The National Company Law Tribunal has approved a repayment plan for businessman and Zee Group founder Subhash Chandra under his personal insolvency resolution process. Under the approved plan, creditors will receive Rs 6.5 crore against admitted claims of approximately Rs 22,006.57 crore.
The decision has attracted significant political and financial attention because of the exceptionally large difference between the admitted claims and the amount proposed for repayment. Based on the figures cited in the NCLT proceedings, the recovery works out to roughly 0.03 percent of the admitted claims, resulting in a haircut of nearly 99.97 percent for lenders.
NCLT approves repayment plan
The repayment plan was approved by NCLT Member Judicial Nilesh Sharma, who was appointed as the third member after the original two-member bench delivered a split verdict.
The approval was made under Section 114 of the Insolvency and Bankruptcy Code. The tribunal rejected objections from creditors who argued that the proposed recovery was too low to justify approval.
The NCLT proceedings relate to Chandra’s personal insolvency case. The matter originated from a personal guarantee given by Chandra in connection with a loan extended to Vivek Infracon. After the loan account turned problematic, insolvency proceedings were initiated against him.
The Insolvency and Bankruptcy Board of India’s records also list the case as involving Indiabulls Housing Finance Limited and Dr Subhash Chandra, with an order dated August 25, 2026, concerning approval of a repayment plan in a personal guarantor case.
Huge difference between claims and repayment
The most significant aspect of the case is the difference between the admitted creditor claims and the amount to be paid under the plan.
Creditors have admitted claims of around Rs 22,006.57 crore, while the repayment plan provides Rs 6.25 crore to creditors and Rs 25 lakh towards process costs, taking the overall amount to Rs 6.5 crore.
This means that the amount available for creditors represents only a very small proportion of the total admitted claims.
In financial terminology, the percentage of a debt that creditors do not recover under a restructuring or resolution is commonly referred to as a haircut. In this case, the reported haircut is approximately 99.97 percent.
Creditors raised objections
The repayment proposal was not unanimously supported by creditors.
LIC Housing Finance was among the lenders that opposed the plan. It argued that the proposed recovery was too small and questioned the viability and legality of the repayment arrangement.
According to the proceedings, LIC Housing Finance had an admitted claim of approximately Rs 1,322.39 crore. The amount proposed for repayment to the lender was around Rs 38.09 lakh, representing only about 0.028 percent of its admitted claim.
The lender also raised concerns over the nature of the proposed amount and argued that the plan was not sufficiently certain.
Despite these objections, the tribunal proceeded with approval of the plan.
Role of the third NCLT member
The case reached the third member because the original NCLT bench had delivered differing views on the repayment proposal.
Nilesh Sharma was subsequently brought in to resolve the difference of opinion. He approved the plan after considering the objections raised by the dissenting creditors.
The tribunal noted that the creditors opposing the plan together represented less than 20 percent of the voting share, while the plan had received approval from creditors representing approximately 80.81 percent of the voting share.
The decision illustrates the importance of the voting position of creditors in insolvency resolution proceedings.
Congress criticises the decision
The NCLT decision has also triggered a political response from the Congress party.
Congress leader Jairam Ramesh criticised the size of the repayment compared with the admitted claims. He used the term “mundan” rather than “haircut” to describe the scale of the reduction and alleged that the decision undermines the Insolvency and Bankruptcy Code.
The Congress has questioned whether such a substantial reduction in the amount payable to creditors is consistent with the objectives of the insolvency framework. These comments represent the party’s political criticism of the tribunal’s decision.
There was no immediate public response from Subhash Chandra or his group to the Congress criticism, according to reports published on Thursday.
What is the Insolvency and Bankruptcy Code?
The Insolvency and Bankruptcy Code was introduced to establish a time-bound framework for resolving insolvency and bankruptcy cases in India.
The process aims to balance the interests of creditors and debtors while seeking the most effective resolution of financial distress.
In an insolvency resolution, creditors may approve a repayment or restructuring plan if it meets the requirements of the law and receives the required voting support.
The Chandra case has attracted attention because the approved repayment amount is exceptionally small compared with the total admitted claims.
However, the tribunal's decision was based on the insolvency proceedings and the applicable legal framework rather than simply comparing the original debt with the proposed payment.
Background to the case
The insolvency proceedings against Chandra relate to a personal guarantee connected with a loan of around Rs 170 crore provided to Vivek Infracon.
Indiabulls Housing Finance, now known as Sammaan Capital, approached the NCLT in 2022. The insolvency petition against Chandra was admitted in 2024.
The case subsequently moved through the personal insolvency resolution process, eventually resulting in the repayment plan considered by the tribunal.
The proceedings involved several creditors and financial institutions with claims connected to the case.
Why the decision matters
The order is significant because personal insolvency cases involving large financial claims can have implications for lenders, guarantors and the broader credit system.
For lenders, the recovery rate is a critical consideration when extending credit. A very low recovery can result in substantial losses for financial institutions and their stakeholders.
At the same time, insolvency law is designed to provide a structured mechanism for dealing with cases where the available assets and repayment capacity may be significantly lower than the total claims.
The tribunal's decision therefore highlights the tension between maximising creditor recovery and approving a resolution based on the debtor's available financial position.
Next stage
The matter is expected to return to the original NCLT division bench for further formal proceedings following the third member's decision.
The tribunal's order is binding within the framework of the insolvency process, including on creditors who had opposed the repayment plan, subject to applicable legal remedies.
The case could continue to attract attention because of the unusually large gap between the admitted claims and the approved repayment amount.
For creditors, the key issue remains how much of the admitted dues can ultimately be recovered under the approved plan.
For the broader business community, the case is another example of how India's insolvency framework deals with large claims when the debtor's available assets and repayment capacity are considerably lower than the total liabilities.
The NCLT's approval does not mean that the entire Rs 22,006 crore debt has been repaid. Rather, the approved repayment plan provides for a much smaller payment to creditors under the personal insolvency resolution process.
The case is likely to remain a subject of discussion among lenders, insolvency professionals, legal experts and political parties because of the scale of the creditor haircut and the questions raised about the effectiveness of the insolvency resolution framework.