<a href="https://www.mid-day.com/business/business-news/article/govt-demotes-union-bank-of-india-ed-pankaj-dwivedi-to-general-manager-23577977" target="_blank" rel="none noopener">State-run Union Bank of India</a> on Saturday said it plans to challenge the National Company Law Tribunal's (NCLT) approval of a resolution plan in the personal insolvency proceedings against media baron Subhash Chandra, according to news agency IANS.&nbsp;
The personal insolvency proceedings against Essel Group Chairman Chandra were initiated by Indiabulls Housing Finance Limited.
"In the matter of personal insolvency case filed by Indiabulls Housing Finance Ltd against Subhash Chandra, Union Bank of India (UK) Limited along with other public sector undertakings like Canara Bank, LIC Housing Finance Ltd, etc, have rejected the resolution plan and pleaded before NCLT for not approving the same," the bank said in a statement.
Union Bank of India said it will now approach the National Company Law Appellate Tribunal (NCLAT) to challenge the NCLT's order.
The development follows a similar move being considered by the <a href="https://www.mid-day.com/business/business-news/article/hdfc-bank-faces-federal-securities-classaction-lawsuit-stock-hits-52week-low-23646976" target="_blank" rel="none noopener">country's largest private sector lender HDFC Bank</a>.
On Thursday, HDFC Bank said it was planning to appeal against the NCLT order, saying that only 3.2 per cent of its total claim of Rs 680 crore had been admitted under the Tribunal's order.
"Now, Union Bank of India (UK) Limited is immediately challenging the decision of NCLT before NCLAT," the bank said.
<h2>Chandra's insolvency case</h2>
Subhash Chandra is facing personal insolvency case and on Tuesday, the NCLT Member (Judicial) Nilesh Sharma, ruling as a third member, had approved the plan under which Chandra will pay just Rs 6.5 crore to settle admitted creditor claims.
Earlier, two members of <a href="https://www.mid-day.com/business/business-news/article/reliance-group-refutes-subhash-chandras-allegations-against-its-media-entities-calls-them-baseless-23647291" target="_blank" rel="none noopener">the (NCLT) had given a split verdict</a>, following which the President of the forum had appointed Sharma as a third Member in regard to the difference of opinion, according to news agency PTI.
Sharma had rejected the claims of the dissenting creditors including LIC Housing Finance, which had argued that the payout was "unviable and unlawful".
The lenders are unhappy with the NCLT opinion as it involves substantial cuts, with creditors expected to recover only a small portion of their claims under the approved resolution plan.
The creditors had contended that against admitted claims of approximately Rs 22,006.57 crore, the repayment plans proposed payment of only Rs 6.25 crore to creditors and Rs 25 lakhs towards process costs.
Union Bank of India, along with other creditors, including Canara Bank and LIC Housing Finance, had voted against the resolution plan and opposed its approval before the NCLT.
<h2>Chandra says he is only a guarantor</h2>
The Essel Group Chairman Chandra on Thursday said the total claim against him in the personal insolvency proceedings is only Rs 3,992 crore, adding that he was only a personal guarantor and not the borrower.
"Total claim against <a href="https://www.mid-day.com/business/business-news/article/sebi-bars-zees-chairman-subhash-chandra-md-and-ceo-punit-goenka-for-1-year-from-securities-market-23642679" target="_blank" rel="none noopener">Subhash Chandra</a> 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," he said.
Of this, a claim of Rs 620 crore has already been settled and a further Rs 1,063 crore offered to be paid by the borrower entities.
"The borrowing entities for whom Chandra has provided personal guarantees have till date repaid Rs 43,000 crore," the statement said, adding that "the borrowing entities have assured to settle any other amount which might be left".
The matter will now go back to the original division bench for a formal order in line with the majority opinion, as required under Section 419 (5) of the Companies Act, 2013, as per PTI.
(With inputs from IANS and PTI)

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