IDBI Bank moves NCLT against ZEEL again; company calls move ‘malicious'

New Delhi: IDBI Bank has filed a new insolvency petition against Zee Entertainment Enterprises Limited (ZEEL) at the National Company Law Tribunal (NCLT), Mumbai Bench, claiming a default of Rs 225.23 crore.

The application, filed under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, is the third attempt by the bank to initiate a Corporate Insolvency Resolution Process (CIRP) against ZEEL over the same debt. 

The claim arises from a Debt Service Reserve Agreement linked to credit facilities extended to Siti Networks, where ZEEL acted as a corporate guarantor.

In its regulatory filing with the BSE and NSE, ZEEL described the petition as “malicious, fraudulent and meritless” and alleged that it was filed “with mala fide intent to harass and cause disrepute to the Company.” 

ZEEL further said it is taking necessary steps to contest the case and may also pursue legal remedies against the bank, including action for malicious prosecution, defamation and damages.

The dispute traces back to 2019, when Siti Networks’ account turned into a non-performing asset (NPA). IDBI Bank subsequently invoked ZEEL’s guarantee in March 2021, initially demanding Rs 61.97 crore. The current claim, now pegged at Rs 225.22 crore, includes principal, interest and other charges.

This is not the first time IDBI Bank has pursued insolvency action against ZEEL. A similar plea filed in 2022 was dismissed by the NCLT on May 19, 2023, as the alleged default fell within the protected period under Section 10A of the IBC. 

The NCLAT upheld this dismissal on April 7, 2025. Separately, IDBI Bank’s attempts to recover the dues under the Recovery of Debts and Bankruptcy Act were also rejected by the Debt Recovery Tribunal in Delhi on January 13, 2025, with an appeal still pending.

ZEEL has insisted that the fresh plea will not have any financial impact on the company, citing IDBI Bank’s repeated failure to secure relief in earlier proceedings.