NCLAT to hear creditors’ urgent plea against Subhash Chandra’s ₹6.5-crore repayment plan tomorrow

The National Company Law Appellate Tribunal (NCLAT) on Monday agreed to hear the urgent plea made by some creditors against an earlier order of the Delhi branch of the National Company Law Tribunal (NCLT) on the repayment plan of ₹6.5 crore for Zee Group founder Subhash Chandra.

Solicitor General Tushar Mehta, representing the creditors, requested the appellate tribunal to hear the matter urgently. The NCLAT agreed to take up the matter on Tuesday at 10:30 am. “There are two or three important questions which are to be decided, you know, and if those findings are correct, then, my lord, possibly we will be having a complete loss of intent and purpose of IBC,” said Mehta.

Who are the creditors?

The creditors in Subhash Chandra’s insolvency case include several financial institutions, among them HDFC Bank, LIC Housing Finance, Union Bank of India, Canara Bank and Sammaan Capital, formerly known as Indiabulls Housing Finance, which initiated the insolvency proceedings against Chandra in 2022.

A total of 23 creditors participated in voting on the repayment plan, which received 80.81% approval by voting value, although several institutional lenders opposed it.

Why are the creditors challenging the order?

The creditors have challenged the NCLT’s approval of Chandra’s repayment plan, arguing that the proposed payment of ₹6.5 crore does not adequately address the dues owed to them.

The plan proposes a total payment of ₹6.5 crore only, of this amount, ₹6.25 crore will go towards settling dues to creditors, while ₹25 lakh has been earmarked for expenses related to the insolvency process. Together, the two components make up the ₹6.5 crore repayment package.

How has Subhash Chandra responded to the allegations?

Chandra has sought to reassure lenders over the reconciliation of outstanding dues from borrowers, saying that his personal debt was nil despite personal guarantees worth ₹22,000 crore. In a statement issued by his office on Sunday, Chandra clarified that the ₹22,000 crore figure represented guarantees he had provided for loans raised by other entities associated with the group, and not his own borrowings.

According to the statement, around ₹4,800 crore of these personal guarantees were issued at the time the underlying loans were taken, while the remaining guarantees were provided after defaults had already occurred.