NCLT sends Subhash Chandra insolvency plan back to chairperson as benches fail to reach majority
Subhash Chandra's personal insolvency case has hit another legal hurdle, with the NCLT failing to reach a majority view on his Rs 6.5 crore repayment plan against claims of over Rs 22,000 crore. The matter has now been referred back to the NCLT President, while dissenting lenders have challenged the plan before the NCLAT.
- Sep 1, 2026,
- Updated Sep 1, 2026 6:50 AM IST
An NCLT bench on Monday referred the personal insolvency case against media baron Subhash Chandra to the tribunal's chairperson for fresh adjudication after failing to reach a majority consensus on a proposed Rs 6.5 crore repayment plan against admitted claims of more than Rs 22,000 crore, news agency PTI reported.
Meanwhile, lenders opposing the repayment plan, which proposes a steep 99.97 per cent haircut, approached the appellate tribunal NCLAT challenging the Third Member's order approving the plan.
Earlier, the matter had been referred to the Third Member after a two-member division bench comprising Ashok Kumar Bhardwaj (Member Judicial) and Reena Sinha Puri (Member Technical) delivered a split verdict on the repayment plan.
The Third Member's order dated August 26, which backed the Rs 6.5 crore repayment plan, was sent back to the original division bench for a formal order in line with the majority opinion, as required under Section 419 (5) of the Companies Act, 2013.
However, the division bench of Ashok Kumar Bhardwaj and Reena Sinha Puri on Monday said no majority view has emerged despite reconsidering the matter, following a differing opinion from a Third Member of the tribunal, and referred the matter back to the NCLT President.
The bench said the Third Member consciously passed an independent order. Thus, no majority view emerges and hence no order can be passed at this stage.
While Member (Technical) rejected the plan, the Member (Judicial) confined the plan to those who accepted and approved it and accorded liberty to dissenting creditors to recover their debt. He did not extinguish the claim of banks/financial institutions/dissenting creditors qua principal debtor/debtor/PG. The Third Member approved the plan but extinguished the right of all the creditors by applying Section 115(1) of the Code uniformly, it said.
Earlier in the day, as a precautionary measure, dissenting lenders of Subhash Chandra moved the insolvency appellate tribunal NCLAT based on the Third Member's order approving a Rs 6.5 crore payment by the Essel Group chairman against creditor claims of about Rs 22,006.57 crore in his personal insolvency resolution process.
MUST READ: Subhash Chandra says NCLT insolvency claim is ₹3,992 crore, not ₹22,000 crore as reported
Solicitor General Tushar Mehta, appearing for LIC Housing Finance, mentioned the matter before an NCLAT bench comprising Officiating Chairperson Justice Yogesh Khanna and sought an urgent hearing in the second half of the day.
Mehta, who also represented Canara Bank and Union Bank, said that allowing the order to continue would defeat the very purpose of the Insolvency & Bankruptcy Code and requested the bench to hear the matter at 2 PM.
The National Company Law Appellate Tribunal (NCLAT) agreed to list the matter for hearing on Tuesday.
The dispute centres on the interpretation of Section 79(2)(g) of the IBC and its interplay with Section 115(1), which deals with the approval of a repayment plan by creditors.
The order
In the original order, Bhardwaj had confined the approval of the repayment plan to creditors who voted in its favour — about 80.8 per cent of creditors — while allowing dissenting financial institutions and banks, comprising roughly 19.2 per cent, to independently pursue debt recovery against Chandra outside the plan.
However, the Third Member, Justice Sharad Kumar Sharma, in an independent order, took a different view by applying Section 115(1) uniformly to all creditors. The move approved the plan but extinguished the claims of all creditors, including dissenting banks and financial institutions, against the personal guarantor.
The bench also noted that the Third Member disagreed with both members on the scope of the Adjudicating Authority's jurisdiction to question the Section 112 report submitted by the Resolution Professional on creditors' meetings.
ALSO READ: ‘My borrowing is ₹0’: Subhash Chandra explains ₹22,000 crore personal guarantee controversy
Sharma rejected the claims of the dissenting creditors led by LIC Housing Finance, which had argued that the payout was unviable and unlawful.
It had contended that against admitted claims of approximately Rs 22,006.57 crore, the repayment plan proposed payment of only Rs 6.25 crore to creditors and Rs 25 lakh towards process costs.
