NCLT stays Zee founder Subhash Chandra's Rs 6.5 crore repayment plan

The National Company Law Tribunal (NCLT) has stayed the earlier approval of a ₹6.5 crore repayment plan proposed by Zee Group founder Subhash Chandra in his personal insolvency proceedings. The development came after a five-member NCLT bench took up the matter and suspended the operation of the earlier order that had cleared Chandra’s repayment proposal. The tribunal has also directed Chandra not to sell, transfer or otherwise dispose of his assets while the case is being examined.

The repayment plan had proposed a payment of around ₹6.25 crore to creditors, along with ₹25 lakh towards the expenses of the insolvency process. The proposal had attracted attention because the amount was substantially lower than the admitted claims against Chandra, which stood at around ₹22,006.57 crore. The earlier approval of the plan was issued by a smaller NCLT bench on August 25. However, differences among the members of the bench led to the matter being placed before a larger five-member bench for consideration.

The latest order means that the proposed settlement cannot be implemented for now. The tribunal has issued notices to the concerned parties and will hear their arguments before deciding the next course of action. The case relates to personal guarantees provided by Chandra in connection with borrowings by companies associated with the Essel Group. Proceedings against him were initiated after lenders sought recovery of amounts linked to those guarantees.

The proposed settlement had also faced objections from lenders, who questioned whether the amount offered represented an adequate recovery against the claims admitted in the insolvency proceedings. The significant difference between the total claims and the proposed repayment has made the case an important one for creditors and financial institutions.

The NCLT’s decision to restrict the transfer or disposal of Chandra’s assets is also significant. The direction ensures that his assets remain protected while the tribunal reviews the repayment proposal and the objections raised by the parties. The ₹6.5 crore repayment plan remains on hold. The final outcome will depend on the larger bench’s assessment of the insolvency proceedings, creditor objections and the proposed settlement.

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