New Delhi [India], September 2 (ANI): The National Company Law Appellate Tribunal (NCLAT) on Wednesday kept pending an appeal filed by dissenting lenders challenging the approval of Zee Group founder Subhash Chandra's repayment plan after being informed that a newly constituted five-member bench of the National Company Law Tribunal (NCLT) had stayed the order approving the plan and would hear the matter afresh.
Solicitor General Tushar Mehta, appearing for the dissenting creditors, including LIC Housing Finance, Canara Bank and Union Bank, apprised the appellate tribunal about the latest developments before the NCLT. Mehta informed the NCLAT that the five-member Special Bench of the NCLT had stayed the August 25 order passed by the third member approving Chandra's repayment plan and would examine the matter afresh on September 23, 2026.
In view of the subsequent developments, Mehta initially requested the appellate tribunal to dispose of the appeal while granting liberty to the dissenting creditors to approach the NCLAT again if any grievances survived after the fresh proceedings before the NCLT.
However, the request was opposed by counsel appearing for Chandra, the personal guarantor, who objected to the disposal of the appeal. Counsel also submitted that the proceedings had caused damage to Chandra's reputation.
Following the objection, Mehta decided not to press the request for disposal of the appeal and instead urged the NCLAT to keep the matter pending. The Solicitor General also objected to the submissions concerning the alleged damage to Chandra's reputation, contending that the issue was not relevant to the court proceedings and that such submissions were being made for the media.
The appellate tribunal thereafter adjourned the matter for further hearing on October 7.
The latest development before the NCLAT comes after a five-member Special Bench of the NCLT, headed by its President Justice (retd) Anupinder Singh Grewal, stayed the August 25, 2026 order approving the repayment plan.
The Special Bench held that there was no clear majority view among the three members who had earlier considered the matter and, therefore, the third member's order could not be given effect to.
"It is manifest that as per Section 419(5) of the Companies Act, 2013, there is no clear majority view capable of being given effect to," the five-member bench observed.
Consequently, the tribunal stayed the August 25 order passed by Judicial Member Nilesh Sharma. The Special Bench also directed that Chandra, as the personal guarantor, shall not alienate any assets whatsoever, either directly or indirectly, during the pendency of the proceedings.
"We also direct that the personal guarantor shall not alienate any assets whatsoever either directly or indirectly," the tribunal said.
The NCLT issued notices to the parties in the pending interlocutory applications and directed them to file their replies before the next hearing. The matter has been listed before the five-member bench on September 23. The dispute over the repayment plan arose after the original NCLT Division Bench comprising Judicial Member Ashok Kumar Bhardwaj and Technical Member Reena Sinha Puri delivered dissenting judgments on September 3, 2025.
Following the difference of opinion, the matter was referred to Judicial Member Nilesh Sharma of the NCLT Mumbai Bench as the third member. Sharma pronounced his decision on August 25, 2026, approving the repayment plan, though with certain qualifications. He directed the exclusion of claims submitted through Anil Kumar on behalf of 960 individuals and Sunil Jain on behalf of 300 individuals from the final list of creditors, with consequential redistribution of the amounts among the remaining eligible creditors.
He had also held that the approved repayment plan would be binding on all creditors, whether assenting or dissenting, under Section 115 of the Insolvency and Bankruptcy Code.
However, when the matter was placed before the original bench on August 31 for passing a consequential order, it held that no majority view had emerged and made a fresh reference to the NCLT President. The President subsequently constituted the five-member Special Bench to consider the issue. The Special Bench noted that all three members had taken different positions on crucial aspects of the repayment plan.
Bhardwaj had approved the plan and held that dissenting financial creditors who participated in the voting process could pursue remedies available under law for recovery of their remaining debt. Technical Member Reena Sinha Puri, however, had rejected the plan, pointing to alleged irregularities in the process, including those concerning admission of claims and voting.
The third member, while approving the plan, had taken a different position on the treatment of creditors and the consequences flowing from the approval. The five-member bench concluded that the differing opinions did not result in a clear majority view capable of implementation.
The repayment plan proposed payment of ₹6.25 crore to creditors, besides ₹25 lakh towards insolvency resolution process costs, against admitted creditor claims aggregating ₹22,006.57 crore. Several lenders had opposed the proposal, raising objections over the recovery offered under the plan, the voting process and the participation of certain creditors.
The personal insolvency proceedings against Chandra arise from guarantees furnished by him for borrowings of Essel Group-linked companies.
Indiabulls Housing Finance, now known as Sammaan Capital, initiated proceedings against Chandra in 2022 after a loan extended to Vivek Infracon turned bad. The insolvency petition was admitted in 2024, following which several other creditors joined the proceedings. (ANI)
NCLAT keeps creditors' appeal pending in Subhash Chandra insolvency case; five-member bench to hear repayment plan afresh on September 23
