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President Warns Subhash Chandra's Hearing Could Paralyze Tribunal
The (NCLT) President, Justice Anupinder Singh Grewal, has made a startling observation that adjudicating Subhash Chandra's during regular court hours could effectively bring the tribunal's functioning to a halt. The remark came amidst a hearing before a rare five-member constituted to resolve conflicting opinions on the plan proposed by the Chairman in his capacity as a . The case, filed by , has now become a flashpoint for deeper systemic concerns about NCLT's resources and the viability of the .
Background: The and Judicial Conflict
The controversy centers on a submitted by Subhash Chandra, offering a mere ₹6.25 crore against of a staggering ₹22,006.57 crore, along with ₹25 lakh towards . The plan was initially heard by a two-member NCLT bench comprising Judicial Member Ashok Kumar Bhardwaj and Technical Member Reena Sinha Puri. On , the two members issued —a clear indication of the legal complexity involved.
Pursuant to the difference of opinion, the matter was referred to a , Nilesh Sharma of the . Sharma approved the plan on . However, when the matter returned to the original bench on for a , the bench held that no had emerged, creating a . The case was then escalated to the NCLT President under .
For the first time in the tribunal's history, Justice Grewal constituted a five-member to hear the matter. The bench comprises Judicial Members Bachu Venkat Balaram Das and Mahendra Khandelwal, along with Technical Members Atul Chaturvedi and Ravindra Chaturvedi, with Justice Grewal presiding.
The Standstill Observation
During Wednesday's hearing, the bench grappled with the weight of the issues at hand. Justice Grewal orally remarked that if the tribunal were to hear Chandra's during regular court hours, it would consume disproportionate time and resources. “I think we are likely to get more Members; otherwise, if we start hearing this during the Court time, the functioning of NCLT would come to a standstill,” he observed. The statement underscores the acute shortage of judicial and technical members across NCLT benches, a problem that has been flagged repeatedly by the legal community.
The bench also took cognizance of an ongoing (CBI) probe into matters connected to the case. The court noted that the investigation “may have a bearing” on the proceedings. Consequently, the was directed to serve notice on the CBI, which was granted four weeks to file its response. The issued on , which stayed the approval of the , were extended until the final disposal of the case. The matter is now listed alongside several connected applications for arguments on .
Legal Analysis: The Procedural Maze and Its Implications
The case presents a rare and intricate procedural scenario under the . The use of a to break a deadlock, followed by a five-member , highlights the gaps in the IBC's . The fact that no majority emerged after the 's approval points to a potential flaw in the —whether a 's opinion automatically creates a majority or requires subsequent adoption by the original bench.
From a substantive standpoint, the 's viability remains highly questionable. Offering a fraction of the admitted debt—0.028%—raises serious concerns about the feasibility of resolutions under the IBC. The CBI's involvement further complicates matters, as any findings of could invalidate the plan altogether.
The President's remark about the tribunal's standstill is not hyperbole. NCLT benches are already overburdened with a mounting caseload of insolvency matters, resolution plan approvals, and related litigation. The recent case on delays in resolution plan approvals has already drawn attention to the chronic shortage of benches and infrastructure. Counsel in that case submitted that benches are being forced to sit “,” and that 18 more vacancies could arise over the next year due to retirements, urging the court to allow retiring members to continue until replacements are appointed.
Impact on Legal Practice and Insolvency Ecosystem
For legal practitioners, this case serves as a stark reminder of the systemic bottlenecks that plague the IBC. The formation of a , while necessary, diverts already scarce resources from other pending matters. The President's standstill comment signals that even high-value cases may face indefinite adjournments if member strength does not improve.
The 's intervention in the case may accelerate reforms, but for now, the NCLT must manage with its existing complement. The Subhash Chandra repayment case could become a test for how the tribunal handles complex proceedings without compromising its overall docket.
Moreover, the case underscores the importance of early settlement or admissible in matters, as full-blown litigation can exhaust the system. The outcome on will be closely watched by corporate lawyers, insolvency professionals, and creditors alike.
Conclusion
The NCLT's handling of Subhash Chandra's has exposed deep fissures in the tribunal's operational capacity. The President's candid acknowledgment of potential paralysis is a call to action for the government to expeditiously fill vacancies and provide infrastructure. As the hearing approaches, the legal community will be looking for not just a resolution of the plan, but also systemic improvements to ensure that justice does not become a casualty of resource constraints.
