The legal battle over Zee founder Subhash Chandra’s personal insolvency proceedings has been pushed into another round, with the National Company Law Appellate Tribunal (NCLAT) deferring the matter to October 7, reported The Economic Times.
The latest development comes after Chandra’s counsel challenged the constitution of a five-member special bench of the National Company Law Tribunal (NCLT) that is currently examining his repayment plan.
At the centre of the dispute is a repayment plan under which creditors would recover about Rs 6.25 crore from Chandra’s personal estate against admitted claims of roughly Rs 22,006 crore.
Chandra’s counsel has questioned the constitution of the .
The issue comes after the NCLT’s earlier two-member bench delivered differing views on the proposed repayment plan. The matter was subsequently referred to a third member, who approved the plan providing for recovery of around Rs 6.25 crore from Chandra’s personal estate.
Major lenders, including Union Bank of India, Canara Bank and LIC Housing Finance, have challenged the third member’s order before the NCLAT.
The appellate tribunal has now deferred the proceedings to October 7.
The repayment plan had already run into a fresh hurdle at the NCLT.
On Tuesday, a five-member special bench issued notices to all parties and put the operation of the repayment plan on hold. It also directed , either directly or indirectly.
The special bench said there was no majority view on the proposed repayment plan and that no final order could therefore be given effect to at that stage.
The bench said it wanted to examine the scope of the dispute and hear all parties, including creditors who had opposed the plan.
The case began with a disagreement within the two-member NCLT division bench over Chandra’s repayment plan.
With the two members taking different positions, the matter was referred to a third member.
The third member subsequently approved the repayment plan under which creditors would receive around Rs 6.25 crore against admitted claims of approximately Rs 22,006 crore.
Dissenting creditors, including public sector lenders, then moved the NCLAT against that order.
The constitution of the five-member NCLT special bench has now itself become part of the legal challenge.
Chandra has maintained that the Rs 22,006-crore figure should not be understood as money that he personally borrowed.
His position is that the claims stem from personal guarantees he had provided for loans taken by companies associated with the Essel Group.
The distinction is important because the insolvency proceedings concern Chandra in his capacity as a personal guarantor for corporate borrowings, rather than loans that he has said he personally took.
The immediate next date is October 7, when the NCLAT is scheduled to take up the matter.
Until then, the repayment plan remains under challenge, while the five-member NCLT bench’s direction preventing Chandra from alienating his properties remains part of the proceedings.
The NCLT is also expected to hear the parties on the issues surrounding the repayment plan and the differing views that led to the constitution of the special bench.