NCLT Approves ₹6.5-Crore Repayment Plan Of Subhash Chandra

The National Company Law Tribunal (NCLT) has approved Dr Subhash Chandra’s proposed repayment plan under which creditors will get a mere ₹6.5 crore against admitted claims of ₹22,006.57 crore as part of his personal insolvency resolution process.

The approval ends a long-standing split within the tribunal. The original two-member bench had ruled differently on the issue in September 2025 and therefore, in February 2026, the NCLT President had referred the matter to a third member, Nilesh Sharma. Sharma's ruling has now tilted the outcome decisively in favour of the plan.

How Creditors Voted

The repayment proposal was not new to creditors when the tribunal took it up. It had already got the nod of a creditors' meeting in November 2024, securing the consent of 80.814%, well above the three-fourths threshold required under the Insolvency and Bankruptcy Code.

A smaller bloc, comprising LIC Housing, HDFC Bank, Axis Bank, Canara Bank, RBL Bank, IDBI Trusteeship acting for Franklin Templeton Fund, and Union Bank, voted against the plan but collectively held less than a fifth of the voting share. Because the plan crossed the statutory threshold, Section 115 of the Code makes the plan binding on every creditor, including those who opposed it.

The tribunal said dissenting lenders were unlikely to do better by blocking the plan, saying the resolution professional’s valuation placed Chandra’s estate well below the amount being offered.

Why The Tribunal Rejected The Objections

The tribunal had heard multiple concerns raised by dissenting creditors during the proceedings, none of which it accepted. One argument centred on whether entities linked to Chandra had improperly influenced the creditors' vote.

The tribunal disagreed, ruling that the entities named did not satisfy the statutory test for an "associate" under Section 79(2)(g) of the Code, and declined to stretch that definition through a broader interpretation.

A second objection focused on the wide gap between Chandra's declared net worth in earlier years—₹45,888 crore in a 2017 certificate submitted to RBL Bank and ₹40,562 crore in a 2018 certificate submitted to Canara Bank—and his current disclosed net worth of around ₹31.79 crore.

According to the tribunal, this disparity alone did not amount to proof of asset concealment or diversion, nor did it make a forensic audit compulsory before a repayment plan could be approved under the law.

One Change To The Creditor List

The tribunal did make one adjustment before approving the plan. The RP has been directed to distribute the repayment amount among the remaining eligible claimants after excluding claims filed on behalf of 1,260 persons by Anil Kumar and Sunil Jain from the final list of creditors. As a matter of procedure, the issue is now back with the original two-member bench which will pass a formal order reflecting the majority view under Section 419(5) of the Companies Act, 2013.

Background To The Case

The case dates back to 2022, when Indiabulls Housing Finance filed an application under Section 95 of the Code to initiate insolvency proceedings against Chandra as personal guarantor. The case was held in abeyance for a period following an interim order from the Supreme Court, and moved forward only after the stay was lifted, with the NCLT formally admitting Chandra into the personal insolvency resolution process in April 2024.

Vijay Mallya Weighs In

The ruling drew a public reaction from businessman Vijay Mallya, who has lived outside India since 2016 amid unresolved loan disputes with a consortium of Indian banks tied to Kingfisher Airlines. Commenting on the outcome, Mallya suggested it reflected a broader pattern of large borrowers settling for a small fraction of what they owed, drawing a parallel with recoveries made against his own judgment debt.

Also Read - Closing Bell, 27 August 2026: Sensex, Nifty Close In The Negative