3 hrs ago
Subhash Chandra Challenges Five-Member NCLT Bench in Insolvency Case
Subhash Chandra is involved in a legal case about debts linked to companies in the Essel Group.
The NCLT first had two members who disagreed about the case.
A third member, Nilesh Sharma, was then asked to help resolve the disagreement.
The NCLT later created a five-member bench and that bench paused Sharma’s order.
Chandra’s lawyer says the NCLT does not have the legal power to create such a large bench.
Creditors say the case has produced three different opinions, so a larger bench should examine it.
The case includes a proposed payment of about Rs 6.5 crore against claims of about Rs 22,006 crore, but no final approval of the plan has been given.
NCLAT did not decide the bench dispute and kept the appeals open.
Subhash Chandra challenged the NCLT’s authority to create a five-member bench for his personal insolvency case.
The bench was formed after two NCLT members issued a split verdict and Nilesh Sharma was appointed as a third member.
The five-member bench stayed Sharma’s order and barred Chandra from alienating his assets.
Chandra’s proposed repayment plan involves about Rs 6.5 crore against admitted creditor claims of roughly Rs 22,006 crore.
NCLAT kept the appeals pending and listed the matter for October 7, 2026, while the NCLT listed its matter for September 23, 2026.
- Who
- Essel Group Chairman Subhash Chandra, his counsel Sasmit Patra, dissenting creditors represented by Solicitor General Tushar Mehta, and members of the NCLT and NCLAT are involved.
- What
- Chandra challenged the NCLT’s formation of a five-member bench in his personal insolvency case and questioned its authority to do so.
- Where
- The proceedings are before the National Company Law Tribunal and the National Company Law Appellate Tribunal in New Delhi.
- When
- The challenge was heard on Wednesday; the NCLT listed its matter for September 23, 2026, and NCLAT listed the appeals for October 7, 2026.
- Why
- Chandra’s counsel said the relevant legal provisions do not authorize a five-member bench, while creditors said three divergent views justified review by a larger bench.
Chandra’s Challenge
Creditors’ Position
Authority to form a larger bench
Chandra’s Challenge
Chandra’s counsel called the NCLT order faulty and argued that the tribunal is not empowered under the relevant provisions to constitute a five-member bench.
Creditors’ Position
Creditors’ counsel said the unusual circumstances and three divergent views made the case suitable for examination by a larger bench.
Whether earlier decisions require re-examination
Chandra’s Challenge
Chandra’s counsel said the orders of Ashok Kumar Bhardwaj and Nilesh Sharma were aligned on eligibility under Section 79 and the repayment plan, so the issues should not be re-litigated.
Creditors’ Position
Creditors’ counsel said the proceedings had produced three divergent views requiring further examination.
Status of the NCLAT appeal
Chandra’s Challenge
Chandra opposed disposing of or withdrawing the appeal and argued that the five-member bench should have stayed all three earlier orders, including the split verdict.
Creditors’ Position
Tushar Mehta initially sought disposal with liberty to revive the appeal, but later asked that the appeals remain pending; NCLAT agreed.
Public discussion of the repayment plan
Chandra’s Challenge
Chandra’s counsel said Chandra had faced widespread criticism over the proposed Rs 6.5-crore payment even though no final order approving it exists.
Creditors’ Position
Mehta argued that NCLAT should not be used to make statements intended for media coverage, and the tribunal said related grievances should be raised before the NCLT.
Key facts
- Person at issue
- Subhash Chandra, chairman of the Essel Group
- NCLT bench
- A five-member bench was formed on Monday after a split verdict and stayed Nilesh Sharma’s order on Tuesday.
- Asset restriction
- The NCLT restrained Chandra from alienating his assets.
- Proposed repayment
- About Rs 6.5 crore
- Admitted creditor claims
- Roughly Rs 22,006 crore
- Chandra’s position
- His counsel argued that the NCLT lacks authority under the cited provisions to form a five-member bench.
- Next hearings
- The NCLT listed the matter for September 23, 2026, and NCLAT listed the appeals for October 7, 2026.
Quotes
Sasmit Patra
Senior Advocate representing Subhash Chandra before the NCLAT
“This forum cannot be used for saying something outside the court... this forum is being used to say something which will be printed tomorrow in the media. This is not the forum.”
telegraphindia.com
freepressjournal.in
“It does not give power to the NCLT under the IPC or company law to form a five-member bench. Under which authority, which power, then there is a five member bench,”
telegraphindia.com
freepressjournal.in
Sources
Related news
Subhash Chandra Challenges Five-Member Bench in Insolvency Case
Subhash Chandra Challenges NCLT Bench as NCLAT Appeal Waits
NCLT Deadlock Sends Subhash Chandra Debt Plan To Five-Member Bench
NCLT Five-Member Bench Stays and Reconsiders Chandra Repayment Plan
NCLT Stays Subhash Chandra’s Repayment Plan, Bars Asset Sales
NCLT Sends Subhash Chandra Repayment Plan To Five-Member Bench
NCLT halts Subhash Chandra asset sale amid lender challenge
NCLT Stays Subhash Chandra Repayment Plan, Orders Fresh Hearing
