NCLAT sends notices to creditors on Subhash Chandra’s insolvency plea

The NCLAT directed the creditors, who had challenged the maintainability of Chandra’s petition, among others, to submit their response within a week.

A three-member NCLAT Bench also granted Subhash Chandra a week to respond to the creditors’ reply.

At the behest of Solicitor General Tushar Mehta, representing certain creditors, the appellate tribunal clubbed a separate petition filed by creditors challenging the NCLT order that approved a settlement involving a payment of around Rs 6.5 crore against admitted claims of about Rs 22,006.57 crore with Chandra’s appeal.

The NCLAT scheduled October 29 and 30 to hear Chandra’s pleas for interim relief. The tribunal said one day would be dedicated to arguments on behalf of Chandra and the other to submissions by the creditors.

During the proceedings, Solicitor General Mehta proposed deferring any action until the outcome of the upcoming hearing before the five-member NCLT Bench, scheduled for November 19.

However, advocate Dhruv Mehta, representing Subhash Chandra, opposed the proposal.

At the latest hearing on September 23, the five-member NCLT Bench issued a notice to the CBI regarding the personal insolvency case of Subhash Chandra and said the interim direction restraining the Essel Group Chairman from transferring his properties would remain in force until a final decision was reached.

The CBI has registered an FIR against Subhash Chandra for allegedly overstating his net worth to secure loans from Life Insurance Corporation Housing Finance Limited (LICHFL) and subsequently defaulting on them, resulting in a loss of more than Rs 1,322 crore for the public-sector lender.

LICHFL alleged in its complaint, which has been incorporated into the FIR, that Chandra provided net-worth certificates that facilitated the sanction and disbursal of two loans amounting to Rs 980 crore.

In his appeal before the NCLAT, Subhash Chandra contended that the NCLT’s September 1, 2026, order exceeded its jurisdiction.

Chandra also challenged the constitution of the five-member Bench by the NCLT.