Explainer: NCLT approval to Subhash Chandra’s repayment plan of Rs 6.5 crore against Rs 22,000 crore debt

A judicial member of the National Company Law Tribunal, Nilesh Sharma, gave his opinion on 25 August 2026 that Subhash Chandra’s offer of ₹6.5 crore to settle personal guarantee claims should be accepted. Objecting lenders put the claims against him at around ₹22,006.57 crore.

Q. Why did a single member decide this and not a bench?

Because the two-member bench hearing the case could not agree. On 3 September 2025, judicial member Ashok Kumar Bhardwaj held the offer should be approved. Technical member Reena Sinha Puri held it should be rejected and that lenders were free to move for bankruptcy. When members split, the NCLT president can send the disagreement to a third member. That reference was made on 9 February 2026.

Q. So is the settlement now final?

No. Sharma’s opinion tips the count in favour of approval, but he has sent the file back to the original bench, which has to pass the actual order. Until that happens, nothing is formally approved.

Q. How did the case start?

Indiabulls Housing Finance went to the tribunal in 2022 to recover money from Chandra as a guarantor. A resolution professional, Raj Kamal Saraogi, was appointed on 30 May 2022, but the case stalled after the Supreme Court passed an interim order that August. The court lifted it in April 2024, the case was admitted, and Shiv Nandan Sharma took over as resolution professional in May 2024. He then asked the tribunal to approve the repayment offer Chandra had put forward.

Q. What exactly is on offer?

₹6.5 crore in total — ₹6.25 crore for lenders, ₹25 lakh for the cost of running the process.

Q. Why did the tribunal agree on ₹6.25 crore repayment plan?

Chandra’s side argued that his personal estate had very limited value and that he had offered virtually everything available to him. The repayment plan proposed using the proceeds from the sale of his few assets and deposits to generate Rs 6.5 crore, with his side maintaining that the amount represented everything available to him for repayment. It argued that rejection of the plan would push him into bankruptcy without giving creditors a better recovery prospect.

Q. What does that work out to for an individual lender?

LIC Housing Finance, owed ₹1,322.39 crore, told the tribunal its share came to ₹38,09,294. That is about 0.028 per cent of what it is owed. It also complained that even this amount was described in the plan as only indicative, not guaranteed.

Q. Why do lenders think Chandra can pay more?

Because of what he has told banks before. A certificate given to RBL Bank in 2017 put his net worth at USD 7.17 billion, roughly ₹45,888 crore. Another, given to Canara Bank in 2018, put it at ₹40,562 crore. He now says he is worth about ₹31.79 crore. Lenders wanted a forensic auditor and an asset-tracing agency appointed to explain the gap.

Q. Did the tribunal order that investigation?

No. Sharma accepted the gap was large enough to justify asking questions, but held that the old certificates by themselves do not prove assets were hidden or moved, and that the law does not require a forensic audit before a settlement offer can be considered. He also pointed out that a resolution professional in this type of case has no power to investigate on his own, and that no lender put forward actual evidence of concealment.

Q. The plan got 80.814 per cent approval. What was the objection to that?

Lenders argued most of the support came from Chandra’s own associates. The disputed voters were World Crest Advisors at 28.49 per cent, Lemonade Capital Advisors at 16.85 per cent, Corpcall Capital Advisors at 10.30 per cent, Veena Investments at 4.99 per cent and Direct Media Distribution Ventures at 1.15 per cent.

Q. How did the tribunal deal with that?

It applied the statutory test literally. Broadly, someone is an associate if the debtor owns more than half the shares or controls the board. Chandra does not meet that test for any of these firms. Sharma also refused to rely on two SEBI orders from 2023 that lenders had cited as proof of control, because the Securities Appellate Tribunal had set them aside.

Q. Did lenders win anything?

One point. Claims filed by two men — Anil Kumar on behalf of 960 people and Sunil Jain on behalf of 300 — were admitted with no supporting paperwork, on Chandra’s word alone. Sharma called this a failure by the resolution professional and ordered both, and everyone they represented, removed from the creditor list. Their share of the money goes to the remaining lenders.

Q. There were also complaints about the process being rushed. What came of them?

Chandra submitted his offer on 16 October 2024, the resolution professional filed his report the next day, the creditors’ meeting was held on 24 October, and voting closed on the morning of 1 November. The technical member had found this broke the fourteen-day notice requirements. Sharma disagreed, noting the lenders had themselves voted to cut the notice period to five days, voting stayed open longer than the minimum required, and everyone but a small slice of the creditor group took part. He did refuse to excuse the resolution professional’s failure to record lenders’ objections in his final report as promised, but held it did not sink the plan since the tribunal heard those objections anyway.

Q. What about STCI Finance?

STCI lent ₹250 crore in 2018 to two companies linked to Chandra and wanted to be treated as a secured creditor. Sharma held Chandra had only mortgaged a flat at Jolly Maker I in Cuffe Parade, Mumbai, and never signed a personal guarantee, so STCI has no claim against him personally. It keeps its right to sell the flat and recover its dues.

Q. And the ₹1,260-crore Delhi property?

Canara Bank came in after the case was reserved, citing news reports that a property in Lutyens’ Delhi had sold for about that amount, and asked for the money to be frozen. Chandra replied that 4, Bhagwan Das Road is not his — it belongs to Greatway Estates and is mortgaged to JC Flowers — and that he had disclosed the arrangement in his plan, which envisaged sale proceeds paying ₹774 crore to JC Flowers and clearing a claim of ₹6,182 crore. Sharma held a newspaper report with nothing behind it cannot be the basis for an investigation, and dismissed the application.

Q. What happens to lenders who voted against?

They are bound by the settlement anyway, and cannot separately chase Chandra for the full amount.

Q. Is there any way back for them?

One. If it later emerges that Chandra fraudulently concealed material assets, lenders can ask the tribunal to recall its order.

Q. What is Subash Chandra’s response to all the hue and cry

Subhash Chandra issued a press release from his office in Mumbai on August 27, 2026, saying media reports over the preceding two days had selectively reported the matter and urging platforms to remove what he called misinformation drawn from an incorrect reading of the order. He said the judge’s opinion is yet to be converted into a formal order and the matter is technically still pending before the NCLT, and that the matter has been pending since February 8, 2022.

Chandra said he has not personally borrowed from any lender named in the order and is only a personal guarantor, with most guarantees signed after January 24, 2019 — the date of the group’s default — at the request of lenders. Total guarantees signed were approximately Rs 22,000 crore. Claims filed in the proceeding totalled Rs 22,006 crore, of which Rs 21,696 crore was admitted. The repayment plan was approved by 80.814 per cent of creditors. Objecting creditors account for 19.251 per cent of claims and had filed claims of Rs 3,992 crore, of which Rs 620 crore has been settled, leaving Rs 3,372 crore. Lenders who did not object filed claims of Rs 16,386 crore, of which Rs 16,201 crore was admitted. Against the objectors’ claims, the borrowing entities say Rs 2,856 crore was released and Rs 1,633 crore repaid, leaving Rs 1,223 crore. Companies for which Chandra gave guarantees owed close to Rs 45,000 crore on January 24, 2019 and have since repaid close to Rs 43,000 crore. On net worth, Chandra said a lender’s figure of Rs 45,888 crore for 2017 was arrived at by attributing the entire market capitalisation of Essel Group entities to him, against assets of Rs 39.08 crore declared in his 2016 parliamentary filing and Rs 31.79 crore filed with the resolution professional, including a residential house worth about Rs 25 crore — the basis for the Rs 6.5 crore repayment plan.

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