After HDFC Bank, public sector lenders Union Bank of India, Canara Bank and LIC Housing Finance (LIC HFL) have also decided to challenge the National Company Law Tribunal (NCLT) order approving a repayment plan for Essel Group founder Subhash Chandra before the National Company Law Appellate Tribunal (NCLAT).

The lenders had voted against the repayment plan, under which creditors will receive just Rs 6.25 crore against admitted claims of Rs 22,006.57 crore. The plan entails a recovery of around 0.03% for creditors.

Union Bank of India (UK), in a media statement, said it had rejected the repayment plan and opposed its approval before the NCLT. Union Bank held a 0.76% voting share in the proceedings. “Now, Union Bank of India (UK) Ltd is immediately challenging the decision of NCLT before NCLAT,” it said. 

Canara Bank, which had a 1.60% voting share, also said it had voted against the plan and was filing an appeal before the NCLAT. The bank had sought a forensic audit of the matter, but the request was not allowed due to its minority voting share. LIC Housing Finance, which held a 6.09% voting share, also opposed the plan and said it would immediately file an appeal before the NCLAT along with other public financial institutions.

The repayment plan was approved with the support of financial creditors representing 80.81% of the voting share, despite opposition from several lenders, including Axis Bank, Canara Bank, HDFC Bank, LIC HFL, RBL Bank and Union Bank.

The NCLT had said the approved plan would be binding on all creditors, including those that voted against it, under Section 115 of the Insolvency and Bankruptcy Code (IBC).

HDFC Bank had on Thursday said it was “exploring an appeal” before the NCLAT against the order. The private lender had said its admitted claim accounted for 3.2% of the total claims and that the facility had been inherited from erstwhile HDFC Limited.

Chandra has been facing insolvency proceedings since 2022 after Indiabulls Housing Finance, now known as Sammaan Capital, approached the NCLT over a personal guarantee provided by him for a Rs 170-crore loan extended to Vivek Infracon. The insolvency plea was admitted in 2024.