Stories
NCLT Upholds Interim Stay in Subhash Chandra Insolvency Case, Seeks Responses from All Parties Including CBI
- •A five-member NCLT bench continued the stay on the previous interim order in the Subhash Chandra insolvency case until the hearing's completion.
- •Notices have been issued to all parties, including the CBI, to file responses within four weeks; the next hearing is in October.
- •The case involves Subhash Chandra's personal guarantee for Essel Group companies' loans totaling –22,006 crore, leading to insolvency proceedings.
- •A repayment plan of –6.25 crore for creditors and –25 lakh for insolvency costs was approved by 80.81% of creditors, but major lenders like HDFC Bank and LIC Housing Finance opposed it.
- •The five-member bench was formed to resolve a deadlock after a two-member NCLT bench disagreed, and a third member approved the plan, which was then challenged.
Key Questions Answered
A five-member special NCLT bench was formed under the chairmanship of the NCLT President to resolve a deadlock after a two-member bench failed to reach a majority verdict and a third member's approving opinion created a legal dispute.
The personal insolvency proceedings accepted claims amounting to approximately ₹22,006.57 crore, which represent corporate borrowings made by various Essel Group companies for which Subhash Chandra provided personal guarantees rather than direct personal loans.
The repayment plan proposes that Subhash Chandra pay ₹6.25 crore alongside setting aside ₹25 lakh for insolvency process costs, bringing the total plan size to approximately ₹6.50 crore, which had received support from creditors holding 80.81% voting share.
