Subhash Chandra opposes five-member NCLT panel as lenders’ appeal remains pending in NCLAT | Today’s news
Zee Group founder Subhash Chandra on Wednesday opposed the National Company Law Tribunal’s (NCLT) decision to set up a five-judge bench to hear his personal insolvency case again, questioning the legal basis for expanding the bench after three members expressed differing views on his repayment plan.
Chandra’s counsel argued that Section 419(5) of the Companies Act, which deals with differences of opinion among members of the tribunal, does not give the NCLT the power to constitute a five-member bench.
“The ambit of Section 419(5) is very limited… It does not empower the NCLT under the IBC or company law to constitute a five-judge bench,” argued Chandra’s counsel.
Chandra’s counsel also opposed the move to rehear the entire case. He argued that the earlier order approving the installment plan could not be set aside. He also challenged the five-judge bench that stayed the order of the third member of the bench (Nilesh Sharma) approving the repayment plan.
The National Company Law Appellate Tribunal (NCLAT) has kept the lender’s challenge against Subhash Chandra’s repayment plan pending. The Appellate Tribunal decided not to entertain the appeal for now, allowing the lenders to keep their challenge alive as the NCLT hears the matter again after constituting a five-judge bench.
After hearing the arguments, the NCLAT decided to hear the matter on October 7.
On Tuesday, a newly constituted five-member bench of the NCLT headed by President Justice Anupinder Singh Grewal clarified that the order of member Nilesh Sharma, delivered on August 25, could not take effect as it did not represent the majority view of the tribunal.
A day earlier, the appellate tribunal agreed to hear an urgent plea by several creditors challenging the NCLT Delhi’s approval of a repayment plan proposed by Zee Group founder Subhash Chandra.
Minutes after the end of the NCLT special court proceedings, Solicitor General Tushar Mehta appeared before the NCLAT for lenders including LIC Housing Finance, HDFC Bank and Union Bank of India.
Mehta asked the NCLAT to consider whether its intervention was necessary now that the NCLT stayed the earlier order.
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Liability of guarantor
The case concerns Chandra’s liability as a personal guarantor for loans taken by companies associated with Essel Group and Zee Group.
In February, a two-judge panel of the NCLT differed on whether its repayment plan would be binding on dissenting lenders. Sharma, who was brought in as a third member, approved the plan and held that it would be binding on dissenting creditors.
Government officials told Mint earlier that Fr ₹2,574 crore in claims related to loans for which Chandra had given personal guarantees when they were taken.
Chandra said that he had not personally borrowed the money and that his ₹His repayment proposal was based on 31.79 million crowns of net worth.
The dispute is also about the voting process.
Read also | NCLT stays on Subhash Chandra’s ₹6.5 crore installment plan
The creditor alleged that the resolution professional improperly admitted the claims of five entities — Veena Investments, Direct Media Distribution Ventures, World Crest Advisors, Lemonade Capital Advisors and Corpcall Capital Advisors — which together held 61.78% of the voting rights and helped approve Chandra’s repayment plan.
