A five-member bench of the National Company Law Tribunal (NCLT) on 1 September stayed the operation of the 25 August verdict by a smaller bench of the tribunal in the personal insolvency case against Zee Group founder Subhash Chandra.
The Bench, which comprised President Justice (retd) Anupinder Singh Grewal, Judicial Members Bachu Venkat Balaram Das and Mahendra Khandelwal, and Technical Members Atul Chaturvedi and Ravindra Chaturvedi, said today that no clear majority view exists with respect to the previous verdict, legal news website Bar and Bench reported.
The dispute concerns a repayment plan proposed by Zee Group founder Subhash Chandra in personal insolvency proceedings initiated by Indiabulls Housing Finance Limited under Section 95 of the Insolvency and Bankruptcy Code (IBC).
Under the plan, Chandra proposed to pay ₹6.25 crore to creditors against admitted claims of ₹22,006.57 crore. Another ₹25 lakh was earmarked for insolvency process costs.
Separately, Canara Bank and Union Bank of India have approached the National Company Law Appellate Tribunal (NCLAT), challenging the NCLT order approving Subhash Chandra’s repayment plan in his personal insolvency proceedings.
The lenders have sought an urgent hearing and are likely to press for a stay on the NCLT order.
But what is the NCLT, and how does it differ from the NCLAT? Mint explains.
Both the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) are part of the corporate legal landscape in India.
The establishment of the NCLT and the NCLAT is described in the Companies Act, 2013. Sections 407 to 434 of Chapter 27 of the Companies Act, 2013, outline the legal framework for the NCLT and NCLAT. Section 408 provides the constitution of the NCLT, and Section 410 provides the constitution of the NCLAT. Sections 421 to 424 set out the procedures for filing and hearing appeals.
The purpose behind establishing the two tribunals to streamline the adjudication process for corporate disputes, insolvency proceedings, and other company-related matters. While they operate within the same legal framework, understanding the distinctions between the NCLT and the NCLAT is crucial for professionals, businesses, and legal practitioners seeking effective legal remedies.
The NCLT is the primary court of first instance for corporate disputes, while the NCLAT is the higher body that reviews appeals against NCLT orders.
Basically, the NCLT is a quasi-judicial body that deals with corporate disputes and insolvency matters at the first instance. The NCLAT, on the other hand, is an appellate authority that hears appeals against orders passed by the NCLT.
The NCLT started functioning on June 1, 2016 under Section 408 of the Companies Act, 2013. It replaced several older bodies, including the Company Law Board (CLB), the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) and the Official Liquidator.
This consolidation was made to make NCLT a single forum for resolving various company-related disputes.
-Resolving corporate disputes: Cases related to shareholder disagreements, mismanagement, and oppression.
