The National Company Law Tribunal (NCLT) has approved a settlement that allows media baron Subhash Chandra to resolve claims totaling more than Rs 22,006.57 crore by paying only Rs 6.5 crore, amounting to a recovery of about 0.03% of the dues owed to creditors.
The directive was issued by Nilesh Sharma, the third judicial member on the insolvency bench, who ruled on a repayment plan submitted in relation to a personal insolvency proceeding initiated by Indiabulls Housing Finance.
Chandra had served as a personal guarantor for loans granted to companies within the Essel Group.
Notably, creditors had staked claims totalling Rs 22,006.57 crore against Chandra. However, only Rs 6.5 crore was offered based on his declared personal assets and estate and Rs 25 lakh towards process costs, which means a haircut of nearly 99.97% for lenders.
Sharma is said to have dismissed objections raised by LIC Housing Finance, which described the proposed payment as both unviable and unlawful.
Regarding LICHFL, whose admitted claim amounted to Rs 1,322.39 crore, the proposed repayment was only Rs 38,09,294—roughly 0.028 per cent of the acknowledged dues.
The NCLT order noted that such a minimal repayment could not be approved by the tribunal.
According to reports, the tribunal granted approval after creditors representing 80.814% of the voting share backed the plan, and the Resolution Professional determined that this figure reflected the genuinely recoverable value from the guarantor’s disclosed assets.
The amount will also be redistributed among the remaining eligible creditors, as laid out under the approved plan after the Original Division Bench issues a formal orders reflecting the majority view.
The insolvency case traces back to 2022, when Indiabulls Housing Finance moved against Chandra over a Rs 170-crore loan extended to Vivek Infracon, a loan he had personally guaranteed, and one that eventually turned bad.
Reacting to the development, businessman Vijay Mallya wrote on X, “If true many congratulations to my friend Subhash. Banks and government have admitted having recovered Rs 14,100 crores from me against a Judgement debt of Rs 6203 crores. Many more borrowers have settled at a fraction. Indian Debt Resolution Justice I presume. No media questions.”
Meanwhile netizens too reacted on NCLT ruling in Subash Chandra case on social media platform, with many sharing their debt relationship with financial institutions.
A instagram user posted his reactions by writing, "par agar mein mere bike ki EMI ek mahine late kardu toh bank wale meri maa aur mere behen ke reproductive organs ke existence Ko mujhe remind karana shuru kar denge, ("But if I delay my bike EMI by even a single month, the bank guys will start reminding me about the existence of my mother's and sister's reproductive organs.")
The NCLT ruling also triggered mixed reactions on X, with users expressing both surprise and concern over the growing debt burden on the middle class.
A user wrote that middle class is worried about its CIBIL score. Meanwhile, Subash Chandra's Rs 22, 006 Cr loan is settled for just Rs 6.5 Cr. 99.75% haircut. Welcome to the system.
An user shared his experience on financing his loan from LIC housing finance to buy a flat. If you are a salaried middle-class guy, trust me, no one is coming to save you.
Similarly another user wrote, With a 99.97% haircut on outstanding dues of ₹22,000 crore, Subhash Chandra is the man of the moment. The middle class should understand that small-ticket loans do not create such opportunities to make money.
Congress MP Jairam Ramesh strongly criticized the NCLT verdict, describing it as “a mundan (tonsure)” and not just “haircut”.
In finance terminology, when creditors are owed money and the debtor repays only part of it, the difference expressed as a percentage is called a haircut. The National Company Law Tribunal has just approved a repayment plan of a noted businessman under which creditors will receive only Rs 6.5 crores against admitted claims of around Rs 22,006.57 crore. This is not just a haircut. It is actually a mundan and makes a complete mockery of the Insolvency and Bankruptcy Code, 2016.