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.

A five-member Bench of the National Company Law Tribunal (NCLT) on Tuesday (September 1, 2026) stayed an August 25 order approving a ₹6.25-crore repayment plan proposed by Essel Group founder Subhash Chandra in personal insolvency proceedings against him, after finding that no clear majority view had emerged among the members who had earlier heard the matter.

The Special Bench, headed by NCLT President Justice Anupinder Singh Grewal, noted that there was no clear majority opinion capable of being given effect to under Section 419(5) of the Companies Act, 2013, which provides for a reference to additional members when members of an NCLT Bench differ in their opinion.

“It is manifest, as per Section 419(5) of the Companies Act, that there is no clear majority view capable of being given effect to. Therefore, the order dated August 25, 2026, of the third member, Shri Nilesh Sharma, is stayed,” the Special Bench, also comprising judicial members Bachu Venkat Balaram Das and Mahendra Khandelwal, and technical members Atul Chaturvedi and Ravindra Chaturvedi, said.

Mr. Sharma, a judicial member of the NCLT, had been brought in as the third member after the two members who originally heard the matter differed over the repayment plan. He subsequently delivered his opinion on August 25.

The five-member Special Bench was constituted on Monday (August 31) evening after the tribunal found that there was still no majority view on how the repayment plan should operate. The NCLT, in its clarification order on Monday (August 31), said the members had taken different views on whether the repayment plan should bind only creditors who supported it or all creditors, including those who opposed it. One member had favoured allowing dissenting banks and financial institutions to pursue separate recovery proceedings, while another held that the approved plan should apply to all creditors.

The Special Bench also issued notices to the parties and sought their replies, observing that it would hear them at length before taking a final decision on the repayment plan.

Bar on alienating properties

Meanwhile, creditors have challenged the approval of the repayment plan before the National Company Law Appellate Tribunal (NCLAT). Solicitor General Tushar Mehta, appearing for the creditors before the Special Bench on Tuesday (September 1), sought an order restraining Mr. Chandra, who is the personal guarantor in the proceedings, from alienating properties held by him directly or indirectly.

The Special Bench accordingly restrained Mr. Chandra from alienating his properties.

“We also direct that the gurantors shall not alinetae the properties whatsover either dirctly or indirectly”, the Bench said in an oral order.

The personal insolvency proceedings against Mr. Chandra were initiated in 2024 following a petition by Indiabulls Housing Finance. The proceedings relate to personal guarantees given by him for borrowings of Essel Group-linked companies and are separate from corporate insolvency proceedings involving group companies and regulatory proceedings concerning Zee Entertainment Enterprises.

The dispute relates to the repayment plan under which Mr. Chandra would contribute about ₹6.25 crore from his personal estate towards admitted creditor claims of around ₹22,000 crore in the personal insolvency proceedings. The substantial gap between the claims and the amount proposed to be paid from his personal estate has drawn scrutiny.

The repayment plan received 80.814% of the voting share, while creditors opposing it accounted for 19.186%. Banks and other creditors had raised objections over the low recovery and questioned whether Mr. Chandra’s financial position and assets had been sufficiently examined. They had also questioned whether a forensic investigation was warranted.

On August 30, 2026, Mr. Chandra said borrowers associated with his personal guarantees had assured him that they would reconcile their accounts with lenders and settle the balance of ₹4,262 crore.

The tribunal, while approving the repayment plan on August 25, had concluded that it could provide a better outcome for creditors than pushing Mr. Chandra into bankruptcy. It also held that where creditors had approved a plan in accordance with the Insolvency and Bankruptcy Code, the tribunal would not ordinarily substitute its own commercial assessment for that of the creditors.

The August 25, 2026, order has nevertheless triggered questions over the effectiveness of personal guarantees and the ability of lenders to recover money when a guarantor’s available assets are substantially lower than the liabilities.

Congress leader Rahul Gandhi on Thursday (August 27, 2026) accused the Narendra Modi government of creating “two systems” in the country, one for a handful of billionaires and another for everyone else, after the National Company Law Tribunal (NCLT) approved a resolution plan allowing businessman Subhash Chandra to settle ₹22,006 crore dues for ₹6.5 crore.

In a post on X, Mr. Gandhi quipped that NCLT stood for “Neta-Company Loot Tribunal”. He said, “If a farmer doesn’t pay 50 thousand, his land gets auctioned off. If a salaried person misses even one EMI, bank goons show up at the house. Poor students can’t even get loans for education.”

“But for select ‘friends,’ bank money is like personal property — withdraw as much as you want, repay whatever you feel like,” Mr. Gandhi said, adding, “The Modi government has created two systems in the country — one for a handful of billionaires, and another for everyone else.”

The NCLT has approved a repayment plan under which Mr. Chandra can pay ₹6.5 crore against admitted creditor claims of ₹22,006.57 crore in his personal insolvency resolution process. This amounts to a haircut of nearly 99.97% for lenders.

Other Cong. leaders react

Congress general secretary Jairam Ramesh described the settlement as “not just a haircut” but a “mundan”, saying it made “a completely mockery of the Insolvency and Bankruptcy Code, 2016”.

“In finance terminology, when creditors are owed money and the debtor repays only part of it, the difference expressed as a percentage is called a haircut,” Mr. Ramesh explained in a post on X.

Congress general secretary Randeep Singh Surjewala alleged that such settlements amounted to “loan waiver of industrialists in garb of haircuts”.

“How can you have haircuts of 50%, 60%, 70%, 80% 90%, now 99%? Then why are you having NCLT proceedings?” he asked.

Mr. Surjewala demanded that the Finance Minister disclose how much banks had lost through haircuts under NCLT proceedings over the past 12 years. He claimed the figure could be “upwards of ₹10 lakh crore”, while stressing that he had “some information” to support the assertion.