5 hrs ago
Subhash Chandra Challenges NCLT Restraint on Asset Alienation
Subhash Chandra is involved in a legal case about his personal debts.
He proposed paying about Rs 6.5 crore to settle claims of roughly Rs 22,000 crore.
Two NCLT members disagreed about whether his plan should be accepted.
A third judge supported the repayment plan.
A larger five-member NCLT bench later paused that decision and stopped Chandra from selling or transferring his assets.
Chandra says the larger bench went beyond what the law allowed.
He has asked the NCLAT, an appeals tribunal, to review the order.
The NCLAT has asked creditors to join the case and will hear it again on September 29.
Subhash Chandra has appealed to the NCLAT against an NCLT order restraining him from alienating assets during his personal insolvency proceedings.
A five-member NCLT bench stayed a tie-breaker judge’s approval of Chandra’s Rs 6.5 crore repayment plan against liabilities of about Rs 22,000 crore.
Chandra argues that the five-member bench exceeded its jurisdiction by ordering fresh replies and effectively reopening the entire case.
The original two-member NCLT bench had issued a split verdict, leading to a reference under Section 419(5) of the Companies Act.
The NCLAT directed Chandra’s counsel to serve creditors and add them as parties, listing the next hearing for September 29.
- Who
- Subhash Chandra, his creditors, the National Company Law Tribunal, and the National Company Law Appellate Tribunal.
- What
- Chandra has challenged an NCLT order that stayed approval of his repayment plan and restrained him from alienating his assets.
- Where
- The matter is before the National Company Law Appellate Tribunal in New Delhi.
- When
- The five-member NCLT order was passed on September 1, and the next NCLAT hearing is scheduled for September 29.
- Why
- Chandra argues that the five-member NCLT bench exceeded its statutory jurisdiction by turning a limited reference into a fresh rehearing of the proceedings.
Subhash Chandra’s Position
Tribunal and Creditors’ Position
Scope of the five-member bench
Subhash Chandra’s Position
Chandra argues that the bench was limited to resolving specified points of difference and exceeded its statutory jurisdiction by ordering fresh replies and effectively conducting a de novo rehearing.
Tribunal and Creditors’ Position
The five-member NCLT bench directed notices and fresh replies in pending applications while the matter remained subject to further proceedings.
Repayment plan
Subhash Chandra’s Position
Chandra relies on the plan approved by the third member, which proposed settling claims of about Rs 22,006 crore for approximately Rs 6.5 crore.
Tribunal and Creditors’ Position
The five-member NCLT bench stayed the operation of the third member’s order, leaving the plan subject to further proceedings.
Creditor participation
Subhash Chandra’s Position
Chandra’s appeal challenges the NCLT order and its asset restraint.
Tribunal and Creditors’ Position
Creditors told the NCLAT that they had not received advance copies or been made parties, despite participating in the NCLT proceedings; the tribunal directed that they be served and impleaded.
Key facts
- Appellant
- Subhash Chandra
- Appeal forum
- National Company Law Appellate Tribunal (NCLAT)
- Challenged order
- A five-member National Company Law Tribunal order restraining asset alienation
- Proposed repayment
- Rs 6.5 crore
- Claims involved
- Approximately Rs 22,006 crore arising from personal guarantees
- Legal provision cited
- Section 419(5) of the Companies Act, 2013
- Next hearing
- September 29
Sources
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