Union Bank, Canara Bank, and LIC Housing Finance to Challenge NCLT Order on Subhash Chandra's Repayment Plan

A consortium of lenders, including Union Bank of India (UK) Ltd, Canara Bank, and LIC Housing Finance Ltd, has decided to challenge a recent National Company Law Tribunal (NCLT) decision. The tribunal's order approved the personal insolvency repayment plan submitted by Zee Group Founder and Chairman Subhash Chandra.

Under the approved plan, the repayment is set at ₹6.5 crore against total admitted claims amounting to ₹22,006.57 crore. Public sector lenders have expressed strong grievances regarding the order, stating that it results in a negligible recovery rate of just 0.03 percent for their admitted dues.

The personal insolvency matter stems from a case originally filed by Indiabulls Housing Finance Ltd against Subhash Chandra. In official statements, Union Bank of India noted that its wholly-owned UK subsidiary, alongside Canara Bank and LIC Housing Finance Ltd, formally rejected the resolution plan and pleaded with the NCLT for its rejection. However, the plan secured approval due to a majority vote cast by private creditors.

Canara Bank detailed that it held a 1.60 percent voting share, while Union Bank of India held 0.76 percent, and LIC Housing Finance held 6.09 percent. Together, these public sector entities actively opposed and voted against Chandra's proposed repayment plan. Canara Bank further stated that it had demanded a forensic audit, which was disallowed by the tribunal due to the bank's minority voting share. The plan ultimately passed through the backing of other private creditors commanding an 80.81 percent voting share.

LIC Housing Finance Ltd echoed similar concerns, confirming that public financial institutions voted against the proposal. The company stated that it will immediately file an appeal before the National Company Law Appellate Tribunal (NCLAT) alongside the other public sector entities.

Additionally, HDFC Bank—which inherited a facility previously provided by HDFC Ltd—stated that its admitted claim accounted for 3.2 percent of the total stated claim amount. The bank confirmed it had also voted against the resolution and is currently exploring filing an appeal at the NCLAT.

"This case highlights a critical structural challenge in insolvency resolutions involving personal guarantors and multi-creditor frameworks. When minority public lenders hold significantly lower voting shares compared to private creditors, resolutions can pass even while delivering marginal recovery rates, in this case roughly 0.03 percent. The subsequent appeals at the NCLAT will test how judicial bodies balance majority commercial wisdom against the severe divergence in recovery outcomes for institutional lenders." — Dr. Shishir Gupta, Founder & CEO, StartupLanes