Lenders Challenge NCLT Approval of Subhash Chandra Repayment Plan

Several major lenders, including Canara Bank, Union Bank of India (UK) Ltd, LIC Housing Finance Ltd, and HDFC Bank, are challenging a National Company Law Tribunal (NCLT) decision to approve a personal insolvency resolution plan for Subhash Chandra. The NCLT approved the plan on August 25, allowing the Essel Group founder to settle admitted creditor claims of approximately ₹22,006.57 crore with a payment of ₹6.5 crore, representing a haircut of nearly 99.97%.

While the plan secured 80.814% approval from the committee of creditors, dissenting lenders allege the vote was manipulated. They claim five entities linked to Chandra's family controlled 61.78% of the voting share and should have been barred as associates under the Insolvency and Bankruptcy Code. The NCLT bench was divided on the issue; member Nilesh Sharma cast the deciding vote in favor of the plan, while technical member Reena Sinha Puri opposed it, citing procedural irregularities.

Subhash Chandra has disputed the ₹22,000 crore liability, asserting he acted only as a personal guarantor for corporate borrowings rather than a personal borrower. He claims the actual claims from dissenting creditors total only ₹3,992 crore and notes that affiliated borrowing entities have already repaid approximately ₹43,000 crore of a ₹45,000 crore debt burden outstanding since January 2019. The dispute, originally initiated by Indiabulls Housing Finance, will now move to the National Company Law Appellate Tribunal (NCLAT).