The National Company Law Tribunal (NCLT) has hit a fresh procedural roadblock in the four-year-old personal insolvency case against Essel Group Chairman Subhash Chandra. A final order remains stalled after the original two-member division bench failed to reach a majority consensus, forcing them to refer the matter back to the NCLT President for a third time.
Key Case Details
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The Debt: Creditors claimed approximately Rs 22,006.57 crore.
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The Repayment Plan: A proposed payout of Rs 6.5 crore (including Rs 6.25 crore to creditors and Rs 25 lakhs for process costs), resulting in a 99.97% haircut.
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The Core Conflict: Disagreements center on the interpretation of Section 79(2)(g) and Section 115(1) of the Insolvency and Bankruptcy Code (IBC).
Divergent Views within the Tribunal
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Member (Judicial) Ashok Kumar Bhardwaj: Voted to approve the repayment plan only for the 80.8% of creditors who voted in its favor, while giving the remaining 19.2% of dissenting financial institutions (led by LIC Housing Finance) the liberty to independently pursue debt recovery.
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Member (Technical) Reena Sinha Puri: Rejected the repayment plan outright.
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The Third Member: Approved the repayment plan and applied Section 115(1) uniformly, extinguishing the claims of all creditors—including dissenting banks—against the personal guarantor, arguing that Chandra’s personal estate was worth less than the offered payout.
Because the third member issued an independent order rather than aligning with one of the initial bench members to form a clear majority view under Section 419(5) of the Companies Act, the division bench declared it could not pass a final order. The file now returns to the NCLT President, who may either appoint another third member or issue a direct order to resolve the deadlock.
