NCLT stays Subhash Chandra repayment order, directs fresh hearing

Five-member bench finds no definitive majority in earlier proceedings, stays approval of Chandra's repayment plan and bars him from transferring properties

A five-member Bench of the National Company Law Tribunal (NCLT) on Tuesday put on hold its August 25 order approving a repayment plan proposed by Zee Group founder Subhash Chandra in his personal insolvency proceedings.

 

The larger Bench, headed by NCLT President Justice (retd) Anupinder Singh Grewal, found that the earlier proceedings had not resulted in a definitive majority view. It therefore decided to reconsider the matter afresh and issued notices to the parties.

 

The Bench also barred Chandra from transferring, disposing of or otherwise alienating his properties, whether directly or indirectly, during the pendency of the proceedings.

 

The insolvency proceedings were initiated by Indiabulls Housing Finance under Section 95 of the Insolvency and Bankruptcy Code (IBC).

  

Chandra’s proposed repayment plan offered ~6.25 crore against admitted creditor claims of ~22,006.57 crore, with a further ~25 lakh set aside towards insolvency process costs.

 

The plan had earlier produced conflicting views within the NCLT.

 

Judicial member Ashok Kumar Bhardwaj had supported its approval for creditors who voted in its favour, while proposing that dissenting banks and financial institutions retain the right to pursue other legal avenues for recovery.

 

Technical member Reena Sinha Puri, however, rejected the proposal, citing major shortcomings in the manner in which the insolvency resolution professional had conducted the process.

 

The split decision led to a reference to Judicial member Nilesh Sharma under Section 419(5) of the Companies Act, 2013, which governs how differences in opinion among members of an NCLT Bench are resolved.

 

In his August 25 decision, Sharma approved the repayment proposal but excluded claims lodged by Anil Kumar on behalf of 960 individuals and by Sunil Jain representing another 300 individuals. He directed that the amount earmarked for those claims be distributed among the remaining eligible creditors.

 

Sharma also ruled that the sanctioned plan would be binding on all creditors, including those who had voted against it, invoking Section 115 of the IBC.

 

The matter subsequently returned to the original two-member Bench. On August 31, that Bench concluded that the third member’s decision did not resolve the original difference of opinion because it differed from both opinions delivered by the initial members.

 

The NCLT observed that while Puri had rejected the repayment plan altogether, Bhardwaj had favoured restricting its benefit to supporting creditors, and Sharma had made it binding on all creditors while approving it.

 

With no common majority position emerging from the three opinions, the matter was placed before the NCLT president, who constituted the five-member Bench that has now ordered a fresh hearing.

 

The National Company Law Appellate Tribunal was also set to hear the appeals by lenders challenging the NCLT's approval of Chandra’s repayment plan on Tuesday. However, in the morning, Solicitor General Tushar Mehta, appearing for the lenders, told the appellate tribunal that the NCLT had already formed a five-member Bench to look into the matter.