NCLT admits insolvency plea by IDBI Trusteeship against Reliance Broadcast Network

The National Company Law Tribunal (NCLT) has admitted the insolvency plea filed by IDBI Trusteeship Services against Reliance Broadcast Network, which operates Big FM. 

The Mumbai bench of the NCLT has appointed Rohit Ramesh Mehra as the insolvency resolution professional.

A petition was filed by IDBI Trusteeship, which approached the tribunal after Reliance Broadcast Network purportedly failed to repay dues of over Rs 174 crore. 

"We are of the considered view that since the Registered office of the Corporate Debtor (Reliance Broadcast) is in Mumbai this Tribunal has territorial jurisdiction over the present subject matter by virtue of Section 60(1) of the Code," the bench observed. 

Before the Tribunal admitted the petition, Reliance Broadcast Network's legal representative argued that the Mumbai bench of the NCLT lacks jurisdiction as the parties have conferred a nonexclusive jurisdiction to the Tribunals in New Delhi with regard to any dispute to the agreements in question.

Reliance Broadcast Network, through its counsel, also contended that the purported debt has not been determined correctly.

"The petitioner has not provided any particulars of the claim of Rs 174 crore...the alleged amount in default is in the nature of damages and penal interest which is impermissible under the Code," the company further argued. 

In response to this, the IDBI Trusteeship argued, through its legal representative, that the debenture holder had issued a notice on July 14, 2021, to Reliance Capital to make payments, owed by the Reliance Broadcast Network. Following this, a legal notice was also issued on November 15, 2021, to the company and its guarantor Reliance Capital to repay the outstanding amount.

It went on to add that both the notices went unanswered, following which IDBI Trusteeship was forced to approach the Tribunal.

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