Essel Group Chairman Subhash Chandra's legal team on Wednesday told the National Company Law Appellate Tribunal (NCLAT) that a malicious media narrative was manufactured over the last 15 days around a ₹6.5 crore repayment proposal, causing unfair reputational damage to Chandra despite no final NCLT order actually being in effect. Senior Advocate Sasmit Patra said the proceedings had resulted in a "media trial" that had tarnished Chandra's reputation across the country, even though the August 25 opinion approving the repayment plan had not crystallised into a final, enforceable NCLT order. "The fact is that there is no order today standing in this matter. But for the last 15 days, the personal guarantor, Dr Subhash Chandra, has been vilified across this country, saying that he has done ₹6.5 crore into ₹22,006 crore," Patra submitted before the NCLAT coram of Officiating Chairperson Justice Yogesh Khanna and Technical Members Barun Mitra and Ajai Das Mehrotra. The NCLAT also observed that it was not passing any order on Patra's submission and said Chandra could raise his grievance before the National Company Law Tribunal (NCLT), where the insolvency proceedings are pending.
The National Company Law Tribunal (NCLT) has stayed its August 25 order approving Zee Group Founder and Chairman Subhash Chandra's ₹6.5 crore repayment plan, as reported by The Times of India. The five-member bench led by President Justice (retd) Anupinder Singh Grewal clarified that there was no definitive majority view among the members, including the third member, and decided to reconsider the matter afresh. The tribunal has issued notices to all parties involved in the case and barred Chandra from transferring, disposing of or otherwise alienating his properties, whether directly or indirectly, during the pendency of the proceedings. This latest development follows the NCLT's earlier constitution of a five-member special bench to resolve the deadlock over Chandra's repayment plan after three tribunal members delivered differing views. The special five-member bench, constituted for the first time in the NCLT's history, also comprises Bachu Venkat Balaram Das, Mahendra Khandelwal, Atul Chaturvedi and Ravindra Chaturvedi. As per The Times of India, the litigation has remained inconclusive over the last one year because of dissenting orders, with a two-member NCLT bench delivering a split verdict in September 2025, where one member approved the repayment plan while the other rejected it, citing irregularities in the admission of claims and voting. The National Company Law Tribunal (NCLT) had on Monday formed a five-member bench, that stayed the operation of the order of Nilesh Sharma on Tuesday after issuing notice to all parties and listed the matter for next hearing on September 23, 2026.
During the same hearing, Patra strongly questioned the jurisdiction and authority of constituting a 5-member NCLT bench to re-evaluate the repayment plan, contending that the tribunal does not have the power to form such a bench. He argued that Section 419(5) of the Companies Act, read with the Insolvency and Bankruptcy Code (IBC), provides a very narrow scope and does not empower the tribunal to form such a bench. "The scope of Section 419(5) is very limited. If there is a differing view, then that differing view has to be taken up by another member or other members. It does not empower the NCLT under the IBC or company law to form a five-member Bench," Patra submitted. He further disputed the lenders' contention that the three NCLT members who considered the repayment plan had delivered completely divergent opinions. According to Patra, Judicial Member Ashok Kumar Bhardwaj and Judicial Member Nilesh Sharma had both favoured approval of the repayment plan and were aligned on the eligibility issue under Section 79 of the IBC. Their difference, he said, was primarily over the treatment of dissenting creditors. "Both are equally on the same page as far as Section 79 is concerned on eligibility. Therefore, to say all these issues have to be re-litigated is completely wrong," Patra argued. The defense clarified that the initial bench was completely in agreement on whether the debtor was eligible to be under Section 79 of the IBC and only differed on dissenting creditors, with the lenders' appeal status and next hearing scheduled for October 7, 2026.
Dissenting lenders have alleged that five entities linked to Essel Group Chairman Subhash Chandra's family together controlled 61.78% of the voting share and were instrumental in pushing through his personal insolvency resolution plan. The five entities are Veena Investments Pvt Ltd, Direct Media Distribution Ventures Pvt Ltd, World Crest Advisors LLP, Lemonade Capital Advisors LLP and Corpcall Capital Advisors LLP. According to The Economic Times, the lenders contended that these entities were associates or related parties of Chandra and should have been barred from voting on the repayment plan. However, Judicial Member Nilesh Sharma rejected these submissions, observing that an entity is an "associate" only if the debtor personally holds 51% or more of its share capital, or directly controls its board. Since Chandra held no direct shares in any of the five entities, the test wasn't met, even though a family member allegedly controlled the parent company. The final NCLT order, which was pronounced orally in the courtroom, has yet to be uploaded to the insolvency tribunal's portal.
Solicitor General Tushar Mehta, appearing for the appellant-lenders, initially sought to withdraw the lenders' appeals with liberty to revive them, saying the appeals might no longer require immediate consideration since the 5-member NCLT bench had stayed the August 25 opinion and decided to hear the case afresh. Patra opposed withdrawal with liberty to revive, pointing out that the lenders' appeals were defective because no final order had crystallised out of the August 25 opinion. Following this opposition, Mehta decided not to press the withdrawal applications and requested that the appeals remain pending. The NCLAT agreed and listed them for October 7, 2026. LIC Housing Finance, HDFC Bank, Axis Bank, Canara Bank, IDBI Trusteeship (Franklin Templeton) and Union Bank of India (UK) Ltd are among the dissenting creditors opposing Chandra's repayment plan. In the tribunal, as a dissenting creditor, LIC Housing Finance had argued that against "the admitted claim of approximately ₹22,006 crore, the repayment plan proposed payment of only ₹6.25 crore to the creditors." The dissenting creditors contend that the plan offers them only ₹38.09 lakh - about 0.028% of what they were owed. LIC Housing Finance has separately questioned the absence of a forensic audit of Chandra's financial position and pointed out that against its admitted claim of ₹1,322.39 crore, the plan offered it precisely ₹38.09 lakh.
The lenders subsequently informed the National Company Law Appellate Tribunal (NCLAT) about the NCLT's stay, with the NCLAT deferring the hearing of the lenders' plea to Wednesday, September 2. As reported by Business Standard, Solicitor General Tushar Mehta told the NCLT that an appeal had already been filed against the order by the third member. The proceedings were initiated by Indiabulls Housing Finance against Chandra in relation to personal guarantees he had provided for loans taken by Essel Group companies. Chandra has maintained that he did not personally borrow from lenders and that the claims relate to guarantees provided for loans raised by group companies. The National Company Law Appellate Tribunal (NCLAT) was also set to hear appeals by lenders challenging the NCLT's approval of Chandra's repayment plan on Tuesday, but in the morning, Solicitor General Tushar Mehta, appearing for the lenders, told the appellate tribunal that the NCLT had already formed a five-member bench to look into the matter. However, Patra contended that the five-member NCLT bench should have stayed all the three orders passed, including the split verdict of the division bench. The NCLAT bench, however, said this could not be permitted, with the NCLAT bench directing that the petitions be listed for next hearing on October 7. Mehta decided not to press the withdrawal applications and requested that the appeals remain pending, with the NCLT's latest directions leaving the repayment plan without effect for now, pending further proceedings before the tribunal.
