Subhash Chandra's Repayment Plan Nears NCLT Approval

Subhash Chandra's repayment plan is nearing approval from the National Company Law Tribunal (NCLT), with creditors facing a potential recovery of only three paise for every ₹100 claimed. The plan, which was voted on by creditors in November 2024, secured 80.814 percent of the voting share, crossing the required majority.

The repayment plan offers only ₹6.5 crore, including ₹25 lakh towards insolvency costs, against claims worth ₹22,006.57 crore accepted by creditors. This means that nearly 99.97 percent of their dues may remain unpaid, a situation referred to as a haircut in insolvency cases.

The plan was opposed by several major lenders, including Axis Bank, Canara Bank, HDFC Bank, LIC Housing Finance, RBL Bank, and Union Bank, as well as IDBI Trusteeship on behalf of Franklin Templeton Fund. However, their combined voting share was below 20 percent, allowing the plan to move forward.

In September 2025, the judicial and technical members of the original NCLT bench delivered differing opinions on the plan, with the matter being referred to a third member, Nilesh Sharma. Sharma rejected objections concerning the voting process and allegations that entities linked to Chandra had influenced the result, paving the way for approval.

The tribunal also noted that Chandra's net worth had fallen significantly, from around ₹45,888 crore in 2017 to nearly ₹31.79 crore. However, it stated that this comparison alone could not prove that assets were hidden or diverted, and that evidence would be needed to support such claims.

The NCLT also ruled that a forensic audit was not compulsory before approving the repayment plan. The case began in 2022, when Indiabulls Housing Finance, now Sammaan Capital, initiated proceedings over a ₹170 crore loan to Vivek Infracon that Chandra had personally guaranteed.

The matter will now return to the original bench for a formal order, with claims filed by Anil Kumar and Sunil Jain for 1,260 people remaining unclear. The total value and future treatment of these claims are still unknown.

The approval of Chandra's repayment plan has significant implications for creditors, who may be left with substantial unpaid dues. The plan's approval also highlights the challenges faced by lenders in recovering debts from large corporate borrowers.

In the context of India's insolvency and bankruptcy code, the approval of Chandra's repayment plan is a significant development. The code, which was introduced in 2016, aims to provide a framework for resolving corporate insolvencies in a timely and efficient manner.

The case also raises questions about the effectiveness of the insolvency and bankruptcy code in ensuring that creditors receive a fair recovery. With creditors facing a potential recovery of only three paise per ₹100, the case highlights the need for further reforms to the code to ensure that lenders are protected.

Overall, the approval of Chandra's repayment plan is a significant development in the context of India's corporate insolvency landscape. The plan's approval has significant implications for creditors and highlights the need for further reforms to the insolvency and bankruptcy code.

The NCLT's decision is expected to have a significant impact on the corporate debt market, with lenders likely to reassess their lending strategies in light of the potential for low recoveries. The decision also highlights the importance of due diligence and credit assessment in lending decisions.

In conclusion, the approval of Subhash Chandra's repayment plan is a significant development in the context of India's corporate insolvency landscape. The plan's approval has significant implications for creditors and highlights the need for further reforms to the insolvency and bankruptcy code.