Relief for Zee! NCLAT stays NCLT insolvency proceedings order over IndusInd appeal 

In a relief for Zee Entertainment Enterprises, the National Company Law Appellate Tribunal (NCLAT) has stayed an order passed by the National Company Law Tribunal (NCLT) initiating the corporate insolvency resolution process (CIRP) for the entertainment company, following a petition filed by IndusInd Bank.

A bench of NCLAT Chairperson Justice Ashok Bhushan and Member (Technical) Barun Mitra stated in the order, “Issue notice to respondents. Reply in two weeks, rejoinder in two weeks thereafter. List for final disposal on March 29. Till that time, the order dated February 22 is stayed,” as mentioned in a report in Bar and Bench.

Appearing for IndusInd Bank, Senior Advocate Rajiv Nayar argued that Zee has been going from one court to another, taking their chance. “Today, they can't argue that they have not been heard,” said Nayar, as per the report.

Zee has argued that the NCLT order was in complete violation of principles of natural justice.

The case revolves around IndusInd’s appeal against Zee for resolution of a total financial debt of around Rs 90 crore. It sought CIRP under the Insolvency and Bankruptcy Code (IBC) against Zee. The matter pertains to a default by Zee Group's multi-system operator arm Siti Networks, for which ZEEL was a guarantor.

Zee filed a cross application challenging the maintainability of the petition by the bank, which was rejected by the NCLT. The tribunal also rejected the oral request by Zee to stay the order for two weeks.

It then appointed an interim resolution professional, which prompted Punit Goenka to approach NCLAT.

As per the existing bankruptcy laws, ZEEL can settle the dues with the private sector lender, which can help avoid troubles for its merger with Sony. The merger has already received multiple statutory clearances, but some of the lenders are insisting on clearing their dues before moving ahead.

"We respect the decision taken by the Hon’ble National Company Law Appellate Tribunal (NCLAT) and remain committed towards protecting the interests of all stakeholders. Our focus continues to be on the timely completion of the proposed merger," stated Punit Goenka after the order.

Also read: Zee moves NCLAT against NCLT admitting IndusInd Bank’s challenge to Zee-Sony merger