5-member NCLT bench to hear Indiabulls plea against Chandra

NEW DELHI: In a virtually unprecedented development, National Company Law Tribunal (NCLT) president Justice Anupinder Singh Grewal on Monday constituted a five-member bench headed by him to hear Indiabulls Housing Finance’s insolvency plea against Subhash Chandra, involving guarantees offered by him to lenders.The bench will hear the case on Tuesday, the same day that the National Company Law Appellate Tribunal (NCLAT) hears the challenge to the NCLT order that approved a Rs 6.5 crore payment by the Essel Group chairman over creditor claims of about Rs 22,007 crore in his personal insolvency resolution process.On Monday, Solicitor General Tushar Mehta, appearing for LIC Housing Finance, mentioned the matter before an NCLAT bench and sought an urgent hearing in the second half of the day.Mehta, who also represented public sector players Canara Bank and Union Bank, said that if the order is allowed to continue, it will “defeat the very purpose of the Insolvency & Bankruptcy Code”.Earlier, in NCLT, the matter was referred to the third member, as the two-member division bench of Ashok Kumar Bhardwaj (member judicial), and Reena Sinha Puri (member technical), gave a split verdict on the repayment plan.The third member’s order of Aug 26, backing the repayment plan, has been sent back to the original division bench for a formal order in line with the majority opinion, as required under the Companies Act, 2013.However, the division bench of Ashok Kumar Bhardwaj and Reena Sinha Puri on Monday said no majority view has emerged despite reconsidering the matter, following a differing opinion from a third member of the tribunal, and referred it back to NCLT President.“While member (technical) rejected the plan, member (judicial) confined the plan to those who accepted and approved it and accorded liberty to dissenting creditors to recover their debt. He did not extinguish the claim of banks/financial institutions/dissenting creditors qua principal debtor/debtor/PG.The third member approved the plan but extinguished the right of all the creditors by applying Section 115(1) of the Code uniformly,” it said.The fast-paced developments that come days after the role of lenders came under scrutiny means that Chandra has to brace for a long battle ahead.Get the latest Business News and Live updates. Download the TOI app.