Subhash Chandra insolvency: Union Bank to challenge NCLT order approving ₹6.5-crore repayment plan
Union Bank of India (UK) will challenge the NCLT's approval of Subhash Chandra's ₹6.5-crore repayment plan against ₹22,006.57 crore in admitted claims. The NCLT's decision, allowing Chandra to settle claims for a fraction of the original amount, has faced strong opposition from various creditors. Canara Bank, which held a 1.60% voting share, had also voted against the plan and confirmed its intent to file an appeal before the National Company Law Appellate Tribunal. HDFC Bank is reportedly also weighing an appeal, while LIC Housing Finance plans to pursue principal borrowers in this complex insolvency case.
What this means
The challenge by Union Bank and other lenders highlights significant concerns over the fairness and transparency of the insolvency resolution process for personal guarantors under the IBC. The massive disparity between admitted claims and the approved repayment amount raises questions about asset valuation, the role of resolution professionals, and the protection of creditors' interests. A successful appeal could set new precedents for how personal guarantees of high-profile individuals are resolved.
Most affected: PSU Banks, Corporate Credit, IBC Framework
Key takeaway: Financial institutions must reinforce due diligence on personal guarantees and actively engage in insolvency proceedings to safeguard their interests, as judicial reviews of NCLT decisions can significantly alter recovery outcomes.
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