A FIVE-MEMBER special bench of insolvency tribunal NCLT on Tuesday barred Essel Group chairman Subhash Chandra from alienating his properties and issued notices to all parties in a case over a proposed settlement that would allow creditors to recover just about Rs 6.5 crore from his personal estate against claims of roughly Rs 22,006 crore. The special bench of the National Company Law Tribunal (NCLT), headed by President Justice Anupinder Singh Grewal, said there was no majority view among its members and therefore, no final order could yet be given effect to. “Let notice be issued to all the parties,” the bench said, directing that the guarantor“shall not alienate the properties, either directly or indirectly”. Justice Grewal said the tribunal wanted to understand the scope of the matter and would hear all parties, including creditors who have opposed Chandra’s repayment plan. The case is now also before the National Company LawAppellate Tribunal (NCLAT), after dissenting lenders challenged the repayment plan. NCLAT took up the matter on Tuesday and directed that it be listed on Wednesday following a request by Solicitor General Tushar Mehta, appearing for LIC Housing Finance, Canara Bank and Union Bank, among others.

 

Mehta requested the appellate tribunal to grant one day’s time to decide whether they want to proceed in this matter or not. He also apprised a threemember bench of the appellate tribunal comprising its Officiating Chairperson Justice Yogesh Khanna, and said he will “examine the matter and come back” on Wednesday. The dispute centres around a repayment plan under which Chandra was allowed to settle claims arising from personal guarantees on his group’s borrowings for just Rs 6.5 crore - a 99.9 per cent haircut on the Rs 22,006 crore his companies have defaulted on. Ten banks and lenders had supported the proposal, while dissenting creditors including HDFC Bank, LIC Housing Finance and Canara Bank opposed it on the grounds that the recovery would be negligible. The dissenting lenders accounted for less than 20 pc of the voting share. Chandra has argued that the widely cited Rs 22,006-crore figure does not represent the money he personally borrowed. Instead, he says it comprises claims arising from guarantees he gave for loans raised by Essel Group companies.