The National Company Law Appellate Tribunal (NCLAT) on Tuesday issued notices to creditors on Essel Group Chairman Subhash Chandra’s appeal against a stay on his personal insolvency settlement. It listed the interim relief applications for hearing on October 29 and 30.
Chandra is challenging a September 1 order of a five-member special bench of the National Company Law Tribunal (NCLT). The order stayed the ruling of the tie-breaker member and restrained him from alienating his assets. That bench was led by NCLT President Justice Anupinder Singh Grewal. He has also questioned the constitution of the bench itself. His counsel has argued that the NCLT has no power to form a five-member bench.
A three-member NCLAT bench, comprising Officiating Chairperson Justice (Retd.) Yogesh Khanna and Technical Members Barun Mitra and Ajai Das Mehrotra, directed the creditors to file their replies within a week. The creditors have opposed the maintainability of Chandra’s petition. Chandra has been given a week after that to file a rejoinder. “Let the notice be issued… will file the reply (over maintainability and stay) within a week,” the bench said.
At the request of Solicitor General Tushar Mehta, who appears for some of the creditors, the NCLAT clubbed Chandra’s appeal with a separate plea by creditors. That plea challenges the NCLT order approving the settlement, under which about ₹6.5 crore would be paid against admitted claims of around ₹22,006.57 crore. LIC Housing Finance, Canara Bank and Union Bank had earlier moved the NCLAT against that order.
The tribunal indicated that one day of the hearing would go to Chandra’s arguments and the other to the creditors. Mehta suggested waiting for the next hearing of the five-member NCLT bench on November 19. Advocate Dhruv Mehta, appearing for Chandra, opposed this.
In February, a two-member NCLT bench differed on whether Chandra’s repayment plan would bind creditors who had voted against it. Member (Judicial) Ashok Kumar Bhardwaj approved the ₹6.5 crore plan and held that Chandra was eligible for relief under the insolvency framework for personal guarantors. Member (Technical) Reeta Kohli rejected it.
The split led to a reference under Section 419(5) of the Companies Act, 2013, which provides for referring points of difference to additional members for a majority decision.
Member (Judicial) Nilesh Sharma, the third member, concurred with Bhardwaj and upheld the plan. He held that it would bind dissenting creditors as well. The plan proposed settling claims of around ₹22,006 crore, arising from personal guarantees, for about ₹6.5 crore. The five-member bench then stayed the operation of Sharma’s order.
At its last hearing on September 23, the five-member bench issued notice to the CBI and said its interim direction restraining Chandra from alienating property would continue until it gives a final decision. It said the CBI’s investigation could have a bearing on the proceedings.
The CBI has registered an FIR against Chandra for allegedly inflating his net worth to obtain loans from LIC Housing Finance Ltd (LICHFL) and then defaulting, causing the public-sector lender a loss of more than ₹1,322 crore. LICHFL’s complaint, now part of the FIR, alleges that Chandra’s net-worth certificates were used to secure approval and disbursal of two loans totalling ₹980 crore.
Published on September 29, 2026
