New Delhi: Essel Group founder Subhash Chandra has approached the National Company Law Appellate Tribunal (NCLAT) challenging the order of a five-member Bench of the National Company Law Tribunal (NCLT) that stayed approval of his repayment plan and restrained him from alienating his properties.
The appeal came up for hearing before a three-member Bench of the NCLAT, which directed Subhash Chandra’s counsel to serve copies of the petition on the creditors and implead them as parties to the proceedings.
The Bench of Officiating Chairperson Justice Yogesh Khanna (retd) and Technical Members Barun Mitra and Ajai Das Mehrotra listed the matter for further hearing September 29.
During the hearing, counsel representing the creditors submitted that advance copies of the appeal had not been served on them and that they had not been impleaded as parties, despite having participated in the proceedings before the NCLT.
In his appeal, Subhash Chandra has questioned the constitution of the five-member NCLT Bench and contended that its order “travels beyond the limited statutory jurisdiction contemplated” under the Companies Act, 2013.
The challenge relates to the NCLT’s September 1 order, under which the company tribunal stayed the operation of its earlier decision approving a repayment plan and decided to hear the matter afresh after observing that no clear majority view had emerged.
The five-member Bench, headed by NCLT President, Justice Anupinder Singh Grewal (retd), had also restrained Subhash Chandra from alienating his properties, directly or indirectly, following a request made by Solicitor General Tushar Mehta, who appeared for the creditors.
The insolvency proceedings against Subhash Chandra were initiated by Indiabulls Housing Finance Ltd. and had witnessed conflicting orders concerning the proposed repayment plan.
The original two-member NCLT Bench had delivered a split verdict, following which the matter was referred to a third member, Judicial Member Nilesh Sharma, under Section 419(5) of the Companies Act, 2013.
August 25, Sharma approved the repayment plan under Section 114 of the Insolvency and Bankruptcy Code (IBC), while directing the exclusion of certain claims submitted on behalf of 960 and 300 individuals.
He also directed the redistribution of the amount allocated to those claims among the remaining eligible creditors.
The third member had held that the approved plan would bind all creditors, including those who had opposed it.
However, when the matter returned to the original two-member Bench, it observed that the difference between the members had not been resolved and that no majority view had emerged.
Following the lack of consensus, the matter was placed before the NCLT President, who constituted the five-member Bench to hear the proceedings afresh. The insolvency proceedings have attracted attention over the substantial difference between the admitted creditor claims and the amount proposed to be paid by Subhash Chandra under the repayment plan.
Several creditors, including financial institutions, had opposed the plan, questioning the recovery proposed under it. However, Chandra has disputed the characterisation of the proceedings as a massive personal debt write-off, maintaining that he had acted as a personal guarantor for loans taken by borrowing entities associated with the wider Essel Group and had not personally borrowed the money from the lenders. He has also maintained that the Rs 22,006 crore figure represented claims filed in the proceedings and should not be treated as his personal outstanding debt.
