NCLT Issues Notices in Subhash Chandra Insolvency Matter, Directs Not To Dispose of Property

New Delhi: A five-member special NCLT bench constituted to hear the personal insolvency case of Subhash Chandra on Tuesday issued notices to all the parties and directed the Essel Group Chairman not to alienate his properties, either directly or indirectly.

Last week, NCLT approved a repayment plan under which creditors are set to recover about Rs 6.25 crore from Chandra’s personal estate against claims of roughly Rs 22,006 crore.

Chandra said the Rs 22,006 crore figure had been widely misunderstood because it represented claims arising from personal guarantees he had provided for loans taken by companies associated with the Essel Group, rather than money he had personally borrowed.

The five-member bench, led by President Justice Anupinder Singh Grewal, said that since there was no majority view among the members, including the third member, there was no final order and the verdict could not be given effect to.

“Let notice be issued to all the parties,” the National Company Law Tribunal (NCLT) said.

The bench further said, “We also direct that the guarantor shall not alienate the properties, either directly or indirectly. Respectful submissions.” Justice Grewal said the bench was issuing the notice as it wanted to understand the scope of the matter and would hear all parties, including the dissenting creditors of Subhash Chandra.

“You can address your concerns, whatever they are. Then we will, around the next date, take up whatever questions have come up,” he said.

Earlier, the matter had been referred to a third member after the two-member division bench of Ashok Kumar Bhardwaj (Member, Judicial) and Reena Sinha Puri (Member, Technical) gave a split verdict on the repayment plan.

The third member’s order to recover about Rs 6.25 crore from Chandra’s personal estate against claims of roughly Rs 22,006 crore was subsequently challenged by the PSU banks, which are dissenting creditors, before the appellate tribunal, NCLAT.

Immediately after the NCLT hearing concluded on Tuesday, NCLAT took up the matter, filed by the dissenting creditors.

The National Company Law Appellate Tribunal (NCLAT) has now directed that the matter be listed on Wednesday, on the request of Solicitor General Tushar Mehta, appearing for LIC Housing Finance, Canara Bank and Union Bank, among others.

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