New Delhi: Zee Group founder Subhash Chandra has told the National Company Law Appellate Tribunal (NCLAT) that he has faced widespread criticism over a proposed repayment of ₹6.5 crore against admitted creditor claims of ₹22,006 crore, despite there being no final order approving the repayment plan currently in force.
Chandra’s counsel, Advocate Sasmit Patra, raised the issue during the hearing of appeals filed by Union Bank of India (UK), Canara Bank and LIC Housing Finance against the August 25 opinion of the National Company Law Tribunal (NCLT) concerning Chandra’s repayment plan. Patra alleged that the proceedings had resulted in a “media trial” that damaged Chandra’s reputation.
“The fact is that there is no order today standing in this matter. But for the last 15 days, the personal guarantor, Dr Subhash Chandra, has been vilified across this country,” Patra submitted, according to Bar & Bench.
Solicitor General Tushar Mehta, representing the appellant-lenders, objected, arguing that NCLAT proceedings should not be used to make statements intended for publication in the media.
The NCLAT said Chandra could raise the grievance before the NCLT, where the insolvency proceedings are pending, and clarified that it was not passing any order on Patra’s submission.
The hearing was before a bench comprising Officiating Chairperson Justice Yogesh Khanna and Technical Members Barun Mitra and Ajai Das Mehrotra.
Chandra questions five-member NCLT bench
Another key issue was the NCLT’s decision to constitute a five-member bench to reconsider the repayment plan.
Patra questioned whether Section 419(5) of the Companies Act permitted the NCLT to constitute such a bench. He argued that the provision had a limited scope and did not empower the tribunal to form a five-member bench to reconsider the matter.
He also questioned the basis on which the five-member bench stayed the August 25 opinion delivered by NCLT Judicial Member Nilesh Sharma, asking when the bench had convened and what proceedings had preceded the stay.
The NCLAT observed that the constitution of the five-member bench was not under challenge in the lenders’ appeals. It said Chandra could independently challenge the September 1 order if he was aggrieved.
Chandra disputes ‘divergent views’ argument
Patra also disputed the lenders’ contention that the three NCLT members who considered the repayment plan had delivered fundamentally divergent opinions.
He said Judicial Members Ashok Kumar Bhardwaj and Nilesh Sharma were aligned on Chandra’s eligibility under Section 79 of the IBC, with their primary disagreement concerning the treatment of dissenting creditors.
Bhardwaj had proposed that the plan operate against creditors who supported it while allowing dissenting lenders to pursue other recovery remedies. Sharma, meanwhile, held that the plan would bind both assenting and dissenting creditors under Section 115 of the IBC.
Patra argued that the differences did not warrant reopening all aspects of the matter, particularly since both members agreed on the eligibility question.
Lenders keep appeals pending
Solicitor General Mehta initially sought to withdraw the lenders’ appeals with liberty to revive them, arguing that immediate consideration might not be necessary after the five-member NCLT bench stayed Sharma’s opinion and decided to hear the matter afresh.
Patra opposed the move, arguing that the appeals were defective because Sharma’s opinion had not crystallised into a final NCLT order.
Mehta subsequently decided not to press the withdrawal applications and instead requested that the appeals remain pending. The NCLAT agreed and listed the matters for October 7.
The proceedings add to the legal uncertainty surrounding Chandra’s insolvency resolution process, with the repayment plan now subject to reconsideration by the five-member NCLT bench.
