The National Company Law Appellate Tribunal (NCLAT) has postponed its hearing to December 6, 2023, regarding IDBI Bank’s plea to initiate insolvency proceedings against Zee Entertainment Enterprises Limited (ZEEL). The rescheduling was due to Siti Networks’ violation of Debt Service Reserve Account (DSRA) terms. The hearing was initially scheduled for November 8, 2023.
In a separate petition on the same day, IDBI Bank challenged the merger between ZEEL and Culver Max Entertainment, previously known as Sony (NYSE:) Pictures Networks India. The details of this challenge are yet to be disclosed.
Earlier this year in May, the Mumbai branch of the National Company Law Tribunal (NCLT) rejected IDBI Bank’s insolvency plea against ZEEL. The tribunal cited Section 10A of the Insolvency and Bankruptcy Code (IBC), which prohibits insolvency proceedings for defaults that occurred between March 25, 2020, and March 25, 2021. This law was introduced as economic activities resumed post-lockdown.
The conflict between IDBI Bank and ZEEL started when the bank invoked ZEEL’s guarantee following Siti Networks’ default on a working capital facility loan on March 5, 2021. This led to a payment demand of Rs 61.97 crore and a total default claim of Rs 149.60 crore from IDBI Bank. However, since the default fell within the period protected by Section 10A of the IBC, NCLT Mumbai rejected IDBI Bank’s insolvency plea.
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