Essel Group chairman Subhash Chandra told the National Company Law Appellate Tribunal (NCLAT) on Wednesday that he has been "vilified across the country" concerning a proposed ₹6.5 crore repayment plan. This plan is set against admitted creditor claims totaling over ₹22,006 crore in his personal insolvency case.
Appearing before the NCLAT, Chandra's advocate, Sasmit Patra, contended that the ongoing proceedings have led to a "media trial" that has severely damaged the media baron's reputation. Patra highlighted that despite no final order approving the plan, public perception has been influenced by the significant disparity between the proposed repayment and the total debt.
Legal Challenges to NCLT Procedures
Patra further questioned the National Company Law Tribunal's (NCLT) authority to constitute a five-member bench tasked with reconsidering the repayment plan. Citing Section 419(5) of the Companies Act 2013, he argued that this provision has a limited scope, primarily for addressing differing views among existing members, not for forming entirely new benches to revisit matters.
The advocate also challenged the specific decision by this five-member bench to stay only the August 25 opinion of NCLT Judicial Member Nilesh Sharma. Patra asked for clarification on the legal basis and procedural conduct that led to this particular stay order.
Lenders' Stance and Tribunal's Response
Solicitor General Tushar Mehta, representing the lenders, countered by stating that NCLAT proceedings should not be used for making statements intended for media publication. He initially sought to withdraw the lenders' appeals, indicating they might not require immediate consideration given the NCLT's decision to hear the matter afresh. However, Patra opposed withdrawal with liberty to revive, arguing the appeals were defective as Sharma’s opinion never fully crystallized into a final NCLT order.
Ultimately, Mehta decided against pressing the withdrawal applications, opting instead to keep the appeals pending. The NCLAT agreed to this and has listed the matter for further hearing on October 7. The tribunal also clarified that Chandra could independently challenge the September 1 order if he felt aggrieved, and it was not passing any order on the submissions made by his advocate regarding vilification.
Differing Opinions on Repayment Plan
During the arguments, Patra disputed Mehta's assertion that the three NCLT members considering the repayment plan delivered differing opinions. Patra maintained that Judicial Members Ashok Kumar Bhardwaj and Nilesh Sharma both favored approving the repayment plan and agreed on the eligibility issue under Section 79 of the Insolvency and Bankruptcy Code (IBC).
Their primary disagreement, according to Patra, was on the treatment of dissenting creditors. Bhardwaj suggested the plan should bind only supporting creditors, allowing others to pursue alternative recovery methods. Sharma, conversely, held that under Section 115 of the IBC, the plan would be binding on all creditors, irrespective of their agreement.