NCLT Forms Special Bench to Reconsider Subhash Chandra Repayment Plan

The National Company Law Tribunal has created a five-member special bench to revisit Subhash Chandra’s repayment plan, hours after an appeals court agreed to hear complaints from lenders in the case.

The Delhi bench said its previous three-member panel could not agree on how the plan should operate. One member supported applying it only to creditors that backed the proposal, leaving dissenting banks and financial institutions free to pursue separate recovery proceedings. Another member said it should bind all creditors, including those that opposed it.

The tribunal said the competing views would produce different consequences for dissenting creditors. Because no majority position had emerged, it said it could not issue an order and referred the matter to the NCLT president under Section 419(5) of the Insolvency and Bankruptcy Code.

The new panel will be headed by NCLT president Justice Anupinder Singh Grewal. Judicial members Bachu Venkat Balaram Das and Mahendra Khandelwal Das, along with technical members Atul Chaturvedi and Ravindra Chaturvedi, are scheduled to hear the matter on Tuesday.

The case concerns Chandra’s liability as a personal guarantor for loans taken by companies linked to the Essel and Zee groups. Chandra has said he gave personal guarantees but did not personally borrow the money.

A third member had approved the repayment plan on Aug. 25. The proposal received support from creditors holding 80.81% of the debt by value, but HDFC Bank, Axis Bank, Canara Bank, RBL Bank and Union Bank of India voted against it. The lenders’ challenge adds another legal hurdle to a plan involving a payment of ₹6.5 crore against the much larger original claims.

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All said and done, no majority view has emerged in the matter. In the wake, no order can be passed at this stage. Resultantly, we have no option but to make fresh reference to Hon’ble President in terms of the provisions of Section 419(5) of the Code.