NCLT stays order on Subhash Chandra's Rs 6.25-crore repayment plan; bars alienation of guarantor's property

The five-member bench, headed by NCLT President Justice (retd) Anupinder Singh Grewal, also directed that the guarantor shall not sell, transfer, alienate, encumber or otherwise deal with his properties, either directly or indirectly, during the pendency of the proceedings.

The legal battle over Zee Group founder Subhash Chandra's personal insolvency proceedings took a fresh turn on Tuesday after the newly constituted five-member bench of the National Company Law Tribunal (NCLT) stayed the operation of the August 25 order approving his Rs 6.25-crore repayment plan against admitted creditor claims of Rs 22,006.57 crore. The five-member bench, headed by NCLT President Justice (retd) Anupinder Singh Grewal, also directed that the guarantor shall not sell, transfer, alienate, encumber or otherwise deal with his properties, either directly or indirectly, during the pendency of the proceedings.

The bench issued notices to all parties, including Chandra, and sought their replies. It further made it clear that the August 25 judgment cannot be given effect to at this stage and that all parties would be heard at length before the matter is taken forward. The development came after the original two-member NCLT bench comprising Judicial Member Ashok Kumar Bhardwaj and Technical Member Reena Sinha Puri held that no majority opinion had emerged on the repayment plan. The matter had reached the five-member bench after third member, Nilesh Sharma, on August 25, gave an opinion favouring approval of the plan, but the original members subsequently found that the three members had taken materially different positions.

Chandra's repayment proposal provides for Rs 6.25 crore to creditors, besides Rs 25 lakh towards insolvency resolution process costs, against admitted claims of Rs 22,006.57 crore. The plan had faced strong opposition from several lenders, who questioned the extremely low recovery and raised objections concerning the voting process and the participation of entities allegedly linked to Chandra. The matter also reached the National Company Law Appellate Tribunal (NCLAT), where Solicitor General Tushar Mehta appeared for the dissenting creditors. Mehta informed the appellate tribunal about the latest development before the NCLT, including the constitution of the five-member bench and its decision to stay the operation of the August 25 order.

Mehta requested the NCLAT to grant him time until Wednesday to decide whether, in view of the latest developments before the NCLT, the creditors would press the appeal before the appellate tribunal. The NCLAT on Monday agreed to hear the creditors' challenge to the NCLT order after Mehta sought urgent listing, arguing that allowing the August 25 order to operate could defeat the purpose of the Insolvency and Bankruptcy Code.

The insolvency proceedings against Chandra relate to personal guarantees furnished by him for borrowings of Essel Group-linked companies. Indiabulls Housing Finance, now known as Sammaan Capital, had initiated proceedings against him in 2022 after a loan extended to Vivek Infracon turned bad. The insolvency plea was admitted in 2024, with several other creditors subsequently participating in the proceedings. (ANI)