The National Company Law Tribunal (NCLT) has not yet issued a final order in the personal insolvency case involving Essel Group Chairman Subhash Chandra. The tribunal’s two-member bench was unable to reach a majority verdict during a session on Monday, as a third member provided an independent opinion. The case involves claims exceeding Rs 22,000 crore against Chandra.
In an order passed on Monday, the division bench of Ashok Kumar Bhardwaj, Member (Judicial), and Reena Sinha Puri, Member (Technical), said no majority view had emerged despite reconsidering the matter, following a differing opinion from a Third Member of the tribunal, and referred the matter back to the NCLT President. The matter has been sent to the NCLT President again following the difference of opinion. The President may appoint a third member or issue an order himself to reach a majority view. ” While Member (Technical) rejected the plan, the Member (Judicial) confined the plan to those who accepted and approved it and accorded liberty to dissenting creditors to recover their debt. He did not extinguish the claim of banks/financial institutions/dissenting creditors qua principal debtor/debtor/PG. In the wake, no order can be passed at this stage.
As per the procedure, the third member’s order was sent back to the original division bench for a formal order in line with the majority opinion, as required under Section 419 (5) of the Companies Act, 2013. The Third Member approved the plan but extinguished the right of all the creditors by applying Section 115(1) of the Code uniformly,” it said. Resultantly, we have no option but to make fresh reference to the President in terms of the provisions of Section 419(5) of the Code,” it said.
The bench said the “Third Member consciously passed an independent order. Thus, no majority view emerges” and hence “no order can be passed at this stage”. “All said and done, no majority view has emerged in the matter.
