Subhash Chandra Challenges NCLT’s Five‑Member Bench in Personal Insolvency Case

Subhash Chandra Challenges NCLT’s Five‑Member Bench in Personal Insolvency Case Essel Group Chairman Subhash Chandra appeared before the NCLT on 2 September 2026 and opposed the formation of a five‑member bench to decide his personal insolvency case. He argued that the tribunal lacks statutory power to constitute such a bench. Key Developments Senior Advocate Sasmit Patra labelled the NCLT order “faulty and wrong” and claimed the bench is “not empowered”. The five‑member bench stayed the order of Nilesh Sharma , the third member appointed after a split verdict by a division bench. Solicitor General Tushar Mehta for dissenting creditors (LIC Housing Finance, Canara Bank, Union Bank) sought to revive the petition, citing “peculiar circumstances” and three divergent views. The NCLAT bench, chaired by Justice Yogesh Khanna, declined to entertain a separate challenge to the bench’s constitution and kept the appeal pending. Important Facts The NCLT barred Chandra from alienating assets and stayed an order allowing him to settle personal‑guarantee claims for about ₹6.5 crore against creditor claims of roughly ₹22,006 crore . The dispute centres on the interpretation of Section 79 and Section 419(5) & (6) . Patra argued that both judicial members, Ashok Kumar Bhardwaj and Nilesh Sharma, were aligned on the repayment plan, so a larger bench was unnecessary. UPSC Relevance Understanding the functioning of specialised tribunals like the NCLT and NCLAT is crucial for GS‑III (Economy) and GS‑II (Polity) topics on corporate governance and legal reforms. The case also highlights the role of the Solicitor General in protecting creditor interests, a point of relevance for law‑related questions. Way Forward The NCLAT has scheduled the next hearing for 7 October 2026 . Both sides are likely to argue over the statutory limits of bench composition and the applicability of Sections 79 and 419. Aspirants should monitor the outcome, as it may set a precedent on tribunal powers, affecting future insolvency proceedings and corporate restructuring policies.