Breather for creditors: New NCLT bench stays the approval of a repayment plan proposed by Subhash Chandra

Mumbai: A special five-member bench of the National Company Law Tribunal (NCLT) on Tuesday stayed the approval of a repayment plan proposed by . The tribunal also restrained the Essel Group founder and chairman from alienating any asset. The newly constituted bench, presided over by Justice Anupinder Singh Grewal, stayed operation of a smaller bench’s order passed last Tuesday.

All concerned parties were issued notice. Ahead of the tribunal’s direction, solicitor general Tushar Mehta, appearing for a few dissenting , sought protection against alienation of the guarantor’s assets. Subsequently, the bench in an oral order said, “We also direct that the guarantor shall not alienate the properties either directly or indirectly.”

Alienation refers to the legal transfer of ownership, rights, or control of an asset from one party to another. The bench also comprised judicial members Bachu Venkat Balaram Das and Mahendra Khandelwal, and technical members Atul Chaturvedi and Ravindra Chaturvedi.

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NCLT president Justice Grewal on Monday issued a notification under Section 419(5) of the Companies Act, 2013, to constitute the five-member bench to hear the case afresh.

Creditors see Chandra as guarantor for Rs 22,006 crore borrowed by his various group companies, something the Essel chairman disputes, and has elaborated on in an interview with ET. Dissenting creditors are objecting to the proposed repayment plan that includes a payment of Rs 1,494 crore by the principal borrowers and Rs 6.25 crore by Chandra as personal guarantor.

Last week, NCLT judicial member Nilesh Sharma, ruling as a third member, approved the repayment plan proposed by Chandra under Section 114 of the and rejected the dissenting lenders’ objections. Earlier, two members of the tribunal had given a split verdict, after which the president of the forum appointed Sharma as the third member.

, , , , IDBI Trusteeship (Franklin Templeton) and (UK) Ltd dissented. Chandra’s office on Tuesday said in a statement, “We have complete faith and confidence in our judicial system.”