Subhash Chandra’s Rs 6.25 Crore Repayment Plan Put on Hold by NCLT

Subhash Chandra’s personal insolvency proceedings have hit another hurdle after the National Company Law Tribunal (NCLT) put its earlier approval of his Rs 6.25-crore repayment plan on hold.

A five-member special bench of the NCLT has stayed the operation of the August 25 order that had approved the repayment proposal. Until the matter is reconsidered, the plan cannot be implemented.

The tribunal has also barred Chandra from directly or indirectly selling or transferring his properties while the case is being heard.

The latest development follows differences within the earlier NCLT proceedings over whether Chandra’s repayment plan should be approved and how it should apply to creditors.

The case was initially heard by a two-member bench. One member supported the repayment proposal but suggested that it should apply only to creditors who voted in its favour. The other member rejected the plan, citing concerns over the process followed by the resolution professional.

Because of the disagreement, the matter was referred to a third member.

On August 25, the third member approved Chandra’s repayment plan. The proposal involved paying Rs 6.25 crore against admitted claims amounting to Rs 22,006.57 crore.

Certain claims submitted through Anil Kumar on behalf of 960 individuals and through Sunil Jain on behalf of 300 individuals were excluded from the approved plan. The amount associated with those claims was to be redistributed among other eligible creditors.

The third member also held that the repayment plan would be binding on all creditors, including those who had voted against it.

The matter subsequently returned to the original two-member bench. On August 31, the bench concluded that there was no majority view among the three opinions.

Following the continued disagreement, the matter was referred to the NCLT President, who constituted a five-member special bench to examine the case.

For Chandra, the stay means the Rs 6.25-crore repayment proposal cannot currently move ahead. The earlier approval remains on hold while the special bench considers the conflicting views.

The tribunal has separately directed Chandra, in his capacity as a guarantor, not to alienate his properties. This means he cannot sell or transfer them either directly or indirectly during the proceedings.

The Rs 22,006.57-crore figure represents admitted claims in Chandra’s personal insolvency proceedings. It does not mean that he personally borrowed Rs 22,000 crore from banks.

Chandra has maintained that the claims arise from personal guarantees he provided for loans taken by companies associated with the Essel Group.

The insolvency proceedings were initiated by Indiabulls Housing Finance under Section 95 of the Insolvency and Bankruptcy Code.

Under the proposed repayment plan, Chandra offered Rs 6.25 crore to creditors, in addition to Rs 25 lakh towards insolvency process costs.

The five-member special bench will now examine the matter afresh and consider the differing opinions from the earlier proceedings.

For now, the repayment plan has neither been finally rejected nor cleared for implementation. Its future will depend on the proceedings before the special bench, while restrictions on Chandra’s properties remain in place.