Subhash Chandra's ₹6.25 Cr Repayment Plan Hits NCLT Snag

Introduction

A repayment plan that had already drawn scrutiny for proposing to settle over ₹22,000 crore in claims for just ₹6.25 crore has now hit a fresh procedural roadblock. The National Company Law Tribunal has constituted an unprecedented five-member bench — the first of its kind in the tribunal's history — to decide the personal insolvency case against Zee Group founder Subhash Chandra, after the original panel failed to agree on whether the plan could actually be approved. Here's a complete, accurate breakdown of what happened and why it matters.

Table of Contents

1. What Was Announced
2. The Numbers: A Proposed 99.97% Haircut
3. How the Case Got Here
4. Why the Bench Couldn't Reach a Majority
5. Who's on the New Five-Member Bench
6. The Parallel Appeal at NCLAT
7. Background: How Chandra Ended Up in Personal Insolvency
8. What a Personal Guarantor Insolvency Case Actually Involves
9. Why This Case Is Legally Significant
10. What Happens Next
11. Case Studies: Comparable Insolvency Haircuts in India
12. Common Questions About the Case
13. FAQs
14. Conclusion
15. Key Takeaways
    

    What Was Announced

The National Company Law Tribunal has constituted a five-member bench to decide the personal insolvency case against Subhash Chandra, the Zee Group founder and Essel Group chairman, after a two-member bench held that no majority opinion had emerged on his proposed repayment plan. NCLT President Justice (retd) Anupinder Singh Grewal constituted the special bench, which is set to hear the matter at 10:15 AM on September 1. The development means a repayment plan widely reported the previous week as having received NCLT approval is not, in fact, backed by any final, operative order.

The Numbers: A Proposed 99.97% Haircut

At the center of the case is Chandra's proposal to pay ₹6.25 crore to creditors — separately reported by some outlets as ₹6.5 crore including additional process costs — against admitted claims of approximately ₹22,006.57 crore. If ultimately approved as originally reported, that would translate to creditors recovering only around 0.028% of their original claims, a haircut of roughly 99.97%, or nearly the full ₹22,000 crore. The repayment plan reportedly also includes a separate ₹25 lakh allocated specifically toward insolvency-process costs.

How the Case Got Here

The case traces back to a two-member NCLT bench comprising Judicial Member Ashok Kumar Bhardwaj and Technical Member Reena Sinha Puri, who delivered conflicting opinions on the repayment plan earlier this year. Under standard tribunal procedure, a third member, Nilesh Sharma, was then brought in to help resolve the deadlock. Sharma's opinion, delivered on August 25, included a notable finding: he declined to accept arguments that several entities — Veena Investments, Direct Media Distribution Ventures, World Crest Advisors, Lemonade Capital Advisors, and Corpcall Capital Advisors — should be excluded as Chandra's "associates" under Section 79(2)(g) of the Insolvency and Bankruptcy Code, ruling that the statutory definition of "associate" couldn't be expanded simply because those entities had alleged family, business, or commercial proximity to Chandra. That ruling meant their votes on the repayment plan couldn't be excluded, and Sharma also held that the plan would bind all creditors under Section 115 of the IBC, including those who had voted against it or abstained.

That August 25 opinion led to widespread reporting that the NCLT had effectively approved the ₹6.5 crore settlement, prompting banks to reportedly begin considering or preparing challenges to the outcome.

Why the Bench Couldn't Reach a Majority

On August 31, the original two-member bench of Bhardwaj and Puri held that, despite Sharma's third-member opinion, no final order could actually be passed, because no true majority had emerged on the underlying legal outcome of the plan. In other words, while a third opinion had been delivered to break the initial deadlock, the original bench determined that the combination of opinions still didn't constitute the required majority needed to issue a binding, final order — a procedural nuance that effectively reopened the entire question of how the case should be decided.

