{
  "type": "article",
  "title": "NCLT Approves Settlement of Subhash Chandra's 22006 Crore Debt for 6.5 Crore, Lenders Face 99.97 Percent Loss",
  "summary": "The NCLT has approved a resolution plan settling Subhash Chandra's debt of over 22,006.57 crore rupees for just 6.5 crore rupees, forcing lenders to accept a 99.97 percent haircut.",
  "content": "The National Company Law Tribunal has cleared a resolution proposal in the personal insolvency case of media businessman Subhash Chandra, allowing the settlement of debt exceeding 22,006.57 crore rupees for a payment of just 6.5 crore rupees. This approval means lending institutions will have to absorb a staggering haircut of nearly 99.97 percent on their admitted claims. The tribunal's decision arrives shortly after the Supreme Court cautioned against banks taking massive haircuts that jeopardize public money, emphasizing that financial institutions must exhaust every avenue to recover outstanding dues from corporate borrowers.\n\nNCLT Third Member Ruling and Bench Proceedings\nJudicial member Nilesh Sharma, acting as the third member of the tribunal, passed the order on Tuesday under Section 114 of the Insolvency and Bankruptcy Code. The ruling dismissed the objections raised by dissenting creditors who argued that the recovery amount was unreasonably small. The matter had been referred to Nilesh Sharma by the NCLT President after the initial two-member bench delivered a split verdict due to differing opinions. Following this third-member decision, the case will now return to the original two-member bench to issue a formal order based on the majority view under Section 419(5) of the Companies Act, 2013.\n\nObjections Raised by LIC Housing Finance and Dissenting Lenders\nA consortium of creditors led by LIC Housing Finance strongly opposed the repayment plan, labeling it illegal and impractical. Highlighting the stark gap between the debt and recovery offer, dissenting lenders pointed out that against total admitted claims of 22,006.57 crore rupees, the plan offered lenders only 6.25 crore rupees towards debt settlement alongside 25 lakh rupees to cover insolvency resolution process costs. In the case of LIC Housing Finance, its approved claim stood at 1,322.39 crore rupees, yet the proposed payout was merely 38,09,294 rupees, which translates to a meager 0.028 percent of its total claim. Furthermore, objecting financial institutions noted that the 6.5 crore rupee offer was described as indicative rather than definitive, rendering the proposed resolution tentative and uncertain.\n\nVoting Breakdown and Majority Creditor Support\nOverriding the objections of the dissenting lenders, the tribunal emphasized the voting distribution among creditors. According to NCLT records, the objecting creditors collectively held less than 20 percent of the voting rights. In contrast, the settlement proposal submitted by Subhash Chandra secured the approval of 80.81 percent of the voting creditors. Because the statutory voting threshold under the Insolvency and Bankruptcy Code was met by a significant majority, the tribunal permitted the settlement process to move forward despite minority opposition.\n\nDetailed 144-Page Order and Valuation Findings\nIn his comprehensive 144-page order, judicial member Nilesh Sharma detailed the rationale behind approving the settlement. The order referenced the assessment of the resolution professional, which found that the total value of Subhash Chandra's personal assets was significantly lower than even the proposed 6.5 crore rupee payout. Consequently, rejecting the settlement scheme was unlikely to yield any higher recovery for the dissenting creditors. The tribunal also noted that approving the plan could stabilize Chandra's financial position, potentially improving the chances for dissenting lenders to achieve direct recovery from his primary obligors in the future.\n\nWhat this means for you\n• Across India: Accepting a 99.97 percent haircut on major corporate debts raises critical questions regarding the banking sector's recovery framework.\n• For Taxpayers and Depositors: Substantial write-offs by public and private lenders impact overall banking resilience and the stewardship of public funds.\n\nQuestions & Answers\n\n1. Which insolvency case involves the 99.97 percent haircut approved by the NCLT?\nThe NCLT approved a resolution plan under the personal insolvency resolution process of media businessman Subhash Chandra for debt exceeding 22,006.57 crore rupees.\n\n2. How much will be paid to clear the total outstanding debt?\nAgainst total admitted claims of 22,006.57 crore rupees, a payout of just 6.5 crore rupees (6.25 crore for debt and 25 lakh for resolution costs) will be made.\n\n3. What recovery amount will LIC Housing Finance receive?\nAgainst its admitted claim of 1,322.39 crore rupees, LIC Housing Finance is set to receive only 38,09,294 rupees, representing 0.028 percent of its claim.\n\n4. Why did the NCLT third member approve this settlement plan?\nThe resolution professional assessed Subhash Chandra's personal assets below 6.5 crore rupees, and 80.81 percent of voting creditors supported the scheme.",
  "url": "https://trendkia.com/en/business/subhash-chandra-ke-22-006-karora-ke-karja-ka-sirpha-6-5-karora-men-nipatara-nclt-ne-di-mnjuri-22715",
  "category": "Business",
  "publishedAt": "2026-08-26",
  "tags": [
    "Subhash Chandra",
    "NCLT",
    "Insolvency Resolution",
    "Loan Haircut",
    "IBC",
    "LIC Housing Finance"
  ],
  "language": "en",
  "site": "TrendKia"
}