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The National Company Law Tribunal (NCLT) on Monday formed a five-member bench in the case related to the personal insolvency process of Subhash Chandra. This bench will decide on the payment of Rs 6.5 crore. There are claims of more than Rs 22 thousand crore in this case.
The bench will begin the hearing at the Principal Bench of NCLT at 10:15 am on Tuesday. The two-member bench could not give a majority decision on this plan. After this the case was sent to the Chairman of NCLT for a fresh hearing.
This is the first time in the history of NCLT that a five-member bench has been formed. The bench will be headed by President Justice Anupinder Singh Grewal. Its remaining members are Bachu Venkata Balaram Das, Mahendra Khandelwal, Atul Chaturvedi and Ravindra Chaturvedi.
Different opinions came in the 2 member bench
Earlier, in the two-member bench of NCLT, both the members had different opinions regarding the payment plan. Therefore the matter was referred to the third member. The third member approved a payment plan of Rs 6.5 crore on August 26.
Ashok Kumar Bhardwaj had said in his order that the scheme would be applicable only to those creditors who have voted in its favor. Such creditors were about 80.8%.
He had given liberty to dissenting banks and financial institutions to recover the loan from Subhash Chandra separately. Their share was about 19.2%.
After this, the case was sent to a two-member bench to issue the final order on the basis of majority opinion. This process is required under Section 419(5) of the Company Act, 2013.
The bench said the member judicial had not extinguished the principal debt of the banks, financial institutions and dissenting creditors. At the same time, the third member, while approving the payment plan, abolished the rights of all the creditors under Section 115(1).
Disagreeing lenders moved NCLAT
On Monday, dissenting creditors of Subhash Chandra moved NCLAT as a precautionary measure. He appealed against the decision of the third member which had approved payment of Rs 6.5 crore against loan claims of about Rs 22,006.57 crore.
Solicitor General Tushar Mehta presented the case in NCLAT on behalf of LIC Housing Finance. Acting Chairman Justice Yogesh Khanna was also included in the bench. Mehta demanded immediate hearing of the case.
Mehta also argued on behalf of Canara Bank and Union Bank. He said that if this order remains in force, it will defeat the basic purpose of the Insolvency and Bankruptcy Code (IBC).
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