New Delhi, Aug 27 (PTI) The Congress on Thursday dubbed NCLT as 'Neta-Company Loot Tribunal' after it cleared media baron Subhash Chandra's Rs 6.5 crore payout to settle Rs 22,006 crore dues and also took a swipe at the government, saying this was not just a haircut but a "mundan".

The opposition party said the haircut approval by the National Company Law Tribunal (NCLT) makes a "complete mockery" of the Insolvency and Bankruptcy Code, 2016.

In his reaction, Chandra said the total claim against him in the personal insolvency proceedings is only "Rs 3,992 crore" for which he was a personal guarantor and not the borrower. In a statement, Chandra claimed that he "has not borrowed any money from any lender".

Attacking the government, Gandhi said it has created two systems -- one for a handful of billionaires and the other for everyone else.

In a post in Hindi on X, he said, "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 Modi government has created two systems in the country -- one for a handful of billionaires, and another for everyone else," the Leader of Opposition in Lok Sabha said.

The insolvency tribunal approved a repayment plan under which Chandra will pay just Rs 6.5 crore to settle admitted creditor claims of about Rs 22,006.57 crore in his personal insolvency resolution process, translating into a haircut of nearly 99.97 per cent for lenders.

NCLT member (judicial) Nilesh Sharma, ruling as a third member, on Tuesday approved the plan under Section 114 of the Insolvency and Bankruptcy Code (IBC), rejecting objections by lenders that the recovery was too meagre to merit approval.

Congress general secretary Jairam Ramesh said that in finance 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 said the NCLT approving the repayment plan under which creditors will receive only Rs 6.5 crore against admitted claims of around Rs 22,006.57 crore, is "not just a haircut. It is actually a mundan and makes a completely mockery of the Insolvency and Bankruptcy Code, 2016".

Speaking on the issue at a press conference, Congress general secretary Randeep Singh Surjewala said, "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." "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.

The finance minister must immediately come out and state as to how many lakh crores have been "plundered in haircuts" through NCLT, he said.

Two members of the NCLT gave the split verdict, after which the president of the forum appointed Sharma as the third member amid the difference of opinion.

Sharma rejected the claims of the dissenting creditors led by LIC Housing Finance, which had argued that the payout was "unviable and unlawful".

The NCLT had contended that against admitted claims of approximately Rs 22,006.57 crore, the repayment plan proposed the payment of only Rs 6.25 crore to creditors and Rs 25 lakhs towards process costs.

However, the NCLT held that the objecting creditors together held less than 20 per cent of the voting share, while the plan had been approved by the required number of vote shares -- 80.81 per cent share.

Sharma, in its 144-page-long order, said the resolution professional's valuation showed Chandra's personal estate was worth significantly less than the amount offered under the plan, and that dissenting creditors were unlikely to recover more by rejecting it, since he would then face bankruptcy rather than being able to pay from a position of financial recovery.

"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," the NCLT observed.

The tribunal held that its role was not to substitute its own commercial wisdom for that of the creditors or to assess whether the settlement amount was adequate. PTI ASK ZMN