Mumbai:
Public sector lender Union Bank of India has decided to challenge the resolution plan approved by the National Company Law Tribunal (NCLT) in the personal insolvency case involving Essel Group Chairman Subhash Chandra. The bank said on Saturday that it would approach the National Company Law Appellate Tribunal (NCLAT) against the order.
The personal insolvency proceedings against Subhash Chandra were initiated following a petition filed by Indiabulls Housing Finance Limited. Several major lenders, including Union Bank of India, Canara Bank and LIC Housing Finance, had opposed the resolution plan and urged the NCLT not to approve it.
In its statement, Union Bank said that several public sector lenders, including its UK-based subsidiary, Union Bank of India (UK) Limited, had voted against the resolution plan. The lenders argued that the proposed plan did not adequately protect their interests.
However, the plan secured the required voting threshold due to majority support from some private-sector lenders, following which the NCLT approved it. Union Bank said that it would now challenge the decision before the NCLAT.
Union Bank stated, “In the personal insolvency case filed by Indiabulls Housing Finance Limited, Union Bank of India (UK) Limited, Canara Bank, LIC Housing Finance and other public sector institutions had rejected the resolution plan and opposed its approval before the NCLT. However, the plan was approved due to majority support from certain private lenders. Union Bank will now challenge the decision before the NCLAT.”
The development comes at a time when HDFC Bank is also considering filing an appeal against the same order. HDFC Bank recently said that only 3.2 percent of its claim of approximately Rs 680 crore had been admitted, and it was also examining its legal options in the matter.
The NCLT's decision has attracted significant attention in banking and financial circles because lenders are expected to recover only a small portion of their claims under the approved resolution plan. As a result, several lenders consider the plan highly detrimental to their interests.
Meanwhile, Subhash Chandra has clarified his position regarding the case, saying that he did not personally take the loans in question. According to him, he had acted only as a personal guarantor for borrowing companies associated with the Essel Group.
Chandra also clarified that the figure of Rs 22,006 crore widely cited in the media represents the total claims filed during the insolvency proceedings. According to him, the figure should not be treated as the current amount due or as his final financial liability.