Who's on the New Five-Member Bench

The newly constituted special bench, formed under Section 419(5) of the Companies Act, is the first five-member bench in NCLT's history. It comprises NCLT President Justice (retd) Anupinder Singh Grewal, Judicial Members Bachu Venkat Balaram Das and Mahendra Khandelwal, and Technical Members Atul Chaturvedi and Ravindra Chaturvedi. The bench's task is significantly broader than simply approving or rejecting the ₹6.25 crore plan: it must resolve both whether Chandra's repayment proposal can be approved at all, and the underlying procedural question of whether a valid majority opinion actually exists within the tribunal's prior rulings.

The Parallel Appeal at NCLAT

Adding another layer of complexity, LIC Housing Finance has separately challenged the August 25 opinion before the National Company Law Appellate Tribunal (NCLAT). Solicitor General Tushar Mehta sought an urgent hearing on the matter on August 31, arguing that allowing the original order to stand would defeat the broader purpose of the Insolvency and Bankruptcy Code. That NCLAT appeal is also scheduled to be heard on September 1, meaning the case is being actively contested on two fronts simultaneously — before the newly formed special NCLT bench and before the appellate tribunal.

Background: How Chandra Ended Up in Personal Insolvency

The insolvency proceedings against Chandra date back to 2022, when Indiabulls Housing Finance Limited (now known as Sammaan Capital) approached the NCLT under Section 95 of the IBC. Chandra had personally guaranteed a ₹170 crore loan extended to Vivek Infracon; when that loan turned bad, Indiabulls moved to initiate personal insolvency proceedings against him as the guarantor. The plea was formally admitted by the NCLT in 2024, setting the stage for the multi-year proceedings that have now culminated in this unprecedented five-member bench formation.

What a Personal Guarantor Insolvency Case Actually Involves

Personal guarantor insolvency, governed by Section 95 of the IBC, allows creditors to pursue individuals who have personally guaranteed corporate loans, separately from any insolvency proceedings against the underlying company itself. This mechanism became significantly more prominent in Indian insolvency law following a landmark Supreme Court ruling that upheld the constitutional validity of personal guarantor insolvency provisions, giving lenders a direct legal path to pursue individuals — often company founders or promoters — who backed corporate debt with personal guarantees, rather than being limited solely to recovering from the corporate entity.

Why This Case Is Legally Significant

Beyond its high-profile nature given Chandra's prominence as a media industry figure, the case is being closely watched for what it could signal about how Indian tribunals handle personal guarantor insolvency cases involving extremely large gaps between claimed amounts and proposed settlements. The formation of the first-ever five-member NCLT bench specifically to resolve a procedural deadlock also sets a notable institutional precedent, illustrating how the tribunal system handles situations where standard majority-opinion mechanisms fail to produce a clear, final outcome.

What Happens Next

Both the newly formed five-member NCLT bench and the NCLAT appeal brought by LIC Housing Finance are scheduled to be heard on September 1. The five-member bench's ruling will need to address two distinct questions: first, whether a valid majority opinion exists within the tribunal's prior proceedings at all, and second, on the substance, whether Chandra's ₹6.25 crore repayment plan can be approved as proposed. Given the scale of the proposed haircut and the involvement of multiple creditor institutions, further appeals beyond September 1 remain a real possibility regardless of how the special bench rules.

Case Studies: Comparable Insolvency Haircuts in India

The Videocon precedent: In an earlier, widely reported Indian insolvency case, creditors in the Videocon group's insolvency proceedings accepted a reported 96% haircut on their dues, a scale of loss that itself drew significant scrutiny and calls from the NCLT for an increased payout — illustrating that steep haircuts, while controversial, aren't without precedent in India's insolvency system, even if Chandra's proposed 99.97% figure would be notably steeper still.

The Siva Industries settlement: Another previously reported case saw banks agree to settle roughly ₹4,863 crore in debt for approximately ₹323 crore, a settlement that drew public questions at the time about why creditor institutions agreed to recover such a small fraction of the amounts owed — a comparison likely to resurface as commentary continues around the Chandra case's far steeper proposed haircut.

