Union Bank To Challenge NCLT Approval Of Subhash Chandra’s Repayment Plan

Union Bank of India will challenge the National Company Law Tribunal’s (NCLT) approval of a resolution plan in the personal insolvency proceedings against Essel Group Chairman Subhash Chandra. The lender announced on Saturday that it would approach the National Company Law Appellate Tribunal (NCLAT), despite the plan having secured the required majority support from certain private-sector creditors.

The personal insolvency proceedings against Chandra were initiated by Indiabulls Housing Finance Limited. Union Bank, along with other creditors including Canara Bank and LIC Housing Finance, had voted against the resolution plan and opposed its approval before the NCLT. According to Union Bank, the plan was nevertheless approved because it received majority support from certain private creditors.

Union Bank stated that it would immediately challenge the NCLT’s decision before the appellate tribunal. The lender’s move comes amid concerns among creditors over the substantial haircuts involved in the approved resolution plan, with lenders expected to recover only a limited portion of their respective claims. The dispute is therefore likely to continue before the NCLAT as creditors seek to challenge the tribunal’s order.

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The development follows a similar position taken by HDFC Bank, which said on Thursday that it was exploring an appeal against the NCLT order. HDFC Bank stated that only 3.2 per cent of its total claim of Rs 680 crore had been admitted under the tribunal’s order. The bank also noted that the resolution plan was approved because of the majority vote of certain private creditors.

Chandra has disputed the way the insolvency proceedings have been characterised. In a statement issued on Thursday, he maintained that he had not personally borrowed money from the lenders involved in the matter. He stated that he had acted as a personal guarantor for loans taken by borrowing entities associated with the wider Essel Group.

Chandra also clarified that the widely reported figure of Rs 22,006 crore represented the total claims filed in the insolvency proceedings and should not be treated as the current amount payable or as his final liability. With Union Bank now preparing to approach the NCLAT and other lenders considering similar action, the approved resolution plan remains subject to further legal proceedings.

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