​​​​​​​New Delhi, August 29: Canara Bank, Union Bank of India (UK) Ltd and LIC Housing Finance Ltd have decided to challenge the National Company Law Tribunal’s (NCLT) approval of a repayment plan proposed by Essel Group founder Subhash Chandra, intensifying the legal dispute over claims linked to his personal guarantees.

Canara Bank, which held a 1.60 per cent voting share among the financial creditors, said it had voted against the repayment plan and would appeal the NCLT order before the National Company Law Appellate Tribunal (NCLAT).

In a post on X, the bank said it had also sought a forensic audit. However, the request could not be pursued because of its minority voting share.

Union Bank of India (UK) Ltd also said it had rejected the repayment proposal and would immediately challenge the NCLT’s decision before the NCLAT.

LIC Housing Finance said it would file an appeal along with other public financial institutions.

The lenders said the repayment plan was approved because financial creditors representing 80.81 per cent of the voting share supported it.

The NCLT, on August 25, approved Chandra’s repayment plan, under which Rs 6.25 crore would be paid to creditors, along with Rs 25 lakh towards the costs of the insolvency process. This compares with admitted claims of approximately Rs 22,006.57 crore.

The insolvency proceedings stem from personal guarantees provided by Chandra for borrowings raised by companies linked to the Essel Group.

The repayment plan was approved despite objections from several lenders, with the tribunal observing that the proposal had received the requisite majority support from the financial creditors.

Chandra, in a public statement issued on Thursday, objected to the portrayal of the Rs 22,000-crore figure as money personally borrowed by him. He said the amount represents claims arising from guarantees he had given for corporate borrowings.

He further contended that the claims of lenders opposing the repayment plan total around Rs 3,992 crore, rather than Rs 22,000 crore.

Chandra said the group remains committed to resolving its outstanding obligations and settling the claims in accordance with the applicable process.

The proposed settlement has drawn attention because the Rs 6.25-crore repayment represents only a fraction of the total admitted claims, resulting in a near-total haircut for creditors.