New Delhi, Aug 31 (PTI) An NCLT bench on Monday referred the personal insolvency case against media baron Subhash Chandra to the tribunal's chairperson for fresh adjudication after failing to reach majority consensus on a proposed Rs 6.5 crore repayment plan against admitted claims of over Rs 22,000 crore.

Meanwhile, lenders, who opposed the repayment plan proposing a deep 99.97 per cent haircut, moved the appellate tribunal, NCLAT, against a third member's order approving the plan.

Earlier, the matter had been referred to the Third member, as the two-member division bench of Ashok Kumar Bhardwaj (Member Judicial), and Reena Sinha Puri (Member Technical), gave a split verdict on the repayment plan.

The third member's order dated August 26, backing the Rs 6.5 crore repayment plan, was sent back to the original division bench for a formal order in line with the majority opinion, as required under Section 419 (5) of the Companies Act, 2013.

However, the division bench of Ashok Kumar Bhardwaj and Reena Sinha Puri on Monday said no majority view has emerged despite reconsidering the matter, following a differing opinion from a Third Member of the tribunal, and referred the matter back to the NCLT President.

The bench said the "Third Member consciously passed an independent order. Thus, no majority view emerges" and hence "no order can be passed at this stage".

"While Member (Technical) rejected the plan, the Member (Judicial) confined the plan to those who accepted and approved it and accorded liberty to dissenting creditors to recover their debt. He did not extinguish the claim of banks/financial institutions/dissenting creditors qua principal debtor/debtor/PG. The Third Member approved the plan but extinguished the right of all the creditors by applying Section 115(1) of the Code uniformly," it said.

Earlier in the day, in a precautionary move, dissenting lenders of Subhash Chandra moved before the insolvency appellate tribunal NCLAT, on the basis of the order/opinion by the third member who approved a Rs 6.5 crore payment by the Essel Group chairman over creditor claims of about Rs 22,006.57 crore in his personal insolvency resolution process.

Solicitor General Tushar Mehta, appearing for LIC Housing Finance, mentioned it in the morning before an NCLAT bench, comprising Officiating Chairperson Justice Yogesh Khanna, and sought an urgent hearing in the second half of the day.

Mehta, who also represented Canara Bank and Union Bank, said that if the order is allowed to continue, it will "defeat the very purpose of the Insolvency & Bankruptcy Code" and requested that the bench hear it at 2 PM.

However, the National Company Law Appellate Tribunal (NCLAT) agreed to list the matter for hearing on Tuesday.

The dispute has arisen over the interpretation of Section 79(2)(g) of the IBC and its interplay with the procedural provisions of Section 115(1), which deals with approval of a repayment plan by creditors.

In the original order, Bhardwaj had confined the approval of the repayment plan only to creditors who voted in its favour — about 80.8 per cent of creditors -- while granting liberty to dissenting financial institutions and banks, comprising roughly 19.2 per cent, to independently pursue debt recovery against Chandra outside the plan.

However, the Third Member of the tribunal, in an independent order, took a different view, applying Section 115(1) uniformly to all creditors. This approved the plan but extinguished the claims of all creditors, including dissenting banks and financial institutions, against the personal guarantor.

The bench noted the Third Member also disagreed with both members on the scope of the Adjudicating Authority's jurisdiction to question the Section 112 report submitted by the Resolution Professional on creditors' meetings.

Sharma rejected the claims of the dissenting creditors led by LIC Housing Finance, which had argued that the payout was "unviable and unlawful".

It had contended that against admitted claims of approximately Rs 22,006.57 crore, the repayment plan proposed the payment of only Rs 6.25 crore to creditors and Rs 25 lakhs towards process costs.

Sharma, in its 144-page-long order, said the resolution professional's valuation showed Chandra's personal estate was worth significantly less than the amount offered under the plan, and that dissenting creditors were unlikely to recover more by rejecting it, since he would then face bankruptcy rather than being able to pay from a position of financial recovery. PTI KRH KRH MR