NCLAT orders creditors to respond as Subhash Chandra challenges NCLT asset freeze
The National Company Law Appellate Tribunal has told creditors to file replies within a week and gave Subhash Chandra a week to answer, while a pending NCLT hearing may affect the case.
Subhash Chandra has taken his personal insolvency dispute to the National Company Law Appellate Tribunal after a five-member NCLT bench on September 1 stayed a prior order that permitted him to dispose of assets. The appellate tribunal ordered the creditors who opposed his petition to file their replies within a week and gave Chandra a week to file a rejoinder to those replies. During the hearing, Solicitor General Mehta advised waiting for the outcome of the next NCLT hearing scheduled for November 19, a suggestion opposed by Chandra’s lawyer Dhruv Mehta.
The five-member NCLT bench also issued a notice to the CBI and kept an interim director in place to block Chandra, chairman of Essel Group, from alienating property pending a final decision. The CBI’s FIR alleges Chandra falsified net-worth certificates to secure two loans totalling Rs 980 crore from Life Insurance Corporation Housing Finance Limited, leading to a loss of more than Rs 1,322 crore to the lender.
Why it matters
The case could determine how high-profile Indian businessmen are treated in insolvency and loan fraud investigations.
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