₹22,000 Cr Debt Deal: Subhash Chandra Case Gets Major NCLT Review!

A significant development has emerged in the high-profile insolvency case of Essel Group founder Subhash Chandra, involving a staggering ₹22,000 crore in admitted claims. The National Company Law Tribunal (NCLT) had initially approved a repayment plan on August 25, proposing a mere ₹6.25 crore for creditors and an additional ₹25 lakh for insolvency resolution costs.

This amounted to an astonishing 0.03% recovery rate, effectively a 99.97% "haircut" for the lenders.

This decision sparked immediate strong opposition from several creditors, including major players like HDFC Bank and Indiabulls Housing Finance.

They argued vehemently against the meager recovery, especially given the enormity of the debt.

The core of the dispute often revolves around the interpretation of Section 79(2)(g) of the Insolvency and Bankruptcy Code (IBC) and the personal guarantee Mr.

Chandra provided for a ₹170-crore loan to Vivek Infracon Private Limited.

In a crucial turn of events, the repayment plan was stayed as of September 1, indicating a temporary halt to its implementation. Adding further weight to the matter, the NCLT has taken the unprecedented step of constituting its first-ever 5-member bench to deliberate on Mr. Chandra's repayment plan.

This extraordinary measure was necessitated after a division bench previously failed to reach a majority verdict, highlighting the complexity and contentious nature of the case.

Solicitor General Tushar Mehta has also voiced concerns, asserting that the earlier ruling could undermine the fundamental principles of the Insolvency and Bankruptcy Code. The formation of this special bench signals a thorough re-examination of the terms, offering a glimmer of hope for creditors seeking a more equitable resolution.

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