By T N Ashok
For Subhash Chandra, one of India’s most audacious entrepreneurs, the latest chapter in his long and turbulent business career has produced a number that looks almost surreal: ₹6.25 crore to settle admitted creditor claims of about ₹22,006.57 crore.
The National Company Law Tribunal’s approval of Chandra’s repayment plan on August 25 means creditors would recover roughly 0.03 per cent of the admitted claims, implying a nominal haircut of about 99.97 per cent.
The tribunal’s order, however, is not quite the ₹22,000-crore “loan waiver” that the political rhetoric surrounding the case suggests. Much of the money represents liabilities arising from personal guarantees Chandra gave for loans taken by Essel Group-linked companies, rather than ₹22,000 crore borrowed personally by him.
That distinction is legally important. Politically, however, it may be less so.
The real battle is now moving from the NCLT to the appellate arena, with lenders including HDFC Bank, LIC Housing Finance, Canara Bank and Union Bank of India indicating that they intend to challenge the decision. HDFC has said it is exploring an appeal, while LIC Housing Finance has disclosed an admitted exposure of ₹1,322.39 crore in two accounts involving Chandra as personal guarantor; under the approved plan, its recovery would reportedly be only about ₹38 lakh.
And that brings an uncomfortable question to the fore: can state-owned banks and other lenders challenge a tribunal order when the man at the centre of the dispute has long-standing political connections with the ruling establishment?
The answer, legally, should be yes. Whether the controversy remains merely a banking dispute or turns into a political embarrassment for the government will depend on what happens next.
The vote that changed everything. The most intriguing feature of the case is not actually the ₹6.25 crore. It is the vote.
Chandra says his repayment plan was approved by an overwhelming majority. Technically, that is correct: 80.814 per cent of votes cast supported the plan. Ten creditors voted in favour, while dissenting lenders represented 19.186 per cent.
But the banks have attacked the composition of that majority. Five entities—World Crest Advisors, Lemonade Capital Advisors, Corpcall Capital Advisors, Veena Investments and Direct Media Distribution Ventures—were alleged by dissenting lenders to have links to Chandra or the wider Essel family. Their combined voting power was about 61.78 per cent, making their votes potentially decisive.
The NCLT did not accept the lenders’ argument that these entities met the statutory test for being treated as Chandra’s “associates” under the IBC. The tribunal therefore allowed their votes to stand. That is the legal hinge on which the next stage of the dispute is likely to turn.
The banks are effectively saying: look beyond corporate paperwork and examine who actually stood behind these creditors, who controlled them and whether they were sufficiently independent to participate in deciding how much Chandra should repay.
The tribunal has so far taken the narrower legal view. That does not necessarily make the banks’ case frivolous. It makes the appellate question more interesting.
The government caught in the middle. This is where an otherwise technical insolvency case acquires a political dimension. Several public-sector institutions are among the dissenting creditors. Canara Bank and Union Bank of India are preparing to appeal, while LIC Housing Finance is also considering its legal options. HDFC Bank, a private lender, has separately indicated that it may challenge the ruling.
The government, therefore, is in an awkward position. On one side are institutions ultimately owned or controlled by the state and charged with protecting public money. On the other is a prominent entrepreneur with a long relationship with the BJP establishment.
Chandra was elected to the Rajya Sabha in 2016 as an independent candidate backed by BJP legislators in Haryana. His proximity to the BJP has never been a secret. His autobiography, The Z Factor, was launched by Narendra Modi when Modi was prime minister, and Chandra has openly described his support for Modi.
But political association is not evidence of political interference. That distinction matters.
There is no established evidence in the material presently available that the government directed public-sector banks to support Chandra’s plan. Indeed, the fact that Canara Bank and Union Bank are preparing to challenge the order points in the opposite direction.
That may actually be the government’s safest position: let the banks litigate, let the NCLAT examine the record and, if necessary, let the Supreme Court have the final word. The optics are uncomfortable. The legal process, however, can still remain independent.
Who is Subhash Chandra? The man behind the controversy is no ordinary promoter.
Born in Adampur in Haryana in 1950 into a grain-trading family, Chandra entered the family business as a teenager after it ran into serious financial difficulty. He dropped out of formal education and helped rebuild the business. His early fortune came from foodgrain trading and rice exports before he diversified into packaging.
In 1981 he established Essel Propack, which became a major player in laminated packaging. Then came EsselWorld.
But his defining gamble was television. Inspired by the televised Gulf War and the potential of satellite broadcasting, Chandra launched Zee TV in 1992, breaking Doordarshan’s effective monopoly over Indian television. Zee was India’s first privately owned Hindi satellite television channel. Later came Zee News, Dish TV and a sprawling network of entertainment, regional and news channels.
The gamble transformed him from a Haryana businessman into one of India’s most powerful media entrepreneurs.
Zee today remains a formidable media brand even after the contraction of the old Essel empire. ZEE Entertainment’s latest corporate disclosures cite more than 80 channels, 1.3 billion cumulative reach across 190-plus countries and 260,000-plus hours of content. Its FY2025 figures showed a 16.8 percent television network share and weekly linear-channel reach of 546 million in the India Urban 15+ market.
Its streaming platform, ZEE5, extends the business into digital entertainment across multiple Indian languages and more than 190 countries.
That is Chandra’s extraordinary legacy: he did not merely enter Indian television; he helped create the private television market itself.
But the empire became too ambitious. The weakness lay in the same entrepreneurial temperament that created Zee. Chandra diversified aggressively into infrastructure, cable distribution, DTH, entertainment, education, renewable energy and other businesses. The group eventually developed a complicated network of companies and financing structures.
