Subhash Chandra's Insolvency Case: NCLT Issues Directives Amidst Controversy

NCLT Takes Action in Subhash Chandra's Personal Insolvency Case

New Delhi: A special five-member bench of the National Company Law Tribunal (NCLT) convened on Tuesday to address the personal insolvency case involving Subhash Chandra. The bench has issued notices to all relevant parties and has instructed the Essel Group Chairman to refrain from selling or transferring his assets, either directly or indirectly.

Recently, the NCLT approved a repayment strategy that allows creditors to recover approximately Rs 6.25 crore from Chandra's personal assets, in contrast to the total claims amounting to around Rs 22,006 crore.

Chandra clarified that the Rs 22,006 crore figure has been misinterpreted, as it pertains to claims linked to personal guarantees he provided for loans taken by companies within the Essel Group, rather than personal debts.

The bench, presided over by Justice Anupinder Singh Grewal, noted that due to a lack of consensus among the members, including the third member, no final ruling could be issued at this time.

The NCLT stated, "Let notice be issued to all the parties," emphasizing the need for a comprehensive understanding of the case.

Justice Grewal added that the bench aims to hear from all parties involved, including dissenting creditors, to address their concerns before proceeding.

Previously, the case was escalated to a third member after a split decision from a two-member division bench, which included Ashok Kumar Bhardwaj and Reena Sinha Puri, regarding the repayment plan.

The order to recover Rs 6.25 crore from Chandra's estate was contested by public sector banks, acting as dissenting creditors, before the appellate tribunal, NCLAT.

Following the NCLT session on Tuesday, the NCLAT promptly took up the case, responding to a request from Solicitor General Tushar Mehta, representing LIC Housing Finance, Canara Bank, and Union Bank, among others.