NCLT Forms 5-Member Bench for Subhash Chandra Insolvency Case
By Business Desk
India’s NCLT forms its first 5-member bench to adjudicate Subhash Chandra’s personal insolvency case amid a significant creditor claim disparity.
The National Company Law Tribunal (NCLT) has established an unprecedented five-member bench to decide media baron Subhash Chandra’s personal insolvency case. This landmark move follows a split verdict from a two-member division bench concerning Chandra’s proposed ₹6.5 crore repayment plan against creditor claims exceeding ₹22,000 crore.
The previous division bench referred the case against the Essel Group Chairman to the tribunal’s president for fresh adjudication after failing to reach a majority consensus, even after consulting a third judge. This unique situation necessitated the formation of a larger bench to ensure a definitive resolution.
Key Financial Discrepancies
- Subhash Chandra’s proposed repayment plan offers ₹6.5 crore.
- Admitted creditor claims total approximately ₹22,006.57 crore.
- 80.8% of creditors voted in favor of the repayment plan.
- 19.2% of creditors dissented, challenging the proposed payout.
- The proposed payment includes ₹6.25 crore for creditors and ₹25 lakhs for process costs.
The new five-member bench, which was scheduled to commence hearings on Tuesday, is led by President Justice Anupinder Singh Grewal. Other members include Bachu Venkat Balaram Das, Mahendra Khandelwal, Atul Chaturvedi, and Ravindra Chaturvedi.
Conflicting Interpretations of IBC
The core of the legal disagreement centers on interpreting Section 79(2)(g) and Section 115(1) of the Insolvency & Bankruptcy Code (IBC), which govern repayment plan approvals. The initial Judicial Member limited the plan’s approval to the 80.8% of creditors who voted in favor.
- The Judicial Member’s interpretation allowed the 19.2% dissenting creditors to pursue independent debt recovery.
- In contrast, the Third Member’s order, dated August 26, approved the plan for all creditors, extinguishing all claims against Chandra by applying Section 115(1) uniformly.
Dissenting lenders, including LIC Housing Finance, Canara Bank, and Union Bank, have labeled the ₹6.5 crore payout as