NCLAT issues notice to creditors on Subhash Chandra's plea; sets next hearing for Oct 29–30

The National Company Law Appellate Tribunal NCLAT on Tuesday issued notices to creditors and sought their responses on a plea filed by Essel Group Chairman Subhash Chandra challenging an NCLT order reported news agency PTI The appellate tribunal has scheduled the matter for hearing on October 29 and 30A threemember bench of NCLAT has directed the creditors who opposed the maintainability of Chandras petition among others to file their reply within a week It also granted Chandra a weeks time to file a rejoinder to the creditors replyLet the notice be issued will file the reply over maintainability and stay within a week said the bench comprising Officiating Chairperson Justice Retd Yogesh Khanna and Technical Members Barun Mitra and Ajai Das MehrotraThe appellate tribunal also clubbed a separate petition filed by creditors challenging the NCLT order that approved a settlement involving a payment of about Rs 65 crore against admitted claims of around Rs 2200657 crore with Chandras appeal at the request of Solicitor General Tushar Mehta appearing for some creditorsThe NCLAT has fixed October 29 and 30 for hearing Chandras interim relief applications The tribunal indicated that one day would be allotted for arguments on behalf of Chandra and the other for submissions from creditors as per PTIChandra had previously challenged the NCLT stay orderChandra the founder of Zee TV had earlier challenged before the appellate tribunal an order passed on September 1 by a fivemember larger bench of the National Company Law Tribunal NCLT which had stayed the previous order in his personal insolvency case and had barred him from selling his assetsSenior Advocate Sasmit Patra appearing for Chandra before the NCLAT earlier this month had termed the NCLT order faulty and wrong and had said they are not empowered to form a fivemember benchUnder which power it was stayed and when did this fivemember bench sit together What proceedings were conducted that led to this fivemember bench taking only one order Patra arguedThe fivemember bench orderThe NCLT had formed a fivemember bench that stayed the order of NCLT Member Nilesh SharmaIt is manifest that as per section 4195 of the Companies Act there is no clear majority view capable of being given effect to Therefore the order dated 25th August 2026 of the third member Shri Nilesh Sharma Member J is stayed the special bench headed by President Justice Anupinder Singh Grewal had saidWhat was the earlier NCLT orderOn August 25 the NCLT Member Judicial Nilesh Sharma ruling as a third member had approved the plan under which Chandra will pay just Rs 65 crore to settle against creditor claims of around Rs 22006 crorePrior to this two members of the NCLT had given a split verdict following which the President of the forum had appointed Sharma as a third Member in regard to the difference of opinionSharma had rejected the claims of the dissenting creditors including LIC Housing Finance which had argued that the payout was unviable and unlawfulThe proposed repayment plan entailed Chandra to settle claims arising from personal guarantees on his groups borrowings for just Rs 65 crore which meant the creditors would take a 9997 per cent haircut on the quantum of Rs 22006 crore which was owedMany creditors had opposed it on the grounds that the recovery would be a fraction of the amountWith inputs from PTI