New Delhi: The National Company Law Tribunal (NCLT) on Monday ordered insolvency proceedings against media baron Subhash Chandra on a plea by Indiabull Housing Finance.
A two-member Delhi bench of NCLT directed to initiate corporate insolvency resolution process (CIRP) against Chandra, Chairman Emeritus of Zee Entertainment Enterprises Ltd (ZEEL), who was the guarantor of the loan given to Essay Group firm Vivek Infracon Ltd.
The NCLT bench, comprising members Ashok K Bhardwaj and Subrata K Das, however rejected similar petitions filed by two other creditors IDBI Trusteeship and Axi Bank.
The order was pronounced by the NCLT in open court and the detailed judgment is still awaited.
Indiabulls Housing Finance Ltd (IHFL) had moved NCLT after Vivek Infracon failed to pay nearly Rs 170 crore due in 2022.Vivek Infracon is a part of Chandra-promoted Essel Group.
Although some settlement negotiations took place, no payments were made to IHFL.
After the introduction of CIRP, Chandra will come under the moratorium provisions of the Insolvency and Bankruptcy Code (IBC) and will not be allowed to sell, sell or alienate any property or assets.
A resolution professional will be appointed by the insolvency tribunal, who will reconcile all the debts and help the financial creditors recover their money.
Earlier, Chandra had argued that a personal guarantor cannot be liable for insolvency proceedings and the NCLT has no power to initiate proceedings against him.However, in May 2022 the NCLT rejected this and the Tribunal held that I had the jurisdiction and authority to decide on the individual insolvency proceedings.
Subsequently, this was challenged by Chandra before the appellate tribunal NCLAT. However, the case was withdrawn as the parties decided to resolve the matter amicably.
However, the issue was revived again by the IHFL earlier this year after an agreement could not be reached with Chandra.
In 2019, the government amended the provisions of the IBC, allowing creditors to file insolvency proceedings against personal guarantors.This provision was challenged in the Supreme Court and the apex court upheld the validity of these provisions in November 2023.
A two-member Delhi bench of NCLT directed to initiate corporate insolvency resolution process (CIRP) against Chandra, Chairman Emeritus of Zee Entertainment Enterprises Ltd (ZEEL), who was the guarantor of the loan given to Essay Group firm Vivek Infracon Ltd.
The NCLT bench, comprising members Ashok K Bhardwaj and Subrata K Das, however rejected similar petitions filed by two other creditors IDBI Trusteeship and Axi Bank.
The order was pronounced by the NCLT in open court and the detailed judgment is still awaited.
Indiabulls Housing Finance Ltd (IHFL) had moved NCLT after Vivek Infracon failed to pay nearly Rs 170 crore due in 2022.Vivek Infracon is a part of Chandra-promoted Essel Group.
Although some settlement negotiations took place, no payments were made to IHFL.
After the introduction of CIRP, Chandra will come under the moratorium provisions of the Insolvency and Bankruptcy Code (IBC) and will not be allowed to sell, sell or alienate any property or assets.
A resolution professional will be appointed by the insolvency tribunal, who will reconcile all the debts and help the financial creditors recover their money.
Earlier, Chandra had argued that a personal guarantor cannot be liable for insolvency proceedings and the NCLT has no power to initiate proceedings against him.However, in May 2022 the NCLT rejected this and the Tribunal held that I had the jurisdiction and authority to decide on the individual insolvency proceedings.
Subsequently, this was challenged by Chandra before the appellate tribunal NCLAT. However, the case was withdrawn as the parties decided to resolve the matter amicably.
However, the issue was revived again by the IHFL earlier this year after an agreement could not be reached with Chandra.
In 2019, the government amended the provisions of the IBC, allowing creditors to file insolvency proceedings against personal guarantors.This provision was challenged in the Supreme Court and the apex court upheld the validity of these provisions in November 2023.
