Subhash Chandra tells NCLAT insolvency proceedings led to 'media trial'

Zee Group founder tells appellate tribunal he was 'vilified' over reports on repayment proposal; lenders object to statements intended for media publication

Zee Group founder Subhash Chandra on Wednesday told the National Company Law Appellate Tribunal (NCLAT) that he had been “vilified” over reports that he had proposed to pay ₹6.5 crore against admitted creditor claims of ₹22,006 crore.

 

Appearing for Chandra, advocate Sasmit Patra said the proceedings had resulted in a “media trial” that had damaged his client’s reputation, despite there being no final order approving the proposed plan.

 

Solicitor General Tushar Mehta, appearing for the lenders who have challenged the repayment plan, objected to Patra’s submission and said the NCLAT proceedings should not be used to make statements intended for publication in the media.

  

While the NCLAT observed that Chandra should raise his grievance before the National Company Law Tribunal (NCLT), where the insolvency case was still being heard, the appellate tribunal did not pass any formal orders.

 

A three-member NCLAT Bench comprising officiating chairperson Justice Yogesh Khanna and technical members Barun Mitra and Ajai Das Mehrotra was hearing appeals filed by Union Bank of India (UK), Canara Bank, and LIC Housing Finance against the NCLT’s August 25 opinion favouring Chandra’s repayment plan.

 

During the hearing before the NCLAT on Wednesday, Chandra’s counsel also questioned the NCLT’s authority to constitute a five-member Bench to reconsider the repayment plan. “The scope of Section 419(5) [of the Companies Act] is very limited. If there is a differing view, then that differing view has to be taken up by another member or other members. It does not empower the NCLT under the Insolvency and Bankruptcy Code (IBC) or company law to form a five-member Bench,” Patra argued.

 

Patra further disputed Mehta’s contention that the three NCLT members who had considered the repayment proposal had delivered substantially divergent opinions.

 

He said judicial members Ashok Kumar Bhardwaj and Nilesh Sharma had both found Chandra eligible under Section 79 of the IBC, with their principal disagreement relating to the treatment of dissenting creditors.

 

According to Patra, Bhardwaj had proposed that the plan should apply to creditors who supported it, while dissenting lenders could pursue other recovery remedies.

 

Sharma, on the other hand, had held that the plan would bind all creditors, including those who did not consent, under Section 115 of the IBC, which deals with the approval of a repayment plan. “Both are equally on the same page as far as Section 79 is concerned on eligibility. Therefore, to say all these issues have to be re-litigated is completely wrong,” Patra submitted.

 

The NCLAT observed that the validity of the five-member NCLT Bench was not under challenge in the lenders’ appeals. It said Chandra could independently challenge the September 1 order if he was aggrieved by it.

 

Mehta initially sought permission to withdraw the lenders’ appeals with liberty to revive them later, arguing that the matters might not require immediate consideration after the five-member NCLT Bench stayed Sharma’s opinion and decided to hear the case afresh.

 

Patra opposed the request, arguing that the appeals were themselves defective because Sharma’s opinion had not crystallised into a final NCLT order.

 

Mehta subsequently decided not to press the withdrawal applications and instead requested that the appeals remain pending. The NCLAT agreed and listed the matters for October 7.