Subhash Chandra approaches NCLAT challenging NCLT order restricting asset transfers

Zee Group founder Subhash Chandra has approached the National Company Law Appellate Tribunal (NCLAT) challenging an order passed by a five-member special bench of the National Company Law Tribunal (NCLT), which restricted him from selling, transferring or otherwise dealing with his assets. The appeal relates to the NCLT's September 1 order issued during Chandra's personal insolvency proceedings. The NCLAT bench, comprising Officiating Chairperson Justice (retd) Yogesh Khanna and Technical Members Barun Mitra and Ajai Das Mehrotra, took up the matter and directed Chandra to provide copies of the appeal to the creditors involved in the proceedings. The case has been listed for further hearing on September 29.

Senior Advocate Dhruv Mehta, appearing for Chandra, told the appellate tribunal that the appeal specifically challenges the September 1 order passed by the special five-member NCLT bench. During the hearing, several creditors informed the NCLAT that they had either not received copies of the appeal or had not been formally included as parties, despite having participated in the proceedings before the NCLT. Taking note of their submissions, the appellate tribunal directed Chandra's legal team to provide copies of the appeal to all parties appearing before it and complete the necessary steps to implead the required parties.

The dispute arises from personal insolvency proceedings initiated against Chandra by Indiabulls Housing Finance Limited under Section 95 of the Insolvency and Bankruptcy Code (IBC). Under a repayment proposal submitted by Chandra, creditors were offered Rs 6.25 crore against admitted claims amounting to Rs 22,006.57 crore. The proposal also provided Rs 25 lakh towards expenses related to the insolvency resolution process.

The repayment proposal was initially examined by a two-member NCLT bench comprising Judicial Member Ashok Kumar Bhardwaj and Technical Member Reena Sinha Puri. The two members, however, arrived at differing views on the proposed repayment plan, after which the matter was referred to a larger five-member special bench.

The larger NCLT bench subsequently stayed the operation of an August 25 order concerning the repayment plan. It also directed that Chandra, in his capacity as guarantor, should not sell, transfer, alienate or otherwise deal with his assets, either directly or indirectly, while the insolvency proceedings remain pending. The five-member bench has separately sought a response from the Central Bureau of Investigation (CBI) within four weeks, observing that the agency's investigation could have a bearing on the insolvency proceedings. Chandra's legal team had opposed the move to make the CBI a party to the proceedings.

The latest appeal before the NCLAT is focused on the September 1 restriction preventing Chandra from dealing with his assets. The appellate tribunal will consider the matter further on September 29 after the relevant parties have received copies of the appeal and the required parties have been formally impleaded.

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