HDFC Bank Mulls NCLAT Appeal Against NCLT Order Allowing Subhash Chandra to Settle Rs 22,006 Crore Creditor Claims for Rs 6.5 Crore

HDFC Bank, the largest private sector lender in India, is mulling an appeal against National Company Law Tribunal's order regarding a personal insolvency 
repayment plan allowing Zee Group founder Subhash Chandra to pay Rs. 6.5 crore to settle admitted creditor claims of Rs.22,006.57 crore.  

NCLT Member Nilesh Sharma, ruling as a third member, on Tuesday approved the plan under Section 114 of the Insolvency and Bankruptcy Code (IBC), rejecting objections by lenders that the recovery was too meagre to merit approval. Sharma rejected the claims of the dissenting creditors led by LIC Housing Finance, which had argued that the payout was 'unviable and unlawful'.

HDFC Bank said only 3.2% of the total claim amount has been admitted under the NCLT order in the matter. HDFC Bank's total claim was Rs. 680 crore. 
"HDFC Bank had opposed and voted against this resolution, which was approved by the majority. The Bank is exploring filing an appeal at the NCLAT (National Company Law Appellate Tribunal)," HDFC Bank said in a statement.

The bank's response comes a day after the NCLT ruling in the matter triggered controversy, as lenders had to take steep haircuts and are seen to be getting a negligible sum against their claims. Bank said it had inherited the loan facility from its parent, HDFC, before the bank's merger.

Chandra had stood as a personal guarantor for a Rs. 170 crore loan given to Vivek Infracon. The lender's move to NCLT to kickstart bankruptcy proceedings led to claims of over Rs. 22,000 crore from peers who also owed money.