Subhash Chandra’s ₹6.5 Crore Payout Gets NCLT Nod, Congress Calls It a ‘Mundan’
The National Company Law Tribunal (NCLT) has approved a repayment plan under which businessman and Zee Group founder Subhash Chandra will pay ₹6.5 crore against admitted creditor claims of around ₹22,006.57 crore. The decision has triggered a political reaction, with the Congress questioning the extremely low recovery for lenders. The approved amount works out to a recovery of only around 0.03% of the admitted claims, meaning lenders face a reduction of nearly 99.97%. Congress Takes a Sharp Dig Reacting to the NCLT decision, Congress leader Jairam Ramesh took a sharp swipe at the repayment plan. Referring to the financial term ‘haircut’, used when creditors agree to recover less than the amount owed, Ramesh said this was not merely a haircut but a “mundan”. He alleged that the decision makes a “complete mockery” of the Insolvency and Bankruptcy Code, 2016. There was no immediate public reaction from Subhash Chandra or his group to the Congress criticism. Why the Payout Became Controversial The repayment plan had faced objections from some creditors, including LIC Housing Finance, which argued that the proposed recovery was too small and that the plan was not viable or lawful. According to reports, the objections were rejected after the tribunal considered the voting pattern among creditors. The plan had received approval from creditors holding 80.81% of the voting share, while the dissenting creditors represented less than 20% NCLT Gives Its Approval The tribunal’s decision came after an earlier split verdict between two NCLT members, following which a third member was appointed to resolve the difference of opinion. NCLT Member (Judicial) Nilesh Sharma, acting as the third member, approved the repayment plan under Section 114 of the IBC. The tribunal held that the commercial decision taken by the required majority of creditors had to be respected, despite objections over the size of the recovery. A Huge Gap Between Debt and Recovery The case highlights the striking difference between the amount claimed by creditors and the amount ultimately approved for repayment. Against admitted claims of about ₹22,006.57 crore, the plan provides for only ₹6.5 crore, resulting in a recovery of roughly ₹0.03 for every ₹100 of admitted claims. The decision is now drawing attention to how insolvency proceedings balance creditor recovery with the commercial decisions of lenders under the IBC framework.