8 hrs ago
Subhash Chandra Challenges NCLT Bench as NCLAT Appeal Waits
Subhash Chandra is in a legal case because he guaranteed loans taken by companies linked to his business groups.
Creditors say the companies did not repay the loans.
Chandra offered ₹6.25 crore, while the admitted claims total ₹22,006.57 crore.
A smaller NCLT bench approved his repayment plan on 25 August.
The NCLT later formed a five-member bench and paused that approval because the earlier members did not have a clear majority view.
Chandra’s lawyers say the NCLT did not have the legal power to form the larger bench or restart the case.
Creditors have also challenged the plan before the NCLAT.
The NCLAT has kept that appeal open while the NCLT considers the case again, and will hear it on 7 October.
A five-member NCLT bench stayed the 25 August order approving Subhash Chandra’s repayment plan.
Chandra’s counsel argues that Section 419(5) does not authorize the NCLT to create a five-member bench or rehear the case.
The plan proposes ₹6.25 crore against admitted creditor claims of ₹22,006.57 crore, plus ₹25 lakh for process costs.
NCLAT has kept creditors’ challenge pending while the NCLT rehears the matter, with the next hearing set for 7 October.
The case concerns Chandra’s personal-guarantor liability for loans taken by Essel Group and Zee Group-linked companies.
- Who
- Zee Group founder Subhash Chandra, creditor institutions including LIC Housing Finance, HDFC Bank, Canara Bank and Union Bank of India, the NCLT and the NCLAT.
- What
- A dispute over Chandra’s personal-insolvency repayment plan, the NCLT’s five-member rehearing and creditors’ pending appeal before the NCLAT.
- Where
- The proceedings are before India’s National Company Law Tribunal and National Company Law Appellate Tribunal.
- When
- The original NCLT order was issued on 25 August; the larger-bench proceedings followed in September, with the NCLAT listing the matter for 7 October.
- Why
- The NCLT said the earlier approval lacked a clear majority, while Chandra disputes the legal authority for forming the five-member bench and creditors challenge the proposed payout.
Subhash Chandra’s Position
Creditors’ Position
Authority to form a larger bench
Subhash Chandra’s Position
Chandra’s counsel says Section 419(5) has a limited scope and does not authorize the NCLT to constitute a five-member bench or rehear the entire case.
Creditors’ Position
The NCLT formed the larger bench after members differed over the repayment plan and said the earlier order did not represent a majority view.
Status of the earlier approval
Subhash Chandra’s Position
Chandra’s counsel argues that the 25 August order approving the repayment plan could not be set aside and questions the decision to stay it.
Creditors’ Position
Creditors are challenging the plan before the NCLAT, including lenders such as LIC Housing Finance, HDFC Bank, Canara Bank and Union Bank of India.
Adequacy and basis of repayment
Subhash Chandra’s Position
Chandra proposed ₹6.25 crore and has said he did not personally borrow the money; he cited his ₹31.79 crore net worth as the basis of the proposal.
Creditors’ Position
Creditors’ claims total ₹22,006.57 crore, and they are seeking review of the approval; the articles also report a dispute over the voting process.
Key facts
- Proposed creditor payment
- ₹6.25 crore
- Admitted creditor claims
- ₹22,006.57 crore
- Insolvency process costs
- ₹25 lakh
- Relevant insolvency provision
- Section 95 of the Insolvency and Bankruptcy Code
- Legal provision disputed
- Section 419(5) of the Companies Act
- NCLAT hearing date
- 7 October
- Claims linked to personal guarantees
- About ₹2,574 crore, according to government officials cited by Mint
- Chandra’s stated net worth
- ₹31.79 crore
Quotes
Subhash Chandra’s counsel
Legal representative arguing against the NCLT’s expanded bench in Chandra’s personal insolvency case
“The scope of Section 419(5) is very limited… It does not give power to the NCLT under the IBC or company law to form a five-member bench”
livemint.com
Sources
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