SC greenlights IDBI Trusteeship to contest NCLAT's dismissal of petition against Essel Group cos

Supreme Court has granted permission to IDBI Trusteeship Services to present its case challenging the National Company Law Appellate Tribunal (NCLAT) decision that dismissed its insolvency petition against Cyquator Media Services and Direct Media Distribution Ventures, both belonging to the Essel Group.

Chief Justice of India (CJI) DY Chandrachud-led bench has served a notice to the two companies, directing them to respond within four weeks. Cyquator Media Services operates as a promoter group entity for Zee Entertainment Enterprises Ltd (ZEEL).

In September, the NCLAT rejected IDBI Trusteeship Service's appeal, reasoning that the default occurred in June 2020, making Section 10A of the Insolvency and Bankruptcy Code, 2016 (IBC) applicable. This section prohibits the filing of insolvency under Sections 7, 9, and 10 for defaults from March 25, 2020, to March 25, 2021. Additionally, a few days prior, the appellate tribunal also dismissed IDBI Trusteeship's petition against Direct Media Ventures.

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