Lenders Appeal NCLT Ruling on Subhash Chandra's Debt
The National Company Law Appellate Tribunal (NCLAT) has agreed to hear an urgent challenge filed by several major financial institutions against the National Company Law Tribunal’s (NCLT) approval of Zee Group founder Subhash Chandra’s debt repayment plan. Represented by Solicitor General Tushar Mehta, creditors pressed the appellate tribunal for an immediate hearing, which the bench granted for Tuesday at 10:30 am.
The Contested ₹6.5 Crore Resolution Plan
The NCLT had approved Chandra's repayment proposal, which totals ₹6.5 crore. Under this framework, ₹6.25 crore is designated for distribution among the creditors, while the remaining ₹25 lakh is allocated to cover the costs associated with the insolvency process.
Major financial institutions, including HDFC Bank, Axis Bank, Canara Bank, RBL Bank, and Union Bank of India, explicitly voted against this proposal. HDFC Bank, for instance, anticipates recovering only about 3.2% of its total claim under the approved payout structure.
NCLT's Rationale for Approval
The NCLT’s approval stemmed from a decision by Nilesh Sharma, a judicial member of the insolvency bench. Sharma observed that while creditors participated in the proceedings, they did not establish sufficient prejudice to overturn the proposal.
He further maintained that the tribunal should not substitute its commercial judgment for a decision supported by the required majority of creditors. However, Sharma’s formal order is still pending, with the matter awaiting final directions from the regular bench.
Understanding Subhash Chandra's Personal Guarantees
Government sources have clarified that these personal insolvency proceedings do not arise from direct, large-sum loans taken by Subhash Chandra himself. Instead, the proceedings were triggered by personal guarantees he extended for loans secured by various entities linked to the Essel and Zee groups.
Out of the total outstanding debt, approximately ₹2,574 crore relates to claims where Chandra had provided personal guarantees, either at the initial loan disbursement or as secondary security.