The repayment plan proposed by Zee Group founder Subhash Chandra faces another round of scrutiny after the original National Company Law Tribunal (NCLT) bench held that no majority view had emerged on the proposal. It said third member Nilesh Sharma’s opinion differed materially from the views of the two members of the original bench.
NCLT has on Monday referred the matter to its president under Section 419(5) of the Companies Act, 2013, who has formed a five-member special bench to decide the issue. The development means Sharma’s August 25 opinion in favour of approving the repayment plan did not translate into a final approval order.
The NCLT has directed that the case be heard by a special bench comprising the NCLT president, judicial members Bacha Venkat Balaram Das and Mahendra Khandelwal, and technical members Atul Chaturvedi and Ravindra Chaturvedi. The bench will sit on September 1.
Sharma had considered the matter after a difference of opinion emerged between judicial member Ashok Kumar Bhardwaj and technical member Reena Sinha Puri. Sharma directed that the repayment plan be approved provided that claims submitted through Anil Kumar, on behalf of 960 individuals, and Sunil Jain, on behalf of 300 individuals, were excluded.
The repayment plan involves a haircut of more than 99% for creditors, with only Rs 6.25 crore proposed to be paid against admitted claims of about Rs 22,006.6 crore.
The original bench has now held that the difference between the opinions was material. Bhardwaj’s earlier view approved the plan while allowing dissenting creditors to pursue independent recovery, whereas Sharma held that an approved plan would bind all creditors, including those who opposed it. This difference meant Sharma’s opinion could not simply be combined with Bhardwaj’s to form a majority.
The repayment plan had received 80.8% of the voting share. Several creditors, including IndusInd Bank, HDFC Bank and Canara Bank had opposed the plan, while other creditors supported it.
Meanwhile, dissenting creditors including LIC Housing Finance, Canara Bank and Union Bank of India (UK) have moved NCLAT against the NCLT’s approval of the repayment plan. The appellate tribunal has agreed to hear the lenders’ challenge on September 1.
The special bench will now decide how the conflicting opinions are to be dealt with and whether the repayment plan can ultimately receive approval.