How does the demand affect Samtex Fashions and investors?

The ₹437.57 crore principal exposure is material relative to Samtex Fashions' disclosed operating context, particularly because its legacy ready-made garment manufacturing operations have remained shut since FY2019. Interest at 10% per annum has been specified from March 20, 2018, which increases the potential amount payable over time until realisation.

For investors, the immediate issues are the company's assessment of financial impact, any legal remedies it may pursue, its ability to comply with the recovery directions and disclosures around asset particulars. The notice itself does not establish the final amount of interest accrued or state how much, if any, recovery may be made from individual co-debtors.

Samtex Fashions was listed among stocks in news with a reported 6.54% move, while the demand notice was the identified company-specific development. The supplied information does not establish that the price movement was caused solely by the notice. The company operates in the textiles and apparel sector, but the legal claim stems from its guarantee for its subsidiary's borrowing rather than a reported change in textile operations.

Conclusion

The DRT-III demand notice places Samtex Fashions within a formal recovery process for ₹437.57 crore, plus 10% simple annual interest from March 20, 2018 and ₹1.5 lakh of costs. Its corporate guarantee for SSA International's borrowing, combined with joint and several liability, means the company can be pursued for the full certified claim.

The next disclosed milestone is the December 4, 2026 hearing, before which the Certificate Debtors must file asset particulars on affidavit. Investors will also watch for Samtex Fashions' assessment of the financial impact, any legal action or remedy it chooses to pursue, and subsequent disclosures under SEBI Listing Regulations.