Subhash Chandra Challenges NCLT’s Decision at NCLAT
Zee Group founder Subhash Chandra has initiated legal action by filing an appeal with the National Company Law Appellate Tribunal (NCLAT). This move is in response to the National Company Law Tribunal’s (NCLT) decision on September 1, which prevents him from alienating his assets.
The appeal was presented before a bench of the NCLAT, led by Officiating Chairperson Justice (retd) Yogesh Khanna and Technical Members Barun Mitra and Ajai Das Mehrotra. The tribunal instructed Chandra to distribute copies of the appeal to his creditors and scheduled the next hearing for September 29.
Senior Advocate Dhurv Mehta, representing Chandra, informed the NCLAT that the appeal contests the NCLT’s special bench ruling from September 1. Despite this, several creditors claimed they had not received the appeal copies or were not included as parties, despite their involvement in the NCLT proceedings. Consequently, the NCLAT directed Chandra to provide the necessary documents to all involved parties and to include the necessary entities in the proceedings.
The Dispute: Insolvency and Bankruptcy Code (IBC) Proceedings
The core of the legal dispute revolves around a repayment plan proposed by Chandra within the framework of personal insolvency proceedings initiated by Indiabulls Housing Finance Limited under Section 95 of the Insolvency and Bankruptcy Code (IBC). Chandra’s plan seeks to repay creditors ₹6.25 crore against acknowledged claims totaling ₹22,006.57 crore, along with an additional ₹25 lakh earmarked for insolvency process costs.
The initial assessment of the plan was by an NCLT bench comprising Judicial Member Ashok Kumar Bhardwaj and Technical Member Reena Sinha Puri, who delivered conflicting opinions. Bhardwaj was in favor of approving the plan for supportive creditors while allowing dissenting creditors, including banks and financial institutions, to pursue independent recovery actions. Conversely, Puri dismissed the plan, citing significant procedural flaws identified by the resolution professional.
Further Legal Proceedings
Following the disagreement, the matter was escalated to Judicial Member Nilesh Sharma as per Section 419(5) of the Companies Act, 2013. On August 25, Sharma approved the plan with modifications, excluding claims submitted by Anil Kumar and Sunil Jain on behalf of 960 and 300 individuals, respectively. He ordered the redistribution of allocated amounts to eligible creditors and declared that the plan would bind all creditors under Section 115 of the IBC.
Upon returning to the original two-member bench, it was noted on August 31 that no majority consensus had been reached. With varied judgments from the members, the matter was referred to the NCLT President, who established a five-member bench to review the case. This larger bench issued an injunction against Chandra from alienating assets and stayed his proposal to repay ₹6.25 crore against the admitted claims.
This decision prompted Chandra to seek recourse with the NCLAT. The case has seen legal representation from notable figures such as Solicitor General Tushar Mehta representing public sector entities, and Advocate Diwakar Maheshwari from Khaitan & Co representing IndusInd Bank.
