The National Company Law Tribunal (NCLT) has put on hold an earlier order approving Zee founder Subhash Chandra’s Rs 6.5 crore repayment plan, bringing the proposal back under consideration after objections from several creditors.
A five-member special bench headed by NCLT president Justice Anupinder Singh Grewal said an order passed by member Nilesh Sharma on 25 August could not be implemented as it did not represent the tribunal’s majority view.
Chandra restrained from transferring assets
The special bench on Tuesday also barred Chandra from selling or transferring property held by him, either directly or indirectly, while the matter remains pending.
The direction followed an appearance by solicitor general Tushar Mehta on behalf of the creditors, who sought protection for Chandra’s assets. The tribunal has issued notices to the parties and said it will hear their arguments before deciding the fate of the repayment proposal.
The next hearing has been scheduled for 23 September.
Chandra’s office said, “We have complete faith and confidence in our judicial system.”
What Chandra’s plan proposes
The repayment proposal involves Rs 6.5 crore, with Rs 6.25 crore earmarked for creditors and Rs 25 lakh towards insolvency process costs.
The plan received 80.81 per cent support from creditors by value. Sharma had earlier held that the proposal would also be binding on creditors who voted against it.
Among those opposing the plan were LIC Housing Finance, IDBI Trusteeship Services, HDFC Bank, Axis Bank, Canara Bank, Union Bank of India (UK) and RBL Bank.
The central issue before the tribunal is whether Chandra’s repayment plan can bind creditors who did not support it.
Unusual five-member NCLT bench
The constitution of the five-member bench has drawn attention from insolvency lawyers. Anshul Verma, a partner at SKV Law Offices, described it as unprecedented in the tribunal’s history.
“This is the first time in NCLT’s history that a bench of this size has been constituted,” Verma said. “NCLT ordinarily functions through single-member benches for routine matters or two-member division benches, one judicial, one technical, as the norm.”
Somdutta Bhattacharyya of Argus Partners called the development unusual but said there was no legal difficulty in reconsidering the matter.
Meanwhile, creditors have also challenged the repayment plan before the National Company Law Appellate Tribunal (NCLAT). The NCLAT has listed the matter for Wednesday.