Chandra challenges NCLT's authority to form five-member bench in insolvency case

Senior Advocate Sasmit Patra, representing Chandra before the National Company Law Appellate Tribunal on Wednesday, contended that the NCLT's order establishing the larger bench was "faulty and wrong" and that the tribunal possessed no authority to form such a configuration. The five-member bench was constituted following a split verdict delivered by a two-member NCLT division, with a third member subsequently added to break the deadlock.

Patra raised procedural objections regarding the formation and functioning of the expanded bench, questioning the legal basis under which it operated and when its members formally convened. The five-member bench had previously stayed an order permitting Chandra to settle claims arising from personal guarantees extended on behalf of Essel Group borrowings amounting to approximately Rs 6.5 crore, against total claims valued at roughly Rs 22,006 crore.

The tribunal's earlier decision also imposed restrictions on Chandra's ability to alienate his personal assets pending resolution of the insolvency proceedings. The case highlights ongoing jurisdictional disputes within India's insolvency resolution framework, particularly concerning the procedural mechanisms available to tribunals when addressing deadlocked decisions in high-value corporate disputes.