Common Questions About the Case

• Has the ₹6.25 crore plan actually been approved? No — despite earlier reporting suggesting approval following the August 25 third-member opinion, the original bench determined on August 31 that no valid final order exists, which is precisely why the five-member bench was formed.
• Is this only about Subhash Chandra personally, or does it affect Zee Entertainment as a company? This is specifically a personal guarantor insolvency case against Chandra as an individual, tied to a personal guarantee he provided on a corporate loan, distinct from any separate corporate-level proceedings involving Zee Entertainment itself.
• Why does the size of the haircut matter so much here? A proposed recovery of roughly 0.028% of admitted claims is an unusually steep haircut even by the standards of India's insolvency system, which is part of why creditor institutions like LIC Housing Finance are actively challenging the outcome.
  

  FAQs

1. What is Subhash Chandra's proposed repayment plan?
Chandra has proposed paying ₹6.25 crore to creditors against admitted claims of approximately ₹22,006.57 crore, plus a separate ₹25 lakh toward insolvency-process costs.

2. Why did the NCLT form a five-member bench?
The original two-member bench held that no majority opinion had emerged on the repayment plan even after a third member's opinion was delivered, prompting the tribunal's president to constitute a special five-member bench to resolve the deadlock.

3. Is this the first five-member bench in NCLT history?
Yes, according to reporting on the development, this marks the first time the tribunal has formed a five-member bench.

4. Has the repayment plan been officially approved?
No — while earlier reporting suggested approval following an August 25 third-member opinion, the original bench held on August 31 that no valid final order exists on the plan.

5. What triggered the insolvency proceedings against Subhash Chandra?
Indiabulls Housing Finance (now Sammaan Capital) initiated proceedings in 2022 under Section 95 of the IBC after a ₹170 crore loan to Vivek Infracon, personally guaranteed by Chandra, turned bad.

6. Who is challenging the case at the NCLAT?
LIC Housing Finance has filed an appeal at the National Company Law Appellate Tribunal challenging the August 25 opinion, with Solicitor General Tushar Mehta seeking an urgent hearing.

7. What percentage of claims would creditors recover under the proposed plan?
If approved as originally proposed, creditors would recover approximately 0.028% of their admitted claims, a haircut of roughly 99.97%.

8. Who are the members of the new five-member NCLT bench?
Justice (retd) Anupinder Singh Grewal (President), Judicial Members Bachu Venkat Balaram Das and Mahendra Khandelwal, and Technical Members Atul Chaturvedi and Ravindra Chaturvedi.

9. What is Section 95 of the Insolvency and Bankruptcy Code?
It's the provision governing personal guarantor insolvency, allowing creditors to initiate insolvency proceedings against individuals who have personally guaranteed corporate loans.

10. When will the five-member bench hear the case?
The special bench is scheduled to hear the matter at 10:15 AM on September 1, the same day as the related NCLAT appeal.

Conclusion

What briefly looked like a resolved, if controversial, settlement in one of India's highest-profile personal insolvency cases has instead turned into a genuinely unprecedented procedural episode, with the NCLT convening its first-ever five-member bench to determine whether Subhash Chandra's steeply discounted repayment plan can stand at all. With a parallel appeal underway at the NCLAT and both matters set for hearing on the same day, September 1 is shaping up to be a pivotal date in a case that has already tested the limits of how India's insolvency tribunal system handles genuine institutional deadlock.

Key Takeaways

• The NCLT has formed an unprecedented five-member bench to decide Subhash Chandra's personal insolvency case after the original bench found no valid majority opinion existed.
• Chandra's proposed repayment plan offers ₹6.25 crore against admitted claims of roughly ₹22,006.57 crore, a haircut of approximately 99.97%.
• The case originated from a ₹170 crore loan to Vivek Infracon, personally guaranteed by Chandra, which turned bad and prompted Indiabulls Housing Finance to initiate proceedings in 2022.
• LIC Housing Finance has separately challenged the case's prior ruling at the NCLAT, with both matters scheduled for hearing on September 1.
• The plan has not been formally approved despite earlier reports suggesting it had been, pending the five-member bench's decision.