NCLT Seeks CBI Response In Subhash Chandra Insolvency Case Linked To ₹1,322 Crore Loan Fraud Probe

A special five-member bench of the National Company Law Tribunal (NCLT) has requested a response from the Central Bureau of Investigation (CBI) regarding the personal insolvency proceedings of Subhash Chandra, the founder of Essel Group. The tribunal has given the CBI four weeks to submit its reply following the CBI's registration of a First Information Report (FIR) against Chandra and others concerning an alleged Rs 1,322-crore loan fraud related to LIC Housing Finance.

The CBI's findings may significantly impact the insolvency proceedings, especially concerning asset disclosures, fund movements, and creditor claims' validity before the tribunal. The bench, led by NCLT President Justice (Retd.) Anupinder Singh Grewal, includes Judicial Members Bachu Venkat Balaram Das and Mahendra Khandelwal, as well as Technical Members Atul Chaturvedi and Ravindra Chaturvedi.

The panel was assembled this month after earlier proceedings yielded varied opinions among members, resulting in a lack of majority consensus. The disagreement pertains to a repayment proposal by Chandra under Section 95 of the Insolvency and Bankruptcy Code (IBC), wherein he suggested repaying around Rs 6.25 crore and an additional Rs 25 lakh for insolvency resolution expenses against creditor claims worth over Rs 22,006 crore.

Financial creditors, including LIC Housing Finance, have contested the repayment proposal, claiming asset undervaluation, procedural issues, and the involvement of related-party entities in the voting process. Earlier, the five-member bench had stayed the implementation of the repayment plan and prohibited Chandra from selling, transferring, or transferring third-party rights over his personal assets.

The CBI's response is anticipated to provide further information for the tribunal's evaluation of the insolvency proceedings and the creditors' concerns.