Zee TV founder and Essel Group chairman Subhash Chandra on Wednesday challenged the National Company Law Tribunal’s (NCLT) decision to constitute a five-member bench to hear his personal insolvency case, questioning the tribunal’s power to do so.
Appearing before the National Company Law Appellate Tribunal (NCLAT), senior advocate Sasmit Patra, representing Chandra, argued that the NCLT lacked statutory authority to form such a bench.
The larger bench was constituted after a two-member NCLT bench delivered a split verdict. Nilesh Sharma, appointed as the third member to resolve the difference, subsequently passed an order that was stayed by the five-member bench on Tuesday. The NCLT has also restrained Chandra from alienating his assets.
Statutory Authority
The proceedings relate to personal guarantees given by Chandra for borrowings by Essel Group entities. The case involves admitted creditor claims of about Rs 22,006 crore and a proposed repayment plan of around Rs 6.5 crore. Chandra’s counsel stressed that no final order approving the plan has been passed.
Patra argued the orders of Ashok Kumar Bhardwaj and Sharma were broadly aligned on the repayment plan and eligibility under Section 79 of the Insolvency and Bankruptcy Code (IBC). He said the provisions for resolving differences between NCLT members did not empower the tribunal to constitute a five-member bench.
Legal Clashes
Solicitor General Tushar Mehta, appearing for dissenting creditors including LIC Housing Finance, Canara Bank and Union Bank, backed the larger bench, saying the case had produced three divergent views and presented “very peculiar circumstances”.
Mehta initially sought disposal of the appeal against Sharma’s order, with liberty to revive it if the constitution of the larger bench was challenged separately. Patra opposed the move, arguing that the five-member bench should have stayed all three orders.
The NCLAT, headed by Officiating Chairperson Justice Yogesh Khanna, said the constitution of the five-member NCLT bench was not directly before it. The tribunal also declined to allow Chandra to challenge the constitution separately while keeping the current appeal pending.
The hearing also saw a sharp exchange over public commentary surrounding the Rs 6.5-crore repayment proposal. Patra said Chandra had faced widespread criticism despite there being no final order approving the plan.
Mehta objected, saying the appellate forum should not be used for statements intended to influence media coverage. The NCLAT agreed and said any grievance should be raised before the NCLT, where the substantive proceedings remain pending.
Mehta later withdrew his request to dispose of the appeals. The NCLAT allowed them to remain pending and listed the matter for October 7, 2026.