Subhash Chandra IBC Case, Volkswagen Case Reset, Tata Power Loss in Singapore, and More

“Environmental law could no longer remain a specialist subject taken up by only a small number of students."

-CJI Surya Kant while speaking at the high-level Commonwealth Policy Dialogue on Climate Justice in London

Subhash Chandra’s Repayment Plan
A third judge appointed at the NCLT this week to break the deadlock of a split verdict approved a repayment plan by Subhash Chandra, founder of the Essel group, in a personal insolvency case against him. The repayment plan gives a nod for ₹62.5 million to be paid, against admitted claims of over ₹220 billion leaving several creditors dissatisfied. 

From the numbers, it appears to be a haircut of more than 99% for the lenders, a plan that was surprisingly approved by about 80% of the lenders on the committee of creditors. However, Chandra’s office issued a clarification stating that he simply stood as a personal guarantor for some loans that went bad, and the amount in claims reported in the media is not debt borrowed by him.  

That context is important, but it does little to soften the optics of such a meagre recovery. While Chandra’s clarification speaks about his role, some of the lenders that dissented on the repayment plan are planning to appeal the decision. This order risks sending a troubling message for the IBC which has, right from its inception, struggled with sustainable recoveries from debtors. A high haircut has potential to dwindle creditors’ trust in the regime, particularly when public-sector lenders are among those left with almost nothing to recover.

Key Rulings:

Courts: 

• Bombay High Court questions the FDA over cancellation of Cipla Pharma’s wholesale drug sale licence

• Bombay High Court bench releases Skoda Auto Volkswagen’s tax dispute case more than a year after reserving orders on it on grounds that it was unable to pass the judgment within the timeline stipulated by the top court due to “exigency of work”. The case will be heard afresh by a new bench

• The Andhra Pradesh government told the state high court that it is taking all the necessary steps to ensure that the proposed Google-Adani data centre in Visakhapatnam does not harm the environent

Quasi Courts:

• NCLT Delhi approved by a 2:1 majority Essel group founder Subhash Chandra’s payment plan of ₹62.5 million in his personal insolvency case against claims of over ₹220 billion. The third judge was appointed to break the deadlock and rule on the issue after a two-judge bench passed a split verdict

Other:

• Centre notifies establishment of the Mediation Council of India with a head office in Delhi

• Supreme Court judge, Justice Manmohan flags that Indian lawyers are not getting enough arbitral appointments at the SIAC while speaking at an event

• Justice BV Nagarathna of the Supreme Court warns that it is not a good sign for the legal profession when the bar council does not earn the respect of its members while delivering her address at the NLU, Delhi

• A Singapore commercial court has rejected Tata Power’s challenge to an arbitral award which directed the company to pay 490 million dollars to Kleros Capital

• In a convocation tussle still going on, the convocation for NLSIU Bangalore was cancelled after the students rejected the demand to publicly invite CJI Surya Kant

The Big Listings:

• Aug 31: Supreme Court to hear a PIL plea seeking labelling of E20 fuel

• Sep 2: Andhra Pradesh High Court to hear PIL against Google’s proposed data centre in Visakhapatnam

• Sep 4: Securities Appellate Tribunal to hear appeal by Jane Street challenging SEBI’s move to allegedly refuse access to important documents to the firm in the case against it

• Sep 9: Bombay High Court to hear Vijay Mallya’s plea against an order of special criminal court

* The dates of hearing can change and a concrete list is prepared just a day before