NCLAT issues notice to creditors on Subhash Chandra’s plea; sets next hearing for October 29-30

The National Company Law Appellate Tribunal (NCLAT) on Tuesday (September 29, 2026) issued notices to creditors on a plea filed by Essel Group Chairman Subhash Chandra and scheduled the matter for hearing on October 29 and 30, 2026.

Mr. Chandra had challenged before the appellate tribunal an order passed on September 1 by a five-member larger Bench of the National Company Law Tribunal (NCLT), which had stayed the order of a third tie-breaker judge in his personal insolvency matter and restrained him from alienating his assets.

The NCLAT has directed the creditors, who opposed the maintainability of Chandra’s petition, among others, to file their reply within a week. A three-member Bench of NCLAT also granted a week’s time to Subhash Chandra to file a rejoinder to the creditors’ reply.

“Let the notice be issued… will file the reply (over maintainability and stay) within a week,” said the Bench comprising Officiating Chairperson Justice (Retd.) Yogesh Khanna and Technical Members Barun Mitra and Ajai Das Mehrotra.

Meanwhile, at the request of Solicitor General Tushar Mehta, appearing for some creditors, the appellate tribunal clubbed a separate petition filed by creditors challenging the NCLT order that approved a settlement involving a payment of about ₹6.5 crore against admitted claims of around ₹22,006.57 crore with Mr. Chandra’s appeal.

The NCLAT fixed October 29 and 30 for hearing Chandra’s interim relief applications. The tribunal indicated that one day would be allotted for arguments on behalf of Mr. Chandra and the other for submissions from creditors.

During the proceedings, Solicitor General Mehta suggested waiting for the outcome of the next hearing of the five-member NCLT Bench, scheduled on November 19. However, this was opposed by advocate Dhruv Mehta, who was representing Subhash Chandra.

In its last hearing on September 23, the five-member NCLT Bench issued notice to the probe agency CBI in the personal insolvency matter of Subhash Chandra and said the interim director restraining Essel Group Chairman from alienating property will continue till a final decision by it.

The CBI has registered an FIR against Subhash Chandra for allegedly inflating his net worth to avail loans from the Life Insurance Corporation Housing Finance Limited (LICHFL) and then becoming a defaulter, causing a loss of more than ₹1,322 crore to the public-sector lender.

LICHFL alleged in its complaint, which is now part of the FIR, that Mr. Chandra submitted net-worth certificates that were used to secure the approval and disbursal of two loans totalling ₹980 crore.

In his petition to the NCLAT, Subhash Chandra argued that the NCLT’s September 1, 2026 order exceeded its statutory authority. Mr. Chandra questioned the formation of the five-member Bench by NCLT. Earlier, a two-member Bench delivered a split verdict on Chandra’s personal insolvency resolution process in NCLT.

While Member (Judicial) Ashok Kumar Bhardwaj approved the ₹6.5 crore repayment plan submitted by Mr. Chandra and held that he was eligible to seek relief under the insolvency framework for personal guarantors, Member (Technical) Reeta Kohli disagreed and rejected the proposal, leading to a reference under Section 419(5) of the Companies Act, 2013.

Section 419(5) of the Companies Act lays down the procedure for resolving a split verdict by referring the points of difference to additional members of the tribunal for a majority decision. The matter was subsequently placed before Nilesh Sharma, Member (Judicial), as the third member to decide the points of difference.

Mr. Sharma concurred with Bhardwaj on the key issues and upheld Chandra’s repayment plan, under which claims of around ₹22,006 crore arising from personal guarantees were proposed to be settled for about ₹6.5 crore.

However, the operation of Mr. Sharma’s order was later stayed by a five-member NCLT Bench, which restrained Mr. Chandra from alienating his assets pending further proceedings.