Subhash Chandra insolvency: NCLT 5-member bench stays August 25 verdict, to hear case afresh

A five-member bench of the National Company Law Tribunal (NCLT) on Tuesday stayed the operation of the August 25 verdict by a smaller bench of the tribunal in the personal insolvency case against Zee Group founder Subhash Chandra.

The Bench, which comprised President Justice (retd) Anupinder Singh Grewal Judicial Members Bachu Venkat Balaram Das and Mahendra Khandelwal, and Technical Members Atul Chaturvedi and Ravindra Chaturvedi, said today that no clear majority view exists with respect to the previous verdict.

Hence, it decided to hear the case afresh and issued notice to all parties involved.

It also stayed the operation of the August 25 verdict and restrained Chandra from alienating any property, directly or indirectly.

The dispute concerns a repayment plan proposed by Zee Group founder Subhash Chandra in personal insolvency proceedings initiated by Indiabulls Housing Finance Limited under Section 95 of the Insolvency and Bankruptcy Code (IBC).

Under the plan, Chandra proposed to pay ₹6.25 crore to creditors against admitted claims of ₹22,006.57 crore. Another ₹25 lakh was earmarked for insolvency process costs.

The plan was initially considered by an NCLT bench comprising Judicial Member Ashok Kumar Bhardwaj and Technical Member Reena Sinha Puri. The two members delivered differing opinions.

Bhardwaj favoured approving the plan only in relation to creditors who had supported it. He proposed allowing dissenting creditors, including banks and financial institutions, to pursue independent remedies for recovering their debts.

Puri rejected the plan after finding serious defects in the process followed by the resolution professional.

The matter was then referred to a third member, Judicial Member Nilesh Sharma, under Section 419(5) of the Companies Act, 2013.

On August 25, Sharma held that the plan should be approved. However, he directed the exclusion of claims submitted through Anil Kumar on behalf of 960 individuals and Sunil Jain on behalf of 300 individuals. He also directed that the amount allocated to these claims be redistributed among the remaining eligible creditors.

Sharma further held that the approved plan would bind all creditors, including those who had opposed it, under Section 115 of the IBC.

When the matter returned to the original two-member bench, it held on August 31 that no majority view had emerged from the third member. The bench noted that the Technical Member had rejected the plan, the Judicial Member had sought to confine it to supporting creditors and the third member had approved it while making it binding on all creditors.

Since all three judgments were different, the matter was referred afresh to the NCLT President who constituted the present five-member bench.