Five-member NCLT bench freezes Subhash Chandra's Rs 6.25 crore plan against Rs 22,007 crore of claims

The National Company Law Tribunal on Tuesday stopped Zee Group founder Subhash Chandra from treating a Rs 6.25 crore repayment plan as binding. A newly formed five-member bench, headed by NCLT President Justice (retd) Anupinder Singh Grewal, stayed the 25 August order that had approved the plan against admitted creditor claims of Rs 22,006.57 crore.

The bench said the opinion of the third member, Nilesh Sharma, cannot be given effect because it did not amount to a majority view of the tribunal. The original two-member bench had split. Sharma was added as a tie-breaker in February and signed off on the plan last week. Grewal constituted the five-member bench on Monday evening after that split became the problem rather than the solution.

Chandra is barred from selling, transferring, alienating or encumbering his properties, directly or through anyone else, while the case is reheard. Notices have gone to all parties. The bench said it will hear them at length before deciding what, if anything, happens to the plan.

Twenty-two thousand crore against six and a quarter

The plan offers Rs 6.25 crore to creditors and Rs 25 lakh for insolvency process costs, a total of Rs 6.5 crore. The claims arise from personal guarantees Chandra gave for borrowings by Essel Group companies. Recovery at that ratio is the reason LIC Housing Finance, HDFC Bank and Union Bank of India treated the August order as an emergency.

Those lenders moved the National Company Law Appellate Tribunal the same day. Solicitor General Tushar Mehta told the NCLT that an appeal against Sharma's order was already on file. The special bench still issued its own stay, which matters because the August ruling had made the plan binding even on creditors who voted no.

Lenders have also objected to the voting process and to the role of entities they say are linked to Chandra. Those objections now return to a bench that includes Grewal, judicial members Bachu Venkat Balaram Das and Mahendra Khandelwal Das, and technical members Atul Chaturvedi and Ravindra Chaturvedi.

What the stay changes

Until 25 August, Chandra could point to an approved personal insolvency plan and argue that dissenting banks were stuck with it. That argument is off the table. Asset sales that might have funded even the Rs 6.5 crore are frozen. Creditors who want a higher recovery have a live forum again. Chandra still has a pending personal insolvency. Nothing in Tuesday's order ends that case. It only resets the decision-maker and locks the property.

Personal guarantee cases under the Insolvency and Bankruptcy Code have produced very low cash recoveries when the underlying group companies are already hollow. The Chandra file is now a test of whether a split bench plus a third member can close such a case at 0.03 percent of admitted claims, or whether a five-member court will demand a different arithmetic.

The next hearing will turn on two narrow points. Did Sharma's order ever have legal force. And can a repayment plan that most large lenders reject still bind them. Grewal's bench has said it will not implement the August text while it answers those questions.