The 2019 crisis exposed the vulnerability. Promoter shares in Zee were heavily pledged against borrowings. After the IL&FS crisis and tightening liquidity, the Essel Group faced a severe debt problem. Chandra ultimately sold a substantial portion of promoter holdings in Zee to reduce debt.
Contemporary accounts put the group’s debt burden at around ₹11,000 crore at the time. Chandra himself acknowledged that some infrastructure investments had gone badly and that his decision to keep funding loss-making projects had cost the group thousands of crores. The man who had once seemed incapable of losing had discovered the price of leverage.
And what about the rice “smuggling” allegations? This part requires caution.
Chandra’s early career unquestionably involved rice trading and exports, including shipments to the former Soviet Union. There are published accounts of controversies surrounding the quality and nature of rice exports and of investigations into his business dealings over the years. But I could not find sufficiently reliable evidence establishing the specific allegation that Chandra was involved in a proven “rice-smuggling scam to Africa.”
It would therefore be irresponsible to present that allegation as an established fact. There is, however, a well-documented record of controversies around his business and media operations. Most prominently, the Zee News controversy involving Congress MP Naveen Jindal led to allegations that Zee News executives sought payment for favourable coverage. Chandra was named in the FIR and questioned; he denied wrongdoing and later said the episode contributed to his political support for Narendra Modi.
That episode, along with subsequent controversies over Zee’s editorial positioning, has contributed to a perception among sections of the public that Zee’s news operations have been politically aligned. That is different from saying that Zee’s entire entertainment operation lacks credibility.
Zee is a curious combination of enormous reach and contested credibility.
Its entertainment properties remain commercially powerful. Its news channels have a substantial audience. Zee News in particular has repeatedly been criticised by journalists and political opponents for what they regard as a pro-BJP editorial tilt. Chandra himself acknowledged the political controversy around Zee News and its relationship with his own political positioning.
The result is a paradox: Zee is too important to dismiss but too politically contested to be regarded as neutral by everyone.
That distinction becomes especially important when its founder is simultaneously a businessman, former parliamentarian, political supporter and the subject of a gigantic insolvency dispute.
What happens next? The likely battleground is the appellate process. The dissenting lenders can challenge the NCLT’s findings before the National Company Law Appellate Tribunal, and potentially take substantial questions of law further if the appellate route permits.
The core issues are likely to include whether the five disputed creditors were correctly permitted to vote, whether the tribunal applied the IBC’s “associate” test correctly, whether the resolution professional adequately investigated Chandra’s assets and financial position, and whether the repayment plan satisfies the statutory requirements.
There is another question that will haunt the case: was the ₹6.25 crore recovery genuinely the best realistic outcome, or was the process itself responsible for producing such a microscopic recovery?
The NCLT has relied on the evidence before it, including Chandra’s claimed limited personal asset base and the statutory framework. But dissenting lenders have questioned the methodology used to calculate his net worth and the resolution professional’s handling of objections.
That is precisely why an appellate examination matters. If the five disputed creditors’ votes are ultimately excluded and the mathematics changes materially, the entire approval could be revisited. If the appellate tribunal upholds the NCLT, Chandra will have achieved something remarkable: a legally sanctioned exit from an enormous personal-guarantee exposure for a tiny fraction of the claims filed against him.
Neither outcome will erase the debt history of the Essel empire.
The larger warning. The Chandra case is bigger than Subhash Chandra. It tests whether India’s insolvency regime can distinguish between a genuine commercial failure and a promoter’s ability to structure his financial affairs so that creditors recover almost nothing.
IBC was designed to end the old culture of endless corporate debt restructuring and make promoters and creditors confront economic reality. Yet personal guarantees introduce another layer of complexity. A promoter may have guaranteed billions for corporate borrowings without personally holding assets remotely comparable with the guaranteed amount.
That is where the law meets economics. And then comes politics.
If the NCLT decision survives appeal, critics will ask whether India’s insolvency regime has effectively created a route through which influential promoters can escape enormous guarantee liabilities. If it is overturned, banks will argue that the system has demonstrated precisely the accountability it was designed to provide.
For Chandra, it is another gamble. For India’s banks, it is a test of whether ₹22,000 crore can really become ₹6.5 crore simply because the law says that is what the creditor vote permits.
And for the government, the safest answer may be the simplest one: do not intervene; let the institutions it owns fight the case in court.
In a democracy, the credibility of the government may ultimately depend less on whether Subhash Chandra wins or loses than on whether the public believes that the rules were applied to him exactly as they would have been applied to anyone else. The key angle to be probed is the 61.78% disputed voting bloc, not simply the headline haircut.
This provides strong ground for further investigations because the ₹6.25-crore repayment against ₹22,006.57 crore of admitted claims is only the headline. The more consequential issue is whether the voting process that produced the approval was legally constituted and whether the Insolvency and Bankruptcy Code’s definition of an “associate” has been interpreted too narrowly.
This was not a vote by “board members” of Zee or Essel. It was a vote by creditors in the personal insolvency process. Chandra’s plan received 80.814% of votes cast; however, dissenting lenders argue that five entities accounting for 61.78% of the voting power were associates or related to Chandra and therefore should not have been permitted to vote. The NCLT rejected that argument.
Also, the ₹22,006 crore figure needs careful treatment. Chandra says the figure represents total claims filed/admitted in the proceedings, whereas the claims he regards as actually payable after accounting for settlements and other adjustments are substantially lower—he has variously put the relevant figure at ₹3,992 crore and ₹4,262 crore. (IPA Service)
