NCLT Approves 99.97% Debt Haircut for Subhash Chandra

The National Company Law Tribunal (NCLT) approved a personal insolvency resolution plan for Subhash Chandra, the founder of Essel Group, allowing him to settle admitted creditor claims of approximately ₹22,006.57 crore with a payout between ₹6.25 crore and ₹6.5 crore. The settlement represents a haircut of nearly 99.97% for lenders.

The proceedings began in 2022 after Sammaan Capital, formerly Indiabulls Housing Finance Limited, filed a plea regarding a ₹170 crore loan for which Chandra served as a personal guarantor. The approval followed a split verdict among tribunal members, which was resolved by Member Nilesh Sharma. Sharma ruled that the plan met the required 80.81% vote share and noted that Chandra's personal estate was worth significantly less than the offered amount.

Several financial institutions, including Canara Bank and LIC Housing Finance, opposed the plan. LIC Housing Finance argued the payout was unlawful and unviable, noting it would receive only ₹38.09 lakh against a claim of ₹1,322.39 crore. In response, Sharma directed the Resolution Professional to exclude unsupported claims from creditors Anil Kumar and Sunil Jain before redistributing the funds.

The decision drew sharp criticism from the Indian National Congress. MP Jairam Ramesh characterized the settlement as a "mundan" rather than a haircut, claiming the decision makes a "complete mockery" of the Insolvency and Bankruptcy Code, 2016.