Subhash Chandra was worth thousands of crores in 2017: Lenders before NCLT object to repayment plan

Before the National Company Law Tribunal (NCLT) on Monday, banks and financial institutions objected to the repayment plan submitted by the Resolution Professional for Zee Entertainment Enterprises Limited (ZEEL) founder Subhash Chandra (Indiabulls Housing Finance Limited v. Dr Subhash Chandra)..The primary objections were rooted in the fact that the amounts sought to be repaid were disproportionately low and that the committee of creditors comprised largely of Chandra’s proxies. Senior Advocate Abhinav Vashisht, who appeared for one of the objectors said, “In 2017, Subhash Chandra’s worth was in thousands of crores today they say it is only ₹31 crore.”Advocate Gaurav Mitra, who appeared for IDBI Trusteeship (Franklin Templeton), said, “Our outstanding is in hundreds of crores. They have offered to repay just a few lakhs.”.Other institutions such as HDFC Bank, IDBI Trusteeship (Edelweiss), LIC Housing and IndusInd Bank also vented their objections. However, a few creditors such as Corpcall Capital Advisors and Direct Media Distribution Ventures supported the repayment plan. The NCLT is expected to hear the objections in April and adjudicate on the same. .In April 2024, the NCLT admitted a petition filed by Indiabulls Housing Finance (IBHF) seeking initiation of insolvency proceedings against Chandra.IBHF had moved the Tribunal under Section 95 of the Insolvency and Bankruptcy Code (IBC) over outstanding loan amounts to be furnished by Chandra as he was the personal guarantor in an agreement executed between IBHF and Vivek Infracon.A personal guarantor gives written assurance of repayment of loans or credit facility on behalf of creditor company. In the event the creditor company does not repay the debt, the personal assets of the guarantor can be attached by the debtor.“From the report of the resolution professional for Vivek Infracon, it is clear that the debtor did not adduce any evidence to prove the repayment of the debt as claimed unpaid by the IBHF. In the wake, we are left with no option but to admit the petition filed under Section 95 of IBC, 2016. Ordered accordingly,” the order said..In view of this order, a moratorium commenced against Chandra in relation to all debts. Creditors cannot initiate any legal action of legal proceedings against Chandra till the Corporate Insolvency Resolution Proceedings (CIRP) concludes.Chandra was also restrained from disposing or transferring any of his assets.IBHF had moved the NCLT in 2022 after a loan of ₹170 crore given to Vivek Infracon had turned into a non-performing asset..Follow Bar and Bench channel on WhatsAppDownload the Bar and Bench Mobile app for instant access to the latest legal news.