A newly constituted five‑member bench of the National Company Law Tribunal (NCLT) in New Delhi issued a stay on Tuesday, September 1, on the approval of a repayment plan submitted by Dr. Subhash Chandra, founder of the Essel Group. The plan, which would have distributed ₹6.25 crore to creditors against admitted claims totaling ₹22,006.57 crore, was halted pending further consideration. In addition, the bench ordered that the guarantor, Dr. Chandra, may not alienate any of his properties, whether directly or indirectly.
Bench composition and immediate orders
The bench that delivered the stay was headed by NCLT President Justice Anupinder Singh. It also included Judicial Members Bachu Venkat Balara Das and Mahendra Khandelwal, together with Technical Members Atul Chaturvedi and Ravindra Chaturvedi. The bench’s directive explicitly restrained Dr. Chandra from dealing with or transferring any of his assets. Notices regarding the stay have been issued to all parties involved in the proceedings.
Background of the repayment proposal
Dr. Chandra’s proposal sought to pay ₹6.25 crore to creditors and allocate ₹25 lakh toward the costs of the insolvency process. When measured against the admitted claims of ₹22,006.57 crore, the proposal represented a haircut of nearly 99.9 percent. Despite the steep reduction, creditors holding 80.814 percent of the voting share voted in favour of the plan, satisfying the statutory voting threshold under the Insolvency and Bankruptcy Code, 2016 (IBC).
Procedural history leading to the five‑member bench
The matter originally came before a two‑member NCLT bench comprising Judicial Member Ashok Kumar Bhardwaj and Technical Member Reena Sinha Puri. The two members could not reach a majority view on the plan’s validity and scope, resulting in a deadlock. Under Section 419(5) of the Companies Act, 2013, the case was referred to a larger bench because of the differing opinions.
A third member, Judicial Member Nilesh Sharma, was appointed to break the tie. In an order dated August 25, Sharma favoured approval of the repayment plan, noting that the required voting threshold had been met. He observed that opposition from a subset of creditors or concerns about Dr. Chandra’s financial dealings could not alone invalidate the proposal. Sharma also examined claims from 960 individuals represented by Anil Kumar and 300 individuals represented by Sunil Jain. He concluded that those claims were admitted based solely on verbal assurances from Dr. Chandra and lacked supporting material, but he determined that these irregularities did not undermine the insolvency proceedings as a whole. He further held that, once approved, the repayment plan would bind all creditors, including dissenting ones.
When the matter returned to the original two‑member bench, it noted that the third member had issued an independent order rather than resolving the specific points of disagreement between the original members. The resulting impasse prompted the referral to the newly constituted five‑member bench, which subsequently stayed the plan and imposed the asset‑restriction order.
Implications of the stay
The stay effectively pauses any distribution of the ₹6.25 crore to creditors until the five‑member bench resolves the outstanding legal questions. By restraining Dr. Chandra from alienating his properties, the bench seeks to protect the guarantor’s assets from potential dissipation while the case is under review. Solicitor General Tushar Mehta, appearing on behalf of the creditors, had specifically sought protection against alienation of the guarantor’s assets, a request that the bench incorporated into its order.
The case is formally titled “Indiabulls Housing Finance Limited vs Dr Subhash Chandra” and is recorded under case number IB-97/ND/2022. The outcome of the bench’s deliberations will determine whether the minimal repayment plan can proceed or whether a revised proposal must be crafted to satisfy both the statutory requirements of the IBC and the concerns raised by dissenting creditors and the technical member of the original bench.
Stakeholders, including the Essel Group, the creditor consortium, and regulatory observers, will be closely monitoring the next steps of the NCLT’s five‑member bench, as the decision carries significant ramifications for insolvency practice and creditor recoveries in high‑profile corporate restructurings.
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