Essel Group founder Subhash Chandra. File
In a setback to Essel Group founder Subhash Chandra, a five-member Bench of the National Company Law Tribunal (NCLT) on Tuesday (September 1, 2026) stayed an August 25 ruling by a single-member Bench that had cleared a repayment plan requiring him to pay ₹6.25 crore towards admitted claims of ₹22,006.57 crore in personal insolvency proceedings against him.
The Bench, comprising President Justice Anupinder Singh Grewal, Judicial Members Bachu Venkat Balaram Das and Mahendra Khandelwal, and Technical Members Atul Chaturvedi and Ravindra Chaturvedi, observed that the earlier opinions did not yield a “clear majority view capable of being given effect to.”
The larger Bench was constituted after the tribunal found that differing opinions among the members who had considered Mr. Chandra’s repayment plan had left no majority view that could be implemented. The plan has drawn considerable scrutiny because of the stark difference between the ₹22,006.57 crore in admitted claims against Mr. Chandra and the ₹6.25 crore proposed to be paid from his personal estate.
The Special Bench also issued notices to the parties and sought their replies, observing that it would hear them at length before taking a final decision on the repayment plan.
The insolvency case against Mr. Chandra dates back to 2024, when Indiabulls Housing Finance moved the NCLT seeking to enforce personal guarantees furnished by him for loans taken by Essel Group-linked entities. The proceedings concern his liability as a personal guarantor and are distinct from insolvency cases involving the group companies as well as regulatory proceedings concerning Zee Entertainment Enterprises.
The August 25 ruling on the repayment plan was delivered by a third member after the two-member Bench that initially heard the case delivered a split verdict. The plan had secured 80.814% of the creditors’ voting share, while those opposing it accounted for 19.186%.
Dissenting creditors had objected to the low recovery under the plan and questioned whether Mr. Chandra’s financial position and assets had been adequately examined. They had also sought a forensic investigation into his financial affairs.
Bar on alienating assets
Meanwhile, creditors, including LIC Housing Finance, HDFC Bank and Union Bank of India, have challenged the approval of the repayment plan before the National Company Law Appellate Tribunal (NCLAT). Appearing for the creditors before the NCLT Special Bench on Tuesday (September 1, 2026), Solicitor General Tushar Mehta sought an order restraining Mr. Chandra from alienating any properties held by him, either directly or indirectly.
The Special Bench accordingly restrained Mr. Chandra from alienating his properties.
“We also direct that the guarantors shall not alienate the properties whatsoever either directly or indirectly,” the Bench said in an oral order.
On August 30, 2026, Mr. Chandra said the borrowers whose loans were backed by his personal guarantees had assured him that they would reconcile their accounts with the lenders and clear the outstanding ₹4,262 crore.
The August 25, 2026, tribunal order, while approving the repayment plan, had concluded that it would provide a better outcome for creditors than initiating bankruptcy proceedings against Mr. Chandra. It had further observed that once creditors had approved a repayment plan in accordance with the Insolvency and Bankruptcy Code, the tribunal would ordinarily defer to their commercial judgment rather than undertake its own assessment.
The August 25, 2026, order has nevertheless raised questions over the effectiveness of personal guarantees as a recovery mechanism, particularly when the guarantor’s assets are worth only a fraction of the claims made by lenders.
Published – September 01, 2026 12:44 pm IST
