New Delhi (TIP): In a major relief to media baron Subhash Chandra, the National Company Law Tribunal (NCLT) has approved a repayment plan under which he will shell out just Rs 6.5 crore to settle admitted creditor claims of over Rs 22,006 crore in his personal insolvency resolution process.
The settlement, translating into a haircut of nearly 99.97 per cent (nearly nearly Rs 22,000 crore) for lenders, meant that various creditors can recover only 0.028% of their origin claims Chandra — founder of Essel Group — under a repayment plan backed by a majority of the NCLT.
Under the repayment plan approved by the NCLT, Rs 6.25 crore is proposed for creditors while Rs 25 lakh is meant for process costs. The amount of Rs 6.25 crore is based on his low personal asset value and net worth.
In fact, the amount of Rs 22,006.57 crore represented claims admitted against Chandra as a personal guarantor for loans taken by Essel Group companies. However, Chandra said he was only a personal guarantor and the total claim against him as a personal guarantor in the personal insolvency proceedings was only Rs 3,992 crore by the objectors of the plan and not Rs 22,000 crore.
Chandra has been embroiled in insolvency proceedings filed by Indiabulls Housing Finance Limited — now known as Sammaan Capital — since 2022. Chandra stood as personal guarantor for a Rs 170 crore loan given to Vivek Infracon. Indiabulls approached the NCLT in 2022 under Section 95 of the Insolvency and Bankruptcy Code (IBC) for proceedings against Chandra after the loan turned bad. Similarly, other banks and financial institutions had also moved the NCLT.
Section 95 of the IBC allows a creditor to move the NCLT to initiate an insolvency resolution process against a personal guarantor or an individual debtor.
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