Repayment Plan Approval and Public Backlash
On August 25, 2026, the Delhi bench of the National Company Law Tribunal (NCLT) approved a personal repayment plan for Essel Group chairman and Zee founder Subhash Chandra. The ruling follows a third-member tiebreaker opinion, marking a significant development in his ongoing insolvency proceedings. Under the approved plan, Chandra is set to pay ₹6.25 crore to creditors, along with ₹25 lakh in insolvency process costs, against admitted claims totaling approximately ₹22,006.57 crore.
The approval triggered immediate public and political scrutiny, with critics highlighting the stark disparity between the total liability and the settlement amount—a figure widely framed in media reports as a 99.97% haircut. Figures ranging from opposition leader Rahul Gandhi to industry leaders like Harsh Goenka and businessman Vijay Mallya weighed in on the proceedings. Chandra, in response to the viral nature of the coverage, publicly rejected the ₹22,000-crore framing, arguing that his liability is limited to creditors representing roughly 20% of the total claims, or approximately ₹4,000 crore.
The Mechanics of Personal Guarantees
The core of the legal proceedings lies in personal guarantees, which serve as a mechanism to align a promoter’s economic interests with those of the lender. As Soumya Singh, Co-Founding Partner at Thistle&Law, notes, these guarantees are intended to ensure promoters have “skin in the game” and cannot treat corporate default as a ring-fenced issue. Under Section 128 of the Indian Contract Act, a guarantor’s liability is coextensive with that of the borrower, allowing lenders to pursue personal assets—such as real estate and shares—distinct from the corporate entity’s collateral.
However, the Chandra case highlights a systemic gap in recovery. According to the Insolvency and Bankruptcy Board of India (IBBI) quarterly newsletter for April–June 2026, creditors have recovered only 1% of admitted claims across 64 personal guarantor resolutions since the framework became operational. The recovery process is often hindered by the timing of insolvency, as a promoter’s assets may be pledged, transferred, or depreciated by the time default occurs.
Asset Disclosure and Verification Challenges
A central point of contention in the NCLT proceedings was the valuation of Chandra’s assets. While Canara Bank alleged asset suppression regarding a Lutyens’ Delhi property, the tribunal rejected the claim, noting that evidence provided by media reports was insufficient to prove suppression. Furthermore, while the bankruptcy resolution professional has powers to verify claims, they lack a mandatory statutory requirement to conduct forensic audits or unrestricted asset tracing unless credible material suggests fraud.
Notably, records indicate that Chandra offered to consent to an independent asset audit during a creditor meeting on September 18, 2024, but the proposal was not pursued by the creditors involved. With the NCLT order now under challenge at the National Company Law Appellate Tribunal (NCLAT) by Union Bank, LIC Housing Finance, and Canara Bank, the case remains a critical test for the enforceability of personal guarantees in India.