A consortium of public sector financial institutions has confirmed plans to challenge the National Company Law Tribunal’s (NCLT) approval of a Rs 6.5 crore debt repayment plan proposed by Subhash Chandra, former chairman of Essel Group and founder of Zee Entertainment.
NCLT Ruling and Lenders' Objections
The NCLT sanctioned Chandra’s proposed settlement plan to resolve personal insolvency proceedings initiated by financial creditors. However, three prominent institutional lenders—Union Bank of India, Canara Bank, and LIC Housing Finance—have formally expressed dissent over the resolution framework.
According to reporting by Ommcom News, the consortium intends to file a statutory appeal before the National Company Law Appellate Tribunal (NCLAT) in New Delhi on several legal grounds:
- Significant debt undervaluation: The lenders argue that the approved settlement figure of Rs 6.5 crore represents an unacceptable haircut relative to total outstanding liabilities.
- Collateral valuation scrutiny: The appeal requests a forensic re-evaluation of the underlying collateral, personal assets, and financial guarantees backing the original loans.
- Systemic banking integrity: Lenders emphasize that permitting low-value settlements against substantial commercial credit exposure sets a detrimental precedent for debt recovery proceedings across the state-owned banking system.
