NCLT admits insolvency plea filed by Indiabulls against Essel Group Chairman Subhash Chandra

The National Company Law Tribunal (NCLT) Delhi has admitted a petition filed by Indiabulls Housing Finance (IBHF) seeking initiation of insolvency proceedings against Essel Group Chairman Subhash Chandra..IBHF had moved the Tribunal under Section 95 of the Insolvency and Bankruptcy Code (IBC) over outstanding loan amounts to be furnished by Chandra as he was personal guarantor in an agreement executed between IBHF and Vivek Infracon.A personal guarantor gives written assurance of repayment of loans or credit facility on behalf of creditor company. In the event the creditor company does not repay the debt, the personal assets of the guarantor can be attached by the debtor..A coram of judicial member Ashok Kumar Bharadwaj and technical member Subrata Dash passed an order on April 22 after finding no evidence of repayment of the outstanding debt.“From the report of the resolution professional for Vivek Infracon, it is clear that the debtor did not adduce any evidence to prove the repayment of the debt as claimed unpaid by the IBHF. In the wake, we are left with no option but to admit the petition filed under Section 95 of IBC, 2016. Ordered accordingly,” the order says..In view of this order, a moratorium has commenced against Chandra in relation 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 of legal proceedings against Chandra till the Corporate Insolvency Resolution Proceedings (CIRP) concludes.Chandra has also been restrained from disposing or transferring any of his assets..IBHF had moved the NCLT in 2022 after a loan of ₹170 crore given to Vivek Infracon had turned into a non-performing asset.Chandra argued that the deed of guarantee was vitiated as it was obtained under undue influence. He also argued that a condition in the agreement had absolved him from liability.As for the loan agreement, Chandra argued that IBHF had already invoked the arbitration clause..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 appeared for Chandra.Advocates Vinod Chaurasia, Rajkamal Sawroop appeared for the Resolution Professional of Vivek InfracomAdvocates Gaurav Mitra, Sachin Chandarana, Sanidhya Kumar, Manan Bhindora appeared for IDBI. Senior advocate Abhinav Vasisht with Advocate Priya Singh, Manmeet Singh, Yashvardhan Bandi, Ishu Gupta, Maulik Khurana appeared for Axis Bank..[Read order]