In its 144-page order, Sharma said the resolution professional's valuation showed that Chandra's personal estate was worth significantly less than the amount offered under the plan. It further held that dissenting creditors were unlikely to recover more by rejecting the plan, as Chandra would then face bankruptcy rather than being in a position to make payments through financial recovery.
An NCLT bench on Monday referred the personal insolvency case against media baron Subhash Chandra to the tribunal's chairperson for fresh adjudication after failing to reach a majority consensus on a proposed Rs 6.5 crore repayment plan against admitted claims of more than Rs 22,000 crore, news agency PTI reported.
Meanwhile, lenders opposing the repayment plan, which proposes a steep 99.97 per cent haircut, approached the appellate tribunal NCLAT challenging the Third Member's order approving the plan.
Earlier, the matter had been referred to the Third Member after a two-member division bench comprising Ashok Kumar Bhardwaj (Member Judicial) and Reena Sinha Puri (Member Technical) delivered a split verdict on the repayment plan.
The Third Member's order dated August 26, which backed the Rs 6.5 crore repayment plan, was sent back to the original division bench for a formal order in line with the majority opinion, as required under Section 419 (5) of the Companies Act, 2013.
However, the division bench of Ashok Kumar Bhardwaj and Reena Sinha Puri on Monday said no majority view has emerged despite reconsidering the matter, following a differing opinion from a Third Member of the tribunal, and referred the matter back to the NCLT President.
The bench said the Third Member consciously passed an independent order. Thus, no majority view emerges and hence no order can be passed at this stage.
While Member (Technical) rejected the plan, the Member (Judicial) confined the plan to those who accepted and approved it and accorded liberty to dissenting creditors to recover their debt. He did not extinguish the claim of banks/financial institutions/dissenting creditors qua principal debtor/debtor/PG. The Third Member approved the plan but extinguished the right of all the creditors by applying Section 115(1) of the Code uniformly, it said.
Earlier in the day, as a precautionary measure, dissenting lenders of Subhash Chandra moved the insolvency appellate tribunal NCLAT based on the Third Member's order approving a Rs 6.5 crore payment by the Essel Group chairman against creditor claims of about Rs 22,006.57 crore in his personal insolvency resolution process.
MUST READ: Subhash Chandra says NCLT insolvency claim is ₹3,992 crore, not ₹22,000 crore as reported
Solicitor General Tushar Mehta, appearing for LIC Housing Finance, mentioned the matter before an NCLAT bench comprising Officiating Chairperson Justice Yogesh Khanna and sought an urgent hearing in the second half of the day.
Mehta, who also represented Canara Bank and Union Bank, said that allowing the order to continue would defeat the very purpose of the Insolvency & Bankruptcy Code and requested the bench to hear the matter at 2 PM.
The National Company Law Appellate Tribunal (NCLAT) agreed to list the matter for hearing on Tuesday.
The dispute centres on the interpretation of Section 79(2)(g) of the IBC and its interplay with Section 115(1), which deals with the approval of a repayment plan by creditors.
The order
In the original order, Bhardwaj had confined the approval of the repayment plan to creditors who voted in its favour — about 80.8 per cent of creditors — while allowing dissenting financial institutions and banks, comprising roughly 19.2 per cent, to independently pursue debt recovery against Chandra outside the plan.
However, the Third Member, Justice Sharad Kumar Sharma, in an independent order, took a different view by applying Section 115(1) uniformly to all creditors. The move approved the plan but extinguished the claims of all creditors, including dissenting banks and financial institutions, against the personal guarantor.
The bench also noted that the Third Member disagreed with both members on the scope of the Adjudicating Authority's jurisdiction to question the Section 112 report submitted by the Resolution Professional on creditors' meetings.
ALSO READ: ‘My borrowing is ₹0’: Subhash Chandra explains ₹22,000 crore personal guarantee controversy
Sharma rejected the claims of the dissenting creditors led by LIC Housing Finance, which had argued that the payout was unviable and unlawful.
It had contended that against admitted claims of approximately Rs 22,006.57 crore, the repayment plan proposed payment of only Rs 6.25 crore to creditors and Rs 25 lakh towards process costs.
In its 144-page order, Sharma said the resolution professional's valuation showed that Chandra's personal estate was worth significantly less than the amount offered under the plan. It further held that dissenting creditors were unlikely to recover more by rejecting the plan, as Chandra would then face bankruptcy rather than being in a position to make payments through financial recovery.