NCLT has stayed its August 25 order approving Chandra’s repayment plan, which proposed ₹6.25 crore against admitted creditor claims of ₹22,006.57 crore.
The tribunal will hear the matter afresh, after the original two-member Bench delivered split opinions on whether the plan should be approved and whether dissenting creditors could pursue separate recovery.
Chandra has been barred from alienating his properties while the case is reconsidered, suspending the earlier ruling that made the repayment plan binding on all creditors.
NCLT Stays Subhash Chandra’s Insolvency Plan: What Happens To ₹22,000-Crore Claims?
The NCLT has put Subhash Chandra’s personal insolvency repayment plan on hold, reopening the case after finding that earlier orders did not reflect a clear majority view
Subhash Chandra
Summary
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The National Company Law Tribunal (NCLT) on Tuesday stayed its August 25 order approving a repayment plan proposed by Zee Group founder Subhash Chandra, saying the matter needs to be reconsidered.
The five-member NCLT Bench said the earlier orders did not reflect a clear majority view and decided to hear the case afresh. It also issued notices to all parties and directed Chandra not to sell, transfer or otherwise alienate any of his properties, directly or indirectly, while the matter is being reconsidered.
The stay effectively suspends the earlier decision, which had made Chandra’s repayment proposal binding even on creditors who had voted against it.
Under the proposed plan, Chandra offered to pay ₹6.25 crore against admitted creditor claims of ₹22,006.57 crore. A further ₹25 lakh was proposed to meet insolvency-related expenses.
Split Bench Ruling
The case was initially heard by a two-member NCLT Bench comprising Judicial Member Ashok Kumar Bhardwaj and Technical Member Reena Sinha Puri.
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The two members delivered differing views on Chandra’s repayment proposal.
Bhardwaj supported approval of the plan, but proposed that it should apply only to creditors who had voted in its favour. He also suggested that dissenting creditors, including banks and financial institutions, should remain free to pursue separate recovery proceedings for their outstanding dues.
Puri, however, opposed the proposal and rejected it, pointing to what she described as serious procedural shortcomings in the process followed by the resolution professional.
With the two members unable to reach a common decision, the matter was referred to a third member.
Third Member Decision
The case was subsequently placed before Judicial Member Nilesh Sharma under Section 419(5) of the Companies Act, 2013.
In his August 25 order, Sharma approved Chandra’s repayment plan. However, he excluded claims submitted by Anil Kumar on behalf of 960 individuals and those submitted by Sunil Jain on behalf of 300 individuals.
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Sharma directed that the amounts earmarked for those excluded claims be redistributed among the other eligible creditors.
He also ruled that the approved repayment plan would be binding on all creditors, including those who had opposed it, under Section 115 of the Insolvency and Bankruptcy Code.
Tuesday’s order puts that decision on hold, with the NCLT now set to reconsider the matter after issuing notices to all concerned parties. Chandra has also been restrained from alienating his properties until the tribunal reaches a fresh decision.