CPI(M) calls NCLT debt settlement involving Subhash Chandra a ‘mockery of fair justice’

The Communist Party of India (Marxist) has criticised the National Company Law Tribunal (NCLT) for approving a repayment plan of Rs 6.5 crore against claims amounting to Rs 22,006.57 crore involving Zee Group founder and chairman Subhash Chandra.

In a statement, the CPI(M) Polit Bureau described the decision as a “mockery of the principles of fair justice” and alleged that it reflected class bias on the part of the Tribunal.

According to the party, the lenders will suffer a loss of 99.97 percent under the approved settlement. It cited the case of LIC Housing Finance, which had a claim of Rs 1,322.39 crore but has been approved a payment of only Rs 38 lakh, or 0.028 per cent of its claim.

The CPI(M) also alleged that Chandra is known for his close ties to the BJP and the Sangh Parivar and said the NCLT order violated the judicial principle of the rule against bias.

The party expressed concern over what it described as a consistent pattern in which large corporations are allowed to siphon off huge amounts of public money. It alleged that wilful defaulters are permitted to make large borrowings and, years later, have their debts settled through massive discounts under the insolvency process.

The CPI(M) said such settlements come at the expense of taxpayers and small depositors. It questioned why ordinary taxpayers should bear the cost of defaults by large corporations and alleged that politically influential crony capitalists are provided large amounts of credit before being bailed out through what is described as a “haircut”.

The party contrasted the treatment of large corporate borrowers with that of poor and marginalised sections of society. It pointed out that thousands of indebted farmers, agricultural workers, women and daily wage workers face severe distress, including suicides, over their inability to repay loans.

The CPI(M) also referred to household debt, which it said, citing RBI data, stands at an all-time high of 45.5 percent of GDP. It noted that loan waivers for farmers have often been questioned as an imprudent policy, while thousands of crores of corporate debt are being waived.

Citing an RTI reply from the Central Bank of India, the party said the loan recovery rate is 74 percent for small borrowers with loans of Rs 1 crore and below, compared with only 14.5 percent for big borrowers with loans of Rs 100 crore and above.

The CPI(M) demanded that the NCLT order be reversed and called on the Union Government to stop what it described as a policy of rewarding wilful defaulters at the expense of ordinary taxpayers.