Subhash Chandra's ₹6.25-crore repayment plan hits hurdle; NCLT forms 5-member bench to decide insolvency case

The National Company Law Tribunal (NCLT) has constituted a five-member bench to decide the personal insolvency case against Zee Group founder Subhash Chandra after a two-member bench held that no majority opinion had emerged on his repayment plan, Bar & Bench reported.

The development concerns Chandra's proposal to pay ₹6.25 crore to creditors against admitted claims of ₹22,006.57 crore.

NCLT President Justice (retd) Anupinder Singh Grewal has constituted the five-member bench comprising himself, Judicial Members Bachu Venkat Balaram Das and Mahendra Khandelwal, and Technical Members Atul Chaturvedi and Ravindra Chaturvedi.

The special bench will hear the matter at 10.15 am on September 1, according to the report.

Why was the matter referred to a larger bench?

On August 31, a two-member bench comprising Judicial Member Ashok Kumar Bhardwaj and Technical Member Reena Sinha Puri held that no final order could be passed based on the opinion delivered by third member Nilesh Sharma on August 25.

According to Bar & Bench, the two-member bench found that the three members had taken materially different positions on Chandra's repayment plan.

Bhardwaj had originally favoured approving the plan only in relation to creditors who supported it. He had proposed allowing dissenting creditors, including banks and financial institutions, to continue pursuing independent remedies for recovery of their debts.

Puri, however, rejected the repayment plan after finding serious defects in the process followed by the resolution professional.

What did the third member decide?

Following the split verdict, the matter was referred to Judicial Member Nilesh Sharma under Section 419(5) of the Companies Act, 2013.

On August 25, Sharma opined that the repayment plan should be approved. However, he excluded claims submitted through Anil Kumar on behalf of 960 individuals and Sunil Jain on behalf of 300 individuals.

Sharma directed the resolution professional to redistribute the amount allotted to these claims among the remaining eligible creditors.

When the matter returned to the original two-member bench, it held that Sharma had "consciously passed an independent order" rather than agreeing entirely with either of the two original opinions.

LIC Housing Finance challenges August 25 order

Meanwhile, LIC Housing Finance has challenged Sharma's August 25 order before the National Company Law Appellate Tribunal (NCLAT).

Solicitor General Tushar Mehta sought an urgent hearing on August 31, arguing that allowing the order to continue would defeat the purpose of the Insolvency and Bankruptcy Code (IBC).

The appeal is also scheduled to be heard on September 1.