NCLAT defers hearing of Zee-IDBI insolvency case to November 8

On Wednesday, the National Company Law Appellate Tribunal (NCLAT) deferred the hearing of IDBI Bank's plea against Zee Entertainment Enterprises to November 8, 2023.

The plea is regarding the initiation of insolvency proceedings against the company. IDBI Bank is in the process of pursuing outstanding dues amounting to approximately Rs 150 crore from Zee.

During the prior hearing, the tribunal issued a notice to Zee, recognising the significance of the case, and instructed both parties to provide their responses and counter-arguments.

IDBI Bank has challenged the ruling of the National Company Law Tribunal's (NCLT) Mumbai bench, dated May 19, which rejected its petition to initiate insolvency proceedings against ZEEL. This decision was grounded on a statutory constraint delineated in Section 10A of the Insolvency and Bankruptcy Code (IBC).

As per the NCLT's directive, ZEEL, serving as the corporate guarantor for a loan obtained by Siti Networks (the primary borrower of IDBI Bank), had indeed defaulted during the stipulated period governed by Section 10A.

Nevertheless, IDBI Bank asserted that the default transpired prior to this designated time frame. The bank maintained that the default was linked to a debt service reserve account (DSRA) guarantee, furnished by ZEE to secure loans extended by IDBI Bank to Siti Networks. Both of these entities were constituents of the Essel Group.

Previously, IndusInd Bank had submitted an application against ZEE, which the NCLT accepted on February 22. Later on, ZEE arrived at an agreement with IndusInd Bank.

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