Archive · 8 Sep 2026
Subhash Chandra Insolvency Case Faces Huge Haircut and NCLT Freeze
Subhash Chandra’s insolvency case involved a very large amount of unpaid bank claims.
A proposed settlement would have paid banks ₹6.25 crore against claims of ₹22,006 crore.
That meant banks would recover only a tiny fraction of what they said they were owed.
Many people criticized the deal.
The tribunal then stopped the settlement and froze Chandra’s assets.
It said the earlier judges had not reached a clear majority decision.
The timing was unusual because the intervention came soon after the deal became a national controversy.
The article says this does not prove that public anger caused the tribunal’s action.
It also says extremely low recoveries have occurred in other personal-guarantor insolvency cases.
A settlement reduced ₹22,006 crore in admitted bank claims to ₹6.25 crore, representing a 99.97% haircut.
The National Company Law Tribunal froze the settlement and Subhash Chandra’s assets after a two-member bench produced no majority view.
A five-member bench said the tribunal lacked a clear majority view under Section 419(5) of the Companies Act.
The intervention followed widespread public criticism, though the tribunal’s order described a procedural issue developed over 11 months.
IBBI data showed creditors recovered about 1% across 64 approved personal-guarantor repayment plans since December 2019.
- Who
- Subhash Chandra, creditor banks including LIC Housing Finance, Canara Bank and Union Bank, and the National Company Law Tribunal.
- What
- A proposed insolvency settlement offering ₹6.25 crore against ₹22,006 crore in admitted claims was frozen, along with Chandra’s assets.
- When
- The tribunal’s intervention followed public criticism; the earlier bench split in September 2025, and a third member issued an opinion in August 2026.
- Where
- Before the National Company Law Tribunal.
- Why
- The tribunal said there was no clear majority view after the original bench divided; the timing also raised questions because the case had become a national controversy.
Concerns about the settlement
Concerns about the intervention
The 99.97% haircut
Concerns about the settlement
The settlement appears exceptionally unfavorable to creditors because it would resolve ₹22,006 crore in claims for only ₹6.25 crore.
Concerns about the intervention
The article notes that very low recoveries are not unique to Chandra’s case, with creditors recovering about 1% across 64 approved personal-guarantor repayment plans.
The tribunal’s action
Concerns about the settlement
The settlement may have required correction, especially because the original two-member bench failed to produce a majority view.
Concerns about the intervention
The five-member intervention and asset freeze were unusual, and their timing—soon after public outrage—raises questions about whether public controversy influenced the response.
How extreme haircuts should be reviewed
Concerns about the settlement
The Videocon resolution shows that unusually low recoveries can be challenged through legal review, with the NCLAT setting that plan aside and sending it back to creditors.
Concerns about the intervention
The Chandra case is unusual because scrutiny came through a specially constituted five-member bench rather than solely through the ordinary appellate route.
- Admitted bank claims
- ₹22,006 crore
- Proposed settlement
- ₹6.25 crore
- Effective haircut
- 99.97%
- Tribunal intervention
- A five-member bench froze the settlement and Chandra’s assets.
- Procedural basis
- The bench cited the absence of a clear majority view under Section 419(5) of the Companies Act.
- Personal-guarantor cases
- IBBI data listed 5,186 applications since December 2019, with 64 approved repayment plans.
- Recovery across those plans
- Creditors recovered about 1% of admitted claims collectively.