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NCLT Halts Chandra Repayment Plan, Freezes Assets
2 Sep
Summary
- A five-member NCLT bench stayed approval of Subhash Chandra's repayment plan.
- Essel Group founder Subhash Chandra is restrained from alienating any assets.
- Dissenting creditors sought protection against guarantor's asset alienation.
A special five-member National Company Law Tribunal (NCLT) bench has issued a stay on the approval of Subhash Chandra's repayment plan. This ruling also prohibits the Essel Group founder and chairman from transferring or selling any of his assets.
The newly formed bench's decision effectively nullifies a prior order from a smaller bench that had previously sanctioned the repayment proposal. This action was prompted by objections from dissenting creditors who sought safeguards against the guarantor's assets being alienated.
The tribunal has directed that Subhash Chandra is prohibited from alienating his properties, either directly or indirectly. This development comes after creditors asserted that Chandra acts as a guarantor for over Rs 22,006 crore borrowed by various Essel Group companies, a claim Chandra disputes.
Earlier, a single member of the NCLT had approved Chandra's repayment plan, overriding objections from dissenting lenders. However, the formation of this larger, special bench indicates a fresh review of the case, with all parties now on notice.
