A five-member NCLT bench said there was no majority view on Chandra’s repayment plan and directed him not to alienate his properties directly or indirectly
Subhash Chandra, chairman of Essel Group and founder and chairman emeritus of Zee Entertainment Enterprises
Press Trust of IndiaNew Delhi5 min read Last Updated : Sep 01 2026 | 5:01 PM IST
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Insolvency tribunal NCLT on Tuesday barred Essel Group Chairman Subhash Chandra from alienating his assets and stayed an order allowing him to settle claims arising from personal guarantees on group borrowings for about Rs 6.5 crore, against claims of roughly Rs 22,006 crore.
A five-member special bench of the National Company Law Tribunal (NCLT), headed by President Justice Anupinder Singh Grewal, said there was no clear majority view on the repayment plan and therefore the order could not be given effect.
“It is manifest that as per Section 419(5) of the Companies Act, there is no clear majority view capable of being given effect to. Therefore, the order dated August 25, 2026 of the third member, Nilesh Sharma, Member (Judicial) is stayed,” the bench said.
The tribunal also directed that Chandra, the personal guarantor, “shall not alienate any assets whatsoever either directly or indirectly,” and issued notices to all parties in the case.
The restraint was sought by Solicitor General Tushar Mehta, appearing for dissenting creditors including LIC Housing Finance, Canara Bank and Union Bank, who cautioned that the “substratum” of the matter could otherwise be lost.
Justice Grewal said the tribunal would hear all parties at length, including Chandra and creditors opposing the repayment plan.
“We will hear you at length,” the bench told Chandra’s counsel when he sought to make a brief submission.
The five-member bench said the next hearing would be held on September 23.
NCLAT Challenge
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The dispute has also reached the National Company Law Appellate Tribunal (NCLAT), where dissenting lenders have challenged the repayment plan.
A three-member NCLAT bench led by Officiating Chairperson Justice Yogesh Khanna took up the matter on Tuesday following a request from Mehta. The Solicitor General sought a day’s time to decide whether the lenders wanted to proceed with the appeal and said he would return to the tribunal on Wednesday.
The latest NCLT order follows a long-running split within the tribunal over Chandra’s personal insolvency proceedings.
An original two-member NCLT bench comprising Ashok Kumar Bhardwaj, Member (Judicial), and Reena Sinha Puri, Member (Technical), delivered dissenting judgments in September 2025. Bhardwaj approved the repayment plan, while Puri rejected it, citing irregularities in the admission of claims and voting.
The matter was subsequently referred to a third member, Nilesh Sharma, who on August 25 approved the repayment plan, subject to excluding certain disputed claims and reallocating their share among eligible creditors.
The third member’s order was then found not to have produced a clear majority when read with the earlier split verdict, prompting a fresh reference to the NCLT president and the constitution of the five-member special bench.
Rs 6.5 crore recovery against Rs 22,006 crore claims
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The repayment plan would allow creditors to recover only about Rs 6.5 crore from Chandra’s personal estate against claims of roughly Rs 22,006 crore – a recovery of a fraction of the claims.
Ten banks and lenders supported the proposal, while dissenting creditors including HDFC Bank, LIC Housing Finance and Canara Bank opposed it, arguing that the recovery was negligible. The dissenting lenders represented less than 20 per cent of the voting share.
Chandra has disputed the way the Rs 22,006-crore figure has been presented. He says it does not represent money he personally borrowed but claims arising from personal guarantees he provided for loans taken by Essel Group companies.
He has put the claims against his personal guarantees at about Rs 3,990 crore, saying the larger figure relates to claims against the underlying corporate borrowers.
The NCLT, while approving the settlement last week, had observed that proceeding with bankruptcy against Chandra could result in an even lower recovery for creditors. The tribunal also noted that his estate “comprises very few assets with negligible value”.
Dissenting lenders have sought greater scrutiny of Chandra’s declared net worth, arguing that it was an important basis on which the guarantees were extended. Figures cited by the lenders put his net worth at about Rs 40,600 crore in 2018 and Rs 45,900 crore in 2017, before falling sharply by 2024.
Following Tuesday’s order, Chandra said in a statement: “We have complete faith and confidence in our judicial system.”
From business empire to insolvency
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Chandra was once among India’s most prominent business figures, with interests spanning television, packaging, infrastructure and direct-to-home television. He also served as a member of the Rajya Sabha after being elected with the backing of the Bharatiya Janata Party (BJP).
His business empire came under severe pressure after the 2018 liquidity crisis triggered by the collapse of infrastructure financier IL&FS. Essel Group companies, which had accumulated substantial debt, struggled to refinance as liquidity tightened.
Much of the group’s debt was secured against pledged shares. Falling share prices triggered margin calls and further share sales, adding to the pressure on the group. Some businesses were subsequently sold, while others entered insolvency proceedings.
The latest proceedings put the spotlight on India’s personal-guarantee insolvency framework, under which lenders can seek recovery from promoters who guarantee corporate borrowings.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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First Published: Sep 01 2026 | 1:10 PMIST
