Union Bank to Challenge Subhash Chandra Insolvency Plan Approval

Union Bank of India is poised to challenge the National Company Law Tribunal’s (NCLT) recent approval of a resolution plan for Essel Group Chairman Subhash Chandra’s personal insolvency. The bank plans to appeal this decision before the National Company Law Appellate Tribunal (NCLAT).

This development follows the NCLT’s decision to greenlight the resolution plan, despite strong opposition from public sector creditors. Indiabulls Housing Finance Limited had initially initiated these personal insolvency proceedings against Chandra.

Creditors Opposing the Plan

• Union Bank of India
• Canara Bank
• LIC Housing Finance

The tribunal’s approval was granted after the plan reportedly garnered majority support from certain private-sector creditors. However, this has led to significant concerns among lenders due to the substantial “haircuts” involved, indicating a low recovery for their claims.

HDFC Bank is also considering an appeal against the NCLT order, highlighting similar concerns. The bank noted that only 3.2 percent of its total claim of Rs 680 crore was admitted under the tribunal’s decision.

Key Figures in Question

• HDFC Bank’s total claim: Rs 680 crore
• HDFC Bank’s admitted claim: 3.2 percent of total claim
• Total claims filed in proceedings: Rs 22,006 crore

Subhash Chandra has contested how the proceedings are being characterized by some reports. He clarified that he did not personally borrow funds from the lenders.

Instead, he acted as a personal guarantor for loans extended to various borrowing entities linked to the broader Essel Group. Chandra also stressed that the widely reported figure of Rs 22,006 crore represents the total claims filed in the insolvency proceedings, not his current payable amount or final liability.