6 days ago
NCLT Approves Subhash Chandra’s Rs 6.5-Crore Repayment Plan
Subhash Chandra owes lenders about Rs 22,006 crore.
His approved plan offers about Rs 6.5 crore in total.
That means creditors may receive only about three paise for every Rs 100 they claimed.
LIC Housing Finance and other lenders said the amount was far too small and uncertain.
Most voting creditors, representing 80.81% of the vote, supported the plan.
NCLT member Nilesh Sharma said the tribunal should not replace the business decision made by creditors.
The tribunal also said Chandra’s personal estate was worth less than the amount offered.
It believed creditors might recover more from the main borrowers if Chandra’s insolvency were resolved instead of ending in bankruptcy.
The plan still needs a formal order from the original bench and will apply to creditors who opposed it as well.
NCLT member Nilesh Sharma approved Subhash Chandra’s Rs 6.5-crore repayment plan against admitted claims of about Rs 22,006.57 crore.
The plan implies a nearly 99.97% haircut, with creditors recovering roughly three paise for every Rs 100 owed.
Creditors representing 80.81% of the voting share supported the proposal, while objecting lenders held less than 20%.
LIC Housing Finance and several banks called the recovery inadequate, tentative, unviable or unlawful, but the tribunal rejected their objections.
The plan will bind assenting and dissenting creditors under Section 115 of the IBC; a formal order and revised creditor list remain pending.
- Who
- Subhash Chandra, NCLT member Nilesh Sharma, LIC Housing Finance, other lenders and the National Company Law Tribunal.
- What
- A third-member NCLT ruling approved a Rs 6.5-crore repayment plan against admitted claims of about Rs 22,006.57 crore.
- Where
- Before the National Company Law Tribunal in a case connected with Mumbai.
- When
- Sharma’s ruling was issued on Tuesday, August 26; creditors voted in November 2024, and the original bench issued a split verdict in September 2025, according to the reports.
- Why
- The tribunal found that the plan had sufficient creditor support and that Chandra’s personal estate was valued below the amount offered.
Objecting Creditors and Critics
NCLT and Supporting Creditors
Adequacy of recovery
Objecting Creditors and Critics
LIC Housing Finance and other lenders argued that the recovery was negligible, citing Rs 38.09 lakh against LIC Housing Finance’s Rs 1,322.39-crore claim.
NCLT and Supporting Creditors
The tribunal said the valuation of Chandra’s personal estate was below the amount offered, so rejecting the plan might not produce a better recovery.
Certainty and legality
Objecting Creditors and Critics
Objecting creditors said the Rs 6.5-crore proposal was indicative, tentative, unviable and unlawful, and questioned whether linked entities influenced the vote.
NCLT and Supporting Creditors
Nilesh Sharma rejected the objections, citing 80.81% creditor support and holding that a forensic audit was not compulsory before approval.
Tribunal’s role and creditor rights
Objecting Creditors and Critics
Dissenting lenders argued that they should not be forced to accept such a small recovery. Congress leader Jairam Ramesh called the outcome a mockery of the Insolvency and Bankruptcy Code.
NCLT and Supporting Creditors
The NCLT said its role was supervisory, corrective and judicial rather than to replace creditors’ commercial judgment. It held that Section 115 binds both supporting and dissenting creditors.
Key facts
- Admitted creditor claims
- About Rs 22,006.57 crore
- Total plan value
- Rs 6.5 crore, including Rs 6.25 crore for creditors and Rs 25 lakh for insolvency costs
- Estimated haircut
- Nearly 99.97%, implying recovery of roughly 0.03%
- LIC Housing Finance claim
- Rs 1,322.39 crore
- LIC Housing Finance recovery
- Rs 38.09 lakh, or approximately 0.028% of its admitted claim
- Creditor vote
- Creditors representing 80.81% of the voting share approved the plan
- Case origin
- Sammaan Capital, formerly Indiabulls Housing Finance, initiated proceedings over a Rs 170-crore Vivek Infracon loan personally guaranteed by Chandra
- Next step
- The resolution professional must prepare a revised final creditor list before the original bench issues a formal order
Quotes
National Company Law Tribunal
The insolvency tribunal ruling on the potential recovery available to dissenting creditors
“Once the Repayment Plan is approved under Section 114, its binding effect is governed by Section 115 of the Code. The Adjudicating Authority (NCLT) cannot make the plan binding only on the creditors who voted in its favour while allowing dissenting creditors to independently pursue recovery of their full original debt.”
financialexpress.com
“The AA (NCLT) neither substitutes its own commercial wisdom for that of the creditors nor does it conduct a wide-ranging investigation into allegations that are unsupported by reliable material. Its role is supervisory, corrective, and judicial, not investigative unless the statute so requires.”
rediff.com
financialexpress.com
Sources
Creditors Face Three-Paise Recovery Per ₹100, Subhash Chandra’s Repayment Plan Nears NCLT Approval
NCLT clears Subhash Chandra's Rs 6.5 crore payout for Rs 22,006 crore debt
Subhash Chandra insolvency: How creditors will recover just 3 paise for every ₹100 owed
99.97% haircut! NCLT approves Subhash Chandra's Rs 6.5 crore payout to settle Rs 22,006 crore dues: Report
Congress slams, Vijay Mallya cheers as NCLT lets Subhash Chandra pay Rs 6.5 crore for 22,006-crore dues
NCLT approves Subhash Chandra’s Rs 6.5-crore repayment plan against Rs 22,006 crore dues
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