Law Tribunal Permits Subhash Chandra to Settle ₹2,200-Crore Debt Claims for ₹65 Crore

The National Company Law Tribunal has cleared a resolution plan allowing Essel Group promoter Subhash Chandra to settle personal guarantee claims worth ₹2,200.65 crore for just ₹65 crore.

The Mumbai bench of the NCLT approved the proposal under personal insolvency proceedings initiated against Chandra by public and private sector lenders. The decision brings down the curtain on a protracted legal battle over unpaid corporate loans backed by Chandra's personal guarantees.

Massive Haircut for Lenders

Under the approved terms, financial creditors face a massive haircut on their outstanding exposure. The ₹65-crore payout represents less than 3 per cent of the total validated claims submitted by financial institutions.

The debt obligations stem from credit facilities extended to various Essel Group entities during its rapid expansion drive across media, infrastructure, and financial services. When those companies defaulted on their repayment schedules, lenders invoked Chandra's personal guarantees to recover the dues.

Repayment Timeline and Next Steps

The resolution plan details a structured timeline for discharging the ₹65 crore. Chandra will make payments in installments to the debt resolution professional, who will then distribute the funds among creditors based on their voting share in the committee of creditors.

Legal experts tracking corporate insolvency note that the tribunal's order offers a precedent for resolving high-value personal guarantee cases involving prominent promoters. With the NCLT seal of approval in place, the resolution professional will execute the payout mechanism to formally close the insolvency proceedings.

Also read: SEBI Penalises ZEEL, Bars Punit Goenka and Subhash Chandra From Markets