The National Company Law Tribunal (NCLT) constituted a five-member bench in a case related to Subhash Chandra’s personal insolvency proceedings on Monday. The bench will decide on the payment of ₹6.5 crore. The case involves claims exceeding ₹22,000 crore.
The bench will begin hearing the matter at 10:15 a.m. on Tuesday in the NCLT’s Principal Bench. The two-member bench had been unable to reach a majority decision on the resolution plan. The matter was subsequently referred to the NCLT president for a fresh hearing.
This is the first time in the NCLT’s history that a five-member bench has been constituted. The bench will be headed by President Justice Anoopinder Singh Grewal. Its other members are Bachu Venkata Balaram Das, Mahendra Khandelwal, Atul Chaturvedi, and Ravindra Chaturvedi.
Two-member bench gives differing opinions
Earlier, the two members of the NCLT bench had differing opinions regarding the repayment plan. Therefore, the matter was referred to a third member. On August 26, the third member approved the repayment plan of ₹6.5 crore.
In his order, Ashok Kumar Bhardwaj had stated that the plan would apply only to those creditors who had voted in its favor. Such creditors accounted for approximately 80.8%.
He allowed the dissenting banks and financial institutions to recover their loans separately from Subhash Chandra. They accounted for approximately 19.2%.
After that, the matter was referred to a two-member bench for issuing the final order based on the majority opinion. This process is required under Section 419(5) of the Companies Act, 2013.
The bench said that the judicial member had not extinguished the principal debt owed to banks, financial institutions, and dissenting creditors. Meanwhile, the third member, while approving the payment plan, extinguished the rights of all creditors under Section 115(1).
Dissenting creditors approached NCLAT
On Monday, Subhash Chandra’s dissenting creditors approached the NCLAT as a precautionary measure. They appealed against the third member’s decision, which approved a payment of ₹6.5 crore against debt claims of approximately ₹22,006.57 crore.
Solicitor General Tushar Mehta presented the case before the NCLAT on behalf of LIC Housing Finance. Acting Chairperson Justice Yogesh Khanna was also part of the bench. Mehta sought an immediate hearing of the matter.
Mehta also argued on behalf of Canara Bank and Union Bank. He said that if this order remains in force, it would defeat the very purpose of the Insolvency and Bankruptcy Code (IBC).
