The National Company Law Tribunal (NCLT) has approved media baron Subhash Chandra’s personal insolvency resolution plan, allowing him to settle Rs 22,006.57 crore in debt claims with a payout of just Rs 6.5 crore. The approval forces lenders to accept a massive 99.97% haircut on their outstanding dues. NCLT judicial member Nilesh Sharma gave the green light under Section 114 of the Insolvency and Bankruptcy Code (IBC).
Third Member Breaks Deadlock
The NCLT bench was initially split on the matter. A two-member panel had delivered conflicting opinions, prompting the tribunal chairman to appoint Nilesh Sharma as the third member. Sharma rejected objections from lenders who called the proposed recovery woefully inadequate. He ruled the plan valid and cleared it for implementation.
LIC Housing Finance Led Opposition
A group of lenders led by LIC Housing Finance opposed the plan, calling it impractical and unlawful. LIC Housing Finance had a claim of Rs 1,322.39 crore but was offered only Rs 38,09,294 in the settlement. That amounts to just 0.028% of its total claim. Dissenting lenders argued that even the proposed Rs 6.5 crore payout was described as indicative, not fixed.
Over 80% Creditors Backed the Plan
The NCLT noted that opposing lenders held less than 20% of total voting rights. The resolution plan secured support from 80.81% of creditors. The tribunal said its role is supervisory and judicial, not to replace creditors’ commercial judgment. It stressed that the plan was not required to be tested for adequacy of settlement amounts.
Plan Binding on All Creditors
The NCLT made it clear that under Section 115 of the IBC, the approved plan is binding on all creditors regardless of whether they voted in favor or against it. Allowing dissenting lenders to step outside the plan and pursue full recovery would weaken the legal framework and create unequal treatment among creditors. The tribunal expressed optimism that the approval would improve Chandra’s financial position and offer better recovery prospects for creditors who disagree.
