₹22,006 Cr claims, ₹6.5 Cr payout: Congress alleges BJP favouritism in Subhash Chandra case

A major political storm has erupted after a federal insolvency tribunal approved a highly controversial repayment plan for media tycoon Subhash Chandra.

Under the court-approved scheme, the former television baron will pay just Rs 6.5 crore to settle staggering admitted creditor claims of Rs 22,006.57 crore. This represents an astonishing 99.97 per cent "haircut" for lenders. The ruling has provoked furious reactions from the opposition Congress party, which has accused the government of running a system rigged in favour of billionaires.

Chandra, who served as an Independent Rajya Sabha member from Haryana between 2016 and 2022 with the support of the ruling Bharatiya Janata Party (BJP), has defended the settlement. He insists his actual personal liability is far lower than the headline debt.

A Deep Political Divide

The National Company Law Tribunal (NCLT) approved the plan following a tense, split verdict. After two tribunal members disagreed, a third member, Nilesh Sharma, was appointed to break the deadlock. Sharma rejected intense objections from dissenting creditors led by LIC Housing Finance. The objectors had argued that the minuscule payout was "unviable and unlawful".

They pointed out that creditors would receive a mere Rs 6.25 crore, with the remaining Rs 25 lakh set aside for process costs. The opposition was quick to seize on the decision. Congress leaders accused the government of helping wealthy industrialists escape their financial obligations.

"The Modi government has created two systems in the country -- one for a handful of billionaires, and another for everyone else," said Rahul Gandhi, the Leader of the Opposition in the Lok Sabha.

Gandhi launched a scathing attack on social media, writing: "NCLT -- 'Neta-Company Loot Tribunal'. If a farmer doesn't pay Rs 50,000, his land gets auctioned off. If a salaried person misses even one EMI, bank goons show up at the house. Poor students can't even get loans for education. But for select 'friends', bank money is like personal property -- withdraw as much as you want, repay whatever you feel like."

The 'Mundan' Controversy

Congress leaders argue that such massive debt waivers undermine the country's entire financial system. Jairam Ramesh, the Congress general secretary, explained that in financial terminology, "when creditors are owed money and the debtor repays only part of it, the difference expressed as a percentage is called a haircut".

He added that the NCLT-approved plan is "not just a haircut. It is actually a mundan and makes a completely mockery of the Insolvency and Bankruptcy Code, 2016". The word mundan refers to a traditional head-shaving ritual.

Speaking at a press conference, Congress general secretary Randeep Singh Surjewala was equally scathing.

"So, they devised a beautiful word called haircut. In name of haircut, through NCLT, what Dr. Manmohan Singh Ji once said -- It's an institutional loot and plunder of public and bank money by Modi government."

Surjewala questioned why such vast write-offs are permitted.

"How can you have haircuts of 50 per cent, 60 per cent, 70 per cent, 80 per cent, 90 per cent, now 99 per cent? Then why are you having NCLT proceedings? This is loan waiver of industrialists in garb of haircuts. Congress Party has repeatedly raised it. Rahul Gandhi Ji, Kharge Ji, even my colleague, Communication In-charge Mr. Jairam Ramesh repeatedly has put out data, as to how banks of this country have been plundered in the name of haircuts through the mechanism of NCLT," he said.

Surjewala demanded that the finance minister state how many lakh crores have been "plundered in haircuts" through the tribunal.

Chandra Defends Guarantor Role

In a strongly-worded reaction to the controversy, Subhash Chandra dismissed the allegations. He clarified that he was merely a personal guarantor, not the actual borrower of the funds.

Chandra stated that he "has not borrowed any money from any lender".

He added: "Total claim against Subhash Chandra as a personal guarantor, in the personal insolvency proceedings, is only Rs 3,.992 crore by the objectors of the plan and not Rs 22,000 crore".

According to Chandra, the actual borrowing entities have already made massive repayments.

"The borrowing entities for whom Chandra has provided personal guarantees have till date repaid Rs 43,000 crore," his statement declared.

He added that a claim of Rs 620 crore has already been settled, another Rs 1,063 crore has been offered by the borrowing entities, and "The borrowing entities have assured to settle any other amount which might have left."

The tribunal itself justified the clearance. In his 144-page judgment, Nilesh Sharma noted that Chandra's personal estate was valued far below the settlement offer. If the plan were rejected, Chandra would face bankruptcy. This would leave dissenting lenders with even less recovery.

Sharma observed: "If the plan is approved and the debtor's insolvency is resolved, putting him back on his feet, the objectors would ultimately stand a better chance of recovering their debts directly from the Principal Debtors".