Essel chairman questions five-member tribunal
Key Highlights
- Subhash Chandra has challenged the constitution of a five-member NCLT bench.
- His counsel argued that the tribunal lacks the power to constitute such a bench.
- The NCLT had stayed an order concerning a repayment proposal of about ₹6.5 crore.
- Creditor claims in the matter stand at approximately ₹22,006 crore.
- The five-member NCLT bench will hear the matter again on September 23.
- The related NCLAT appeals are scheduled for October 7.
New Delhi, September 2, 2026: Essel Group Chairman Subhash Chandra has opposed the constitution of a five-member bench of the National Company Law Tribunal to hear his personal insolvency case, arguing before the National Company Law Appellate Tribunal that the tribunal lacks the legal authority to form such a bench.
Appearing for Chandra, Senior Advocate Sasmit Patra described the NCLT’s decision as faulty and questioned the legal provisions under which the larger bench had been constituted.
The dispute relates to proceedings concerning a repayment plan arising from personal guarantees given by Chandra for borrowings linked to Essel Group companies.
The five-member NCLT bench had earlier stayed an order passed by Nilesh Sharma, Member (Judicial), who had been appointed as the third member after a two-member division bench delivered a split verdict.
The tribunal also restrained Chandra from alienating his assets.
The matter involves creditor claims of around ₹22,006 crore and a proposed repayment of approximately ₹6.5 crore from Chandra’s personal estate.
Patra argued that two of the three earlier members had broadly agreed on key issues concerning the repayment plan and eligibility and therefore questioned the need for the matter to be reconsidered by a larger bench.
He also cited provisions of Section 419 of the Companies Act, 2013, while contending that the law allows another member or members to decide a point of difference but does not specifically empower the tribunal to create a five-member bench in such circumstances.
Solicitor General Tushar Mehta, appearing for dissenting creditors including LIC Housing Finance, Canara Bank and Union Bank, said the case involved unusual circumstances and multiple divergent views, making it appropriate for a larger bench to examine the dispute.
The NCLAT observed that the validity of the five-member bench was not directly under challenge before it in the current proceedings.
Mehta initially sought disposal of the pending appeals with liberty to revive them later but subsequently decided not to press the withdrawal request.
The appellate tribunal consequently allowed the appeals to remain pending and scheduled the next hearing for October 7.
Meanwhile, the five-member NCLT bench has listed the insolvency matter for further hearing on September 23, keeping the high-profile personal insolvency dispute under continued judicial scrutiny.
