NCLT Approves Subhash Chandra's ₹6.5 Crore Repayment Plan Against ₹22,006 Crore Claims

The National Company Law Tribunal (NCLT) has allowed Zee Group Founder and Chairman Subhash Chandra’s repayment plan to pay ₹6.5 crore against admitted claims amounting to ₹22,006.57 crore.

The order gives creditors a recovery of approximately 0.03 percent of their admitted dues. Legal experts note that the case highlights the ongoing balance between a debtor’s actual ability to pay and the legitimate expectations of recovery for creditors under the Insolvency and Bankruptcy Code (IBC).

The order was passed by a third judicial member of the insolvency court following a personal insolvency case filed by Indiabulls Housing Finance. In this matter, Chandra acted as a personal guarantor for loans taken by various Essel Group entities.

While creditors admitted claims of ₹22,006.57 crore against him, the proposed repayment plan offered ₹6.5 crore based on his disclosed personal assets and estate. The NCLT did not cap Chandra’s overall liability at ₹6.5 crore. Instead, it approved the plan after creditors holding 80.814 per cent of the voting share backed it. Furthermore, the Resolution Professional (RP) concluded that the amount represented the recoverable value available from the personal guarantor’s disclosed assets.

The tribunal also directed the consequential redistribution of the repayment amount among the remaining eligible creditors in accordance with the approved plan. The matter will now return to the Original Division Bench to pass final orders reflecting the majority opinion.

Subhash Chandra declined to comment on the ruling, stating that the matter remains under judicial scrutiny.

According to Deep Roy, Managing Partner at Equilex, the NCLT's decision follows the commercial wisdom of the Committee of Creditors (CoC). He noted that the tribunal refused to second-guess the CoC members and interpreted Section 114 of the Code to mean the NCLT is bound to approve a plan if the majority of lenders have assented.

The proceedings addressed allegations of material irregularities and breaches of IBC rules regarding the repayment plan's conduct. However, the NCLT stated it was not bound to reject the plan merely due to procedural lapses and minor irregularities in the admission of certain claims. It held that there was no other established material irregularity or violation of the Code's provisions.

Despite the approval, legal observers note that the litigation may continue. Megha Sharma, an advocate at the Delhi High Court, pointed out that dissenting creditors have a 30-day statutory remedy to file an appeal. Lenders including HDFC Bank, Axis Bank, and LIC Housing Finance have alleged the illegal inclusion of associate entity votes to meet the 75 per cent threshold.

Tushar Agarwal, Founder and Managing Partner of C.L.A.P. JURIS, added that the appropriate remedy for lenders is to test these issues in appeal. He noted that the case could carry wider implications for how personal-guarantor repayment plans are scrutinized when there is a substantial disparity between historical wealth and presently disclosed assets.

"This ruling highlights the complex realities of personal insolvency and guarantor liabilities under the IBC framework. When a tribunal respects the commercial wisdom of the Committee of Creditors based on verified personal assets, it reinforces statutory processes. However, the anticipated appeals from dissenting lenders indicate that accountability and recovery disputes in high-value cases will continue to face rigorous legal scrutiny before reaching a final resolution." — Dr. Shishir Gupta, Founder & CEO, StartupLanes