Subhash Chandra challenges NCLT's asset alienation ban at NCLAT

Zee Group founder Subhash Chandra has appealed to the NCLAT against an NCLT order freezing his assets. The NCLAT has directed him to serve copies of the petition to creditors and will hear the matter on September 29 in the insolvency case.

Subhash Chandra Challenges Asset Freeze Order

Zee Group founder Subhash Chandra has approached the National Company Law Appellate Tribunal (NCLAT) challenging the September 1 order of a five-member special bench of the National Company Law Tribunal (NCLT), which restrained him from alienating his assets.

A bench comprising Officiating Chairperson Justice (retd) Yogesh Khanna and Technical Members Barun Mitra and Ajai Das Mehrotra took up Chandra’s appeal and directed him to serve copies of the petition on the creditors. The matter has been posted for September 29.

Senior Advocate Dhruv Mehta, appearing for Chandra, told the NCLAT that the appeal challenges the order passed by the special five-member NCLT bench on September 1. During the hearing, several creditors told the appellate tribunal that they had either not received copies of the appeal or had not been made parties, despite having participated in the proceedings before the NCLT. The NCLAT then directed Chandra to provide copies of the appeal to the parties appearing before it during the day and take steps to implead the necessary parties.

Background of the Insolvency Dispute

The dispute relates to Chandra’s personal insolvency proceedings initiated by Indiabulls Housing Finance Limited under Section 95 of the Insolvency and Bankruptcy Code (IBC). Under the repayment plan proposed by Chandra, Rs 6.25 crore was offered to creditors against admitted claims of Rs 22,006.57 crore, while another Rs 25 lakh was earmarked towards insolvency resolution process costs.

NCLT's Split Verdict and CBI Involvement

The repayment plan was initially considered by a two-member NCLT bench comprising Judicial Member Ashok Kumar Bhardwaj and Technical Member Reena Sinha Puri. The two members gave differing views on the plan, following which the matter came before a five-member special bench.

The larger NCLT bench subsequently stayed the operation of the August 25 order relating to the repayment plan and directed that the guarantor should not sell, transfer, alienate or otherwise deal with his assets, directly or indirectly, during the pendency of the proceedings. The five-member bench has also sought the CBI’s response within four weeks, after observing that the agency’s investigation could have a bearing on the insolvency proceedings. Chandra’s side had opposed making the CBI a party to the case.

The latest appeal before the NCLAT challenges the September 1 restraint on alienation of Chandra’s assets. The appellate tribunal will hear the matter further on September 29 after the necessary parties are served and impleaded.

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