The National Company Law Tribunal (NCLT) has stayed an earlier order approving Zee founder Subhash Chandra ’s ₹ 6.5 crore repayment plan, reopening a challenge to a proposal opposed by several lenders.
Because it did not constitute the majority view of the tribunal, a five-member special bench of the NCLT led by president Justice Anupinder Singh Grewal clarified that the order of member Nilesh Sharma, delivered on 25 August, could not be given effect.
The next hearing is scheduled for 23 September. Chandra’s plan proposed payment of ₹ 6.5 crore, of which ₹ 6.25 crore will go to creditors and ₹ 25 lakh towards insolvency process costs. It received 80.81% support from creditors by value.
The outcome will determine the future of Chandra’s proposal, which seeks to settle claims linked to personal guarantees he provided for corporate borrowings. The issue is whether the repayment plan is binding on creditors who opposed it. “NCLT ordinarily functions through single-member benches for routine matters or two-member division benches – one judicial, one technical – as the norm.
The NCLT issued notices to the parties and said it will hear them at length before taking a decision on the repayment plan. “We have complete faith and confidence in our judicial system,” Chandra’s office said in response to Mint’s query. Sharma said the plan would be binding on dissenting creditors. The setting up of such a large special bench is unprecedented in the NCLT’s history, according to insolvency lawyers. “This is the first time in NCLT’s history that a bench of this size has been constituted,” said Anshul Verma, a partner at SKV Law Offices. Somdutta Bhattacharyya, a partner at Argus Partners, said the development was unusual, although there was no legal difficulty in the tribunal reconsidering the matter. “There has been a lot of public discourse and hype around the matter, which may have prompted the NCLT to constitute a five-member bench,” Bhattacharyya said. Managing partner at Rajani Associates, the case shows that the commercial value of a repayment plan cannot substitute for a legally sound process, which must ultimately produce a clear and reasoned majority view, according to Akshaya Bhansali.
