Subhash Chandra debt resolution: Lenders challenge NCLT approval for ₹6.5-crore plan in NCLAT

The National Company Law Appellate Tribunal (NCLAT) on August 31 agreed to take up an urgent challenge filed by creditors against the Delhi bench of the National Company Law Tribunal’s (NCLT) decision to approve Essel Group Chairman and Zee Group founder Subhash Chandra’s repayment plan.

Solicitor General Tushar Mehta, representing the creditors, pressed the appellate tribunal for an immediate hearing during a virtual mentioning of the matter. Accepting the request, the appellate bench agreed to hear the case on Tuesday at 10:30 am, according to a report by Mint.

The creditors' legal move follows the NCLT’s approval of Chandra’s repayment plan involving a total payout of ₹6.5 crore. Under the approved framework, ₹6.25 crore is designated for distribution among creditors, while the remaining ₹25 lakh is set aside to cover insolvency process costs.

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The approval came after Nilesh Sharma, the third judicial member brought onto the insolvency bench by the NCLT president in February 2026, cleared the proposal. In his observation, Sharma noted that creditors had actively participated in the proceedings without establishing sufficient prejudice, the report by Mint added.

He further held that the tribunal should not substitute its commercial judgment for a decision backed by the required majority of creditors. However, Sharma’s stance is yet to be formalised into a final order, as the matter remains pending before the regular bench for final directions.

Major financial institutions — including HDFC Bank, Axis Bank, Canara Bank, RBL Bank, and Union Bank of India — voted against the proposal. HDFC Bank, which expects to recover roughly 3.2% of its total claim under the proposed payout structure, had actively evaluated an appeal to the NCLAT prior to the collective challenge.

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Government sources clarified that the personal insolvency proceedings do not stem from direct loans running into thousands of crores taken by Chandra personally. Instead, the proceedings were triggered by personal guarantees he extended for loans secured by various Essel and Zee-linked entities.

Of the total outstanding debt, only around ₹2,574 crore pertains to claims where Chandra provided personal guarantees at the time of initial loan disbursement, with subsequent guarantees given as secondary security.