NCLT Admits Indiabulls’ Insolvency Plea Against Essel Group Chairman Subhash Chandra

NCLT Admits Indiabulls’ Insolvency Plea Against Essel Group Chairman Subhash Chandra

The housing finance company had approached the tribunal after a loan of Rs.170 crores given to Vivek Infracon turned into a non-performing asset

The Delhi bench of the National Company Law Tribunal (NCLT) Delhi has admitted a petition filed by Indiabulls Housing Finance (IBHF) seeking initiation of insolvency proceedings against Subhash Chandra, the chairman of the Essel Group.

IBHF had moved the tribunal under Section 95 of the Insolvency and Bankruptcy Code (IBC), 2016 over outstanding loan amounts to be furnished by Chandra, as he was a personal guarantor in an agreement executed between IBHF and Vivek Infracon.

(A personal guarantor gives written assurance of loan repayment or credit facility on behalf of the creditor company. If the creditor fails to repay the debt, the debtor can attach the guarantor’s assets).

The Coram of Ashok Kumar Bharadwaj (Judicial Member) and Subrata Dash (Technical Member) passed the order after finding the outstanding debt.

The order read, “From the report of the resolution professional for Vivek Infracon, the debtor did not adduce any evidence to prove the debt repayment as claimed unpaid by the IBHF. We have no option but to admit the petition filed under Section 95 of the IBC.”

Thus, a moratorium commenced against Chandra related to all debts. During this period, any pending legal action, or proceedings against him have been stayed.

The creditors will also not initiate any legal action against Chandra till the conclusion of the Corporate Insolvency Resolution Process (CIRP).

Chandra has also been restrained from disposing or transferring his assets.

In 2022, the IBHF had approached the NCLT after a loan of Rs.170 crores to Vivek Infracon turned into a non-performing asset.

Chandra argued that the deed of guarantee was vitiated, as it was obtained under undue influence. He stated that a condition in the agreement had absolved him from liability. On the loan agreement, Chandra said that IBHF had already invoked the arbitration clause.

NCLT also rejected the individual insolvency pleas against Chandra by IDBI Trusteeship and Axis Bank.

Advocates Sumesh Dhawan, Shaurya Shyam, Chirag Sharma and Shikhar Misra appeared for IBHF.

Advocates Vaibhav Gaggar, Ritwika Nanda, Shefali Mande, Maitry Bhandari and Dev Karan represented Chandra.

Advocates Vinod Chaurasia and Rajkamal Sawroop appeared for the Resolution Professional of Vivek Infracom

Advocates Gaurav Mitra, Sachin Chandarana, Sanidhya Kumar, and Manan Bhindora appeared for IDBI.

Senior Advocate Abhinav Vasisht and Advocates Priya Singh, Manmeet Singh, Yashvardhan Bandi, Ishu Gupta, and Maulik Khurana represented Axis Bank.