Why Subhash Chandra's ₹6.5 Crore Repayment Plan for ₹22,006 Crore Debt Is on Hold

Subhash Chandra, founder of Essel and Zee Group, faced personal insolvency proceedings over guarantees he gave for large group loans. Creditors claimed he owed ₹22,006 crore, a sum that drew intense attention due to its scale and the public profile of the companies involved.

Chandra put forward a repayment plan offering just ₹6.5 crore to settle these claims. The National Company Law Tribunal (NCLT) initially approved this plan, which meant creditors would recover only about 0.03% of what they were owed, according to the Indian Express and NDTV India. This sparked immediate controversy, with critics highlighting the deep loss to banks and the apparent leniency towards a high-profile businessman.

On August 27, 2026, reports surfaced of the NCLT's approval of Chandra's proposal, with Indian Express and Mint detailing the extremely low recovery rate for creditors. The decision quickly drew criticism from political figures and the public. By August 28, HDFC Bank and LIC Housing Finance, both major creditors, announced their intent to appeal the ruling, arguing that their claims and Chandra's liabilities were not accurately reflected in the settlement, as reported by The Hindu and Indian Express.

Chandra's office issued clarifications, insisting he had not personally borrowed the money and that his role was limited to acting as guarantor for group companies. He also disputed the total debt figure, claiming the real amount was far less than ₹22,000 crore, and said he had sold personal assets to help repay group debts (India Today, August 28-31).

As creditor opposition mounted, the NCLT formed a special five-member bench to review the previous approval, after it emerged there was no clear majority among the earlier judges (Mint, August 31). On September 1, this new bench stayed the repayment plan and ordered a status quo on Chandra's assets, putting the original settlement on hold (Mint, The Hindu, Indian Express).

Chandra's legal team then challenged the very formation of the five-member bench, arguing it was not legally justified and suggesting the process was being influenced by media pressure (Mint, The Hindu, India News, September 2). The National Company Law Appellate Tribunal (NCLAT) agreed to review these petitions and postponed further proceedings.

As of early September 2026, Subhash Chandra's proposed ₹6.5 crore settlement is suspended. The NCLT has barred him from selling or transferring any assets while the matter is pending. No final decision has been issued, and the original order allowing the drastic debt reduction is not in effect.

Multiple banks and financial institutions are actively contesting the plan, and the legal process is far from over. The NCLAT will now consider whether the expanded NCLT bench is valid and how the dispute should proceed.

The next major development will be the NCLAT's review of the five-member NCLT bench's legitimacy, with hearings postponed until at least October 7, according to The Hindu. The outcome will determine whether Chandra's controversial settlement plan can move forward or if creditors will be able to push for a different resolution. The case is also being closely watched for its impact on how India handles large personal insolvencies and guarantees by business leaders.