Subhash Chandra Moves NCLAT Against Restraint On Alienating Assets In Insolvency Case

Essel Group Chairman Dr. Subhash Chandra has moved the National Company Law Appellate Tribunal (NCLAT) against a September 1 order of the Delhi Bench of the National Company Law Tribunal (NCLT) restraining him from alienating his assets in insolvency proceedings initiated against him as a personal guarantor.

The appeal was taken up by a three-member NCLAT Bench comprising Officiating Chairperson Justice (retd) Yogesh Khanna and Technical Members Barun Mitra and Ajai Das Mehrotra on Wednesday.

The bench directed Chandra to serve copies of the appeal on the creditors after several of them informed the tribunal that they had either not been served with the appeal or had not been impleaded as parties. It also directed Chandra to take steps to implead the necessary parties.

The matter has been listed for further hearing on September 29.

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.