Union Bank to Challenge NCLT Order in Subhash Chandra Insolvency Case

Union Bank of India will challenge the National Company Law Tribunal (NCLT) order approving a repayment plan in the personal insolvency case of Essel Group Chairman Subhash Chandra. 

However, the tribunal approved the plan after it received the required majority support from some private creditors. 

Union Bank to Approach NCLAT 

Union Bank said it is now challenging the NCLT's decision before the National Company Law Appellate Tribunal (NCLAT). 

The bank said it and other public sector lenders had rejected the repayment plan and had asked the NCLT not to approve it. 

Only ₹6.5 Crore Repayment 

Under the repayment plan approved by the NCLT, Subhash Chandra would pay ₹6.5 crore against admitted creditor claims of around ₹22,006.57 crore. 

Union Bank is not the only lender unhappy with the NCLT order. 

HDFC Bank has also said that it is considering approaching the NCLAT. The bank had voted against the resolution plan. 

HDFC Bank's admitted claim was around ₹705 crore, which was about 3.2% of the total stated claims of ₹22,006 crore. The bank also said that interest was payable by the borrower. 

LIC Housing Finance to Continue Recovery Efforts 

LIC Housing Finance, another lender that opposed the plan, has said it will continue to pursue the principal borrowers even after the outcome of Chandra's personal insolvency case. 

The company has admitted claims of ₹1,322.39 crore in the matter. 

LIC Housing Finance also clarified that the NCLT order relates to Chandra's personal insolvency proceedings as a personal guarantor. It does not remove or reduce the liabilities of the companies that originally borrowed the money. 

What Happens Next? 

The matter will now move to the NCLAT after Union Bank's challenge. HDFC Bank is also considering an appeal, while LIC Housing Finance plans to continue its recovery efforts against the principal borrowers. 

Read More: Fino Payments Bank Share Price in Focus; Receives RBI Approval to Extend Interim CEO Tenure! 

Conclusion 

The NCLT's approval of the repayment plan has not gone down well with several lenders. Union Bank has decided to challenge the order, while HDFC Bank is also looking at an appeal. With creditors claiming more than ₹22,000 crore but the approved plan offering only ₹6.5 crore, the case is likely to see further legal proceedings. 

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