Explained | Subhash Chandra And The Rs 22,006-crore NCLT Controversy
Why there is more to the story than the headline that a debt of over Rs 22,000 crore was settled for Rs 6.5 crore
By R Srinivasan
Published : September 2, 2026 at 6:36 PM IST
What is the case all about?
It all began in December of 2016, Indiabulls Housing Finance extended a loan of Rs 170 crore to Vivek Infracon Pvt Ltd, a company associated with Zee and Essel promoter Subhash Chandra. This was the first of several loans and facilities extended to Vivek Infracon and related borrowers. Eventually, the amount rose to Rs 726 crore.
Subhash Chandra gave a personal guarantee on December 5, 2018. As per NCLT's April 22, 2024 order, the guarantee committed Subhash Chandra to pay up to Rs 726 crore if the principal borrowers defaulted.
In January 2022, Indiabulls invoked the guarantee and demanded approximately Rs 178.79 crore from Subhash Chandra against his personal guarantee.
When payment failed to materialise, Indiabulls filed an application under the Insolvency and Bankruptcy Code seeking initiation of insolvency proceedings against Subhash Chandra as a personal guarantor. The NCLT then appointed a Resolution Professional (RP) in May 2022.
How did the original Rs 170 crore turn into Rs 22,006 crore?
Subhash Chandra did not borrow the entire amount himself. However, he had extended several other similar personal guarantees against loans taken out by various entities connected to him and the Essel Group.
Over time, these other creditors joined the Indiabulls insolvency case. The sum of the claims made by various creditors to various defaulting Essel Group companies, which eventually devolved on Subhash Chandra due to his personal guarantee, amounted to over Rs 22,006 crore.
Consequently, the Indiabulls petition eventually became a collective personal-guarantor proceeding.
What is Subhash Chandra’s claim?
Chandra claims the Rs 22,006 crore figure is wrong, as the resolution professional appointed by NCLT rejected some claims, bringing the actual admitted claims to Rs 21,696 crore.
Of this, Rs 1,494 crore were offered to be repaid by many of the borrowing companies, who remain principally liable for the loan.
He also claims that the relevant amount should be considered as only Rs 3,992 crore, which was the total claims of creditors who had voted against the repayment plan suggested by him(You can read more on that here). Of this, he claimed that a further Rs 620 crore had been settled.
So what was the repayment plan?
The proposal provided for: Subhash Chandra to pay Rs 6.25 crore from his personal net worth, plus Rs 25 lakh towards insolvency-process costs, which adds up to Rs 6.5 crore.
There was also a separate proposal for approximately Rs 1,494 crore to be paid by the principal borrowing companies.
What happened?
The plan was put to vote by creditors to be approved or rejected. Of the total eligible voting share, 77.48% voted in favour, 18.42% voted against and creditors representing 4.10% – mainly trusts of mutual funds – abstained. The abstention was excluded from votes cast, hence the result became 80.814% voting for and 19.186% voting against.
Why did this create a controversy?
There were three controversies surrounding the vote.
The biggest issue was the smallness of the recovery. Rs 6.25 crore against over over Rs 22,000 crore meant a recovery of just 0.028%.
The second was the voting itself. The objecting lenders – banks and financial institutions which voted against the plan – argued that a majority of the votes favouring the plan were cast by entities associated with, or related to Subhash Chandra, and therefore, should not have been allowed to vote at all.
These entities are:
Veena Investments Pvt Ltd
Direct Media Distribution Ventures Pvt Ltd
World Crest Advisors LLP
Lemonade Capital Advisors LLP
Corpcall Capital Advisors LLP
According to the objecting creditors, these entities collectively accounted for approximately 61.78% of the votes cast in favour of Subhash Chandra's plan.
The third was the minute net worth reported by Subhash Chandra himself. Some of the lenders produced net worth certificates from 2017 and 2018 – when the loans were extended, which cited the entrepreneur’s net worth at approximately Rs 45,888 crore and Rs 40,562 crore respectively.
What was Subhash Chandra’s defence?
He argued that the entities were not related parties since they were transferred to his brother Jawahar Goyal in 2008 under a family business settlement.
Further, he argued that the net worth figures represented the worth of group business holdings and not his personal wealth. He submitted his wealth declaration to Parliament in 2016, which put his personal wealth at Rs 39.08 crore.
What did NCLT do?
The NCLT appointed a two member bench to decide. The members reached fundamentally materially different conclusions. Technical Member Reena Sinha Puri rejected the repayment plan. Judicial Member Ashok Kumar Bhardwaj approved it, but held that dissenting banks and financial institutions could continue their recovery efforts. Their initial claims were not extinguished by the settlement.
The third opinion
Since the two member bench did not agree, the matter was referred to a third member Nilesh Sharma. On August 25, 2026, Sharma approved the plan under Section 114 of the Insolvency and Bankruptcy Code.
Controversy erupts
The order created a media sensation given the minute recovery against the large amount claimed. As a result, the NCLT President, Justice (retd) Anupinder Singh Grewa, appointed a five member bench to examine the issue. Since the three members did not produce a single, clear, majority opinion on the matter, as a first step, the 5-member bench has stayed the order. The next hearing is scheduled for September 23, 2026.
The story does not end here
The dissenting creditors have challenged Sharma’s order before the appellate body, the National Company Law Appellate Tribunal (NCLAT). So the issue will now proceed on two tracks – the NCLT 5-member bench review of the August 25 Sharma order, and the NCLAT challenge.
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