In a significant development of the high-stakes personal insolvency proceedings of Essel Group founder Subhash Chandra, a special five-judge bench of the National Company Law Tribunal (NCLT) has issued a notice to the Central Bureau of Investigation (CBI). The tribunal has directed the central investigative agency to file its formal response within four weeks.
The directive comes against the backdrop of the CBI lodging a First Information Report (FIR) against Chandra and others in connection with an alleged Rs 1,322-crore loan fraud involving LIC Housing Finance. The probe agency's findings are expected to bear critical relevance to the insolvency examination, particularly regarding the disclosure of assets, fund flows, and the legitimacy of claims file in NCLT.
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The five-member bench-led by NCLT President Justice (Retd.) Anupinder Singh Grewal and including Judicial Members Bachu Venkat Balaram Das and Mahendra Khandelwal, along with Technical Members Atul Chaturvedi and Ravindra Chaturvedi-was constituted earlier this month to rehear the case from scratch. The formation of a five-judge bench was necessitated after a previous division bench and a subsequent reference judge produced divergent opinions, resulting in no clear majority verdict.
At the center of the dispute is a contentious repayment plan under Section 95 of the Insolvency and Bankruptcy Code (IBC). Chandra had proposed a repayment of approximately Rs 6.25 crore (plus Rs 25 lakh for insolvency resolution costs) against admitted creditor claims surpassing Rs 22,006 crore—effectively representing a haircut exceeding 99% for lenders.
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Dissenting institutional financial creditors, including LIC Housing Finance, strongly challenged the plan, alleging gross undervaluation, procedural irregularities, and the improper participation of related-party entities in the voting process. Upon taking up the matter, the five-judge bench had previously stayed the execution of the repayment plan and restrained Chandra from alienating, transferring, or creating third-party encumbrances on his personal assets, directly or indirectly.
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