Banks Challenge NCLT Order on Chandra's 6.25 Crore Repayment Plan

Several major financial institutions are challenging a National Company Law Tribunal order that approved a repayment plan under which Essel Group founder Subhash Chandra will pay just 6.25 crore to settle personal guarantee liabilities amounting to creditor claims of approximately 22,006.57 crore. The appeal, filed before the National Company Law Appellate Tribunal, contests the plan's approval on August 25, 2026, which mandates a recovery of only about 0.03 percent for creditors.

The repayment plan, which also allocates 25 lakh toward insolvency process costs, was sanctioned by NCLT Judicial Member Nilesh Sharma after a majority of financial creditors voted in its favor. However, public sector banks including Canara Bank, Union Bank of India, and LIC Housing Finance, along with private lender HDFC Bank, have announced their intention to appeal the order. Solicitor General Tushar Mehta, representing LIC Housing Finance, sought an urgent hearing on August 31, arguing that allowing the order to stand would defeat the purpose of the Insolvency and Bankruptcy Code. The NCLAT bench agreed to list the matter for hearing on September 1, 2026.

The core of the opposition centers on the...