NCLT freezes Subhash Chandra's Rs 6.25 crore plan against Rs 22,007 crore of claims

A five-member bench of the National Company Law Tribunal stayed, on 1 September, the 25 August order that had approved Subhash Chandra's personal insolvency repayment plan. The plan offered about Rs 6.25 crore to creditors whose admitted claims total Rs 22,006.57 crore, plus Rs 25 lakh for process costs. That is a recovery of roughly 0.03 percent and a haircut of about 99.97 percent.

The bench is headed by NCLT President Justice (retired) Anilinder Singh Grewal. Sitting with him are judicial members Bachu Venkat Balaram Das and Mahendra Khandelwal and technical members Atul Chaturvedi and Ravindra Chaturvedi. They said no clear majority had formed among the members who previously heard the case, so the 25 August order cannot be given effect. Notices have gone to all parties. The next date is 23 September. On a request from Solicitor General Tushar Mehta, appearing for lenders, the bench also barred Chandra from selling, transferring, encumbering or otherwise dealing with his properties, directly or indirectly.

How the file split

Indiabulls Housing Finance opened the personal guarantee case. A two-member NCLT bench split in September 2025. Judicial Member Ashok Kumar Bhardwaj approved the plan. Technical Member Reena Sinha Puri rejected it, citing problems in how claims were admitted and voted. Nilesh Sharma was named the third member. On 25 August he approved the plan, with changes on disputed claims, and sent it back toward the original bench. Creditors holding 80.81 percent of the voting share had backed the plan. Objectors held less than 20 percent.

Lenders who opposed the deal say the recovery is not a commercial settlement. They also question whether some votes came from entities linked to Chandra. Mehta told the five-member bench that an appeal against Sharma's order was already on file. Those lenders then told the National Company Law Appellate Tribunal about the stay. NCLAT pushed their own hearing to 2 September.

What the code does and does not decide

Section 115 of the Insolvency and Bankruptcy Code says an approved repayment plan binds all creditors, including those who voted no. Sharma's order had leaned on that section and on the idea that a tribunal does not replace the creditors' commercial judgment. The five-member bench has not rewritten that law. It has said that, on this file, there was no majority judgment to enforce. That is a procedural holding with a large practical effect. Until 23 September, and likely beyond, Chandra cannot close the 0.03 percent deal and cannot move assets.

Personal insolvency under the code is still a thin body of Indian case law. A 99.97 percent haircut on a well-known promoter was always going to be tested. The test is now a five-judge bench rather than a third member's casting vote. Creditors who voted yes wanted finality. Creditors who voted no wanted a second look at the claim register and the asset schedule. Both groups now wait on Grewal's bench. The number that will follow the case, whatever the outcome, is still Rs 22,006.57 crore of admitted claims against a plan that offered Rs 6.25 crore.