NCLAT Issues Notice On Subhash Chandra's Appeal Against NCLT Restraint On Asset Alienation In Insolvency Matter

The National Company Law Appellate Tribunal (NCLAT) on Tuesday issued notice in an appeal filed by Essel Group Chairman Subhash Chandra.

The appeal challenges a September 1 order of the Delhi Bench of the National Company Law Tribunal (NCLT), which restrained him from alienating his assets during insolvency proceedings initiated against him as a personal guarantor.

The appeal was heard by a bench comprising Officiating Chairperson Justice Yogesh Khanna and Technical Members Barun Mitra and Ajai Das Mehrotra.

The bench issued notice to the respondents, including Resolution Professional (RP) Shiv Nandan Sharma, Canara Bank Stressed Asset Recovery Management Branch, HDFC Bank Limited, IDBI Trusteeship Services Limited, IndusInd Bank Limited, LIC Housing Finance Ltd, RBL Bank Limited and Union Bank of India

Solicitor General Tushar Mehta, appearing for the respondents, pointed out that the matter is already pending before the Delhi NCLT Bench. He said it is listed for hearing on November 19 and requested that the present appeals be listed on a later date, as they require a detailed hearing. He also raised an issue regarding the maintainability of the appeals.

Mehta further pointed out that an appeal filed by the creditors against Chandra's repayment plan is listed before the NCLAT on October 7. He suggested that the appeals be heard together. The creditors had moved an appeal against Dr Chandra's repayment plan on 31 August.

The matters are thus listed on 29 and 30 October for further hearing.

The NCLT's five-member Special Bench had stayed an August 25 order passed by its third member, Nilesh Sharma, which approved Chandra's repayment plan. It held that no clear majority view had emerged on the plan.

The Bench also directed that Chandra, as the personal guarantor, “shall not alienate any assets whatsoever either directly or indirectly.”

The insolvency proceedings arose from an application filed by Indiabulls Housing Finance Limited under Section 95 of the Insolvency and Bankruptcy Code, 2016 (IBC), against Chandra in his capacity as a personal guarantor. Chandra's repayment plan proposed payment of ₹6.25 crore to creditors against admitted claims of ₹22,006.57 crore. It also proposed ₹25 lakh towards insolvency process costs.

The plan was initially considered by an NCLT Bench comprising Judicial Member Ashok Kumar Bhardwaj and Technical Member Reena Sinha Puri. The two members delivered dissenting judgments on September 3, 2025. Following the difference of opinion, the matter was referred to Nilesh Sharma, Member (Judicial), NCLT Mumbai Bench, as the third member.

He pronounced his order on August 25, 2026. Sharma approved the repayment plan but directed the exclusion of claims submitted through Anil Kumar on behalf of 960 individuals and through Sunil Jain on behalf of 300 individuals from the final list of creditors. He directed that the amounts allocated to those claims be redistributed among the remaining eligible creditors.

He also held that the approved repayment plan would bind all creditors, whether assenting or dissenting, under Section 115 of the IBC. When the matter returned to the original NCLT Bench on August 31 for passing the consequential order, it held that no majority view had emerged. The bench consequently referred the matter to the NCLT President under Section 419(5) of the Companies Act, 2013.

The NCLT President thereafter constituted the five-member Special Bench to consider the issue.

The Special Bench noted that while Judicial Member Ashok Kumar Bhardwaj had approved the repayment plan, Technical Member Reena Sinha Puri had rejected it, citing irregularities in the process, including those relating to admission of claims and voting. Chandra has now challenged the Special Bench's order before the NCLAT. The appellate proceedings will continue on September 29.