In personal insolvency case before NCLAT, Subhash Chandra opposes formation of 5-member NCLT bench

Subhash Chandra, chairman of the Essel Group, contested the formation of a five-member bench at the National Company Law Tribunal (NCLT) to rule on his personal insolvency case, arguing that the tribunal lacks the authority to assemble such a bench. Senior Advocate Sasmit Patra, representing Chandra, labelled the NCLT order as faulty and contested the power of the tribunal to create a five-member bench.

Patra pointed out that the NCLT had on September 1, barred Chandra from disposing of assets and stayed an order approving a ₹6.25-crore payout against claims of ₹22,006-crore. Solicitor General Tushar Mehta, representing dissenting creditors, argued that the case's unique circumstances, with divergent views from the three judges, warranted a larger bench to resolve the issue.

However, Patra maintained that the NCLT lacked the power to form a five-member bench under the Companies Act, 2013, and questioned the authority to do so. The NCLT bench, led by Officiating Chairperson Justice Yogesh Khanna, stated that the constitution of the five-member bench was not a concern for them and refused to permit Chandra to challenge the order separately while his appeal remained pending. The appeals were directed to be listed for a further hearing on October 7.