New Delhi, Aug 27: The National Company Law Tribunal’s approval of a repayment plan for Essel Group founder Subhash Chandra does not mean that banks have written off nearly 99.97 per cent of Rs 22,000 crore in loans. According to PTI, sources said the Rs 22,006 crore figure represents claims admitted against Chandra in his capacity as a personal guarantor for loans taken by several Essel/Zee-linked companies.
The Rs 22,006 crore figure represents claims admitted against Chandra in his capacity as a personal guarantor for loans taken by several Essel/Zee-linked companies, and does not represent debt personally borrowed by him, according to the sources.
Under the repayment plan approved by the NCLT, around Rs 6.25 crore is expected to be recovered from Chandra’s personal estate. However, the underlying corporate borrowers remain liable for their respective debts, with the plan envisaging payments of around Rs 1,494 crore by those companies, apart from Chandra’s personal contribution.
Sources said only around Rs 2,574 crore of the admitted claims related to loans for which Chandra had provided personal guarantees at the time of the original borrowing. Most of the remaining guarantees were reportedly furnished later as additional security.
Therefore, the reported 99.97 per cent “haircut” applies specifically to the recovery from Chandra in his capacity as a personal guarantor and should not be interpreted as a 99.97 per cent loss on Rs 22,006 crore of bank loans.
How the insolvency case beganThe insolvency proceedings against Chandra followed his personal guarantee for a loan extended by Indiabulls to Vivek Infracon. After the borrower defaulted, creditors initiated insolvency proceedings against Chandra in his capacity as guarantor.
The repayment plan received the support of 80.81 per cent of creditors by voting share, according to the information cited by the sources.
Several lenders, including LIC Housing Finance, HDFC Bank, Axis Bank, Canara Bank, RBL Bank and Union Bank, opposed the plan. However, the NCLT held that the objections were not sufficient to overturn the creditor-approved resolution.
Creditors continue to retain recovery avenues against the principal borrowers, securities and other available assets of the concerned companies.
Creditors questioned personal recovery
The relatively low recovery from Chandra’s personal estate was opposed by some creditors, who cited historical net-worth certificates showing his net worth at around Rs 45,888 crore in 2017 and Rs 40,562 crore in 2018, compared with a currently disclosed net worth of approximately Rs 31.79 crore.
Creditors had sought greater scrutiny of his assets in the proceedings.Chandra, meanwhile, has stated that the companies have so far paid around Rs 43,000 crore to creditors.
The case is thus a resolution of Chandra’s personal-guarantor liability and should not be characterised as a settlement or write-off of the entire debt owed by the underlying Essel/Zee-linked companies, the sources said.
Different from corporate insolvency recoveries
The Chandra case is an exceptional resolution involving a personal guarantor and is not representative of the broader corporate insolvency recovery process under the Insolvency and Bankruptcy Code (IBC), sources said.
According to the data cited by them, creditors have recovered around Rs 4.32 lakh crore through approved resolution plans up to March 2026, equivalent to 116.85 per cent of liquidation value and 94.56 per cent of fair value.
More than 32,000 cases have also been settled before admission into insolvency proceedings since the IBC came into force, involving assets worth around Rs 14 lakh crore.
Meanwhile, the net non-performing assets of scheduled commercial banks declined from 5.94 per cent in March 2018 to 0.48 per cent in September 2025, while the absolute amount fell from around Rs 5.2 lakh crore to Rs 94,000 crore.
The figures underline the distinction between the personal recovery from one guarantor and the broader liabilities of the corporate borrowers, which continue to be subject to separate recovery proceedings.
