The National Company Law Appellate Tribunal (NCLAT) is scheduled to address IDBI Bank’s plea against Zee Entertainment in a Thursday hearing concerning insolvency proceedings. IDBI bank had contested the Mumbai NCLT’s orders, which dismissed their request to initiate insolvency proceedings against Zee Entertainment Enterprises Ltd.
The NCLT’s verdict was rooted in ZEEL’s role as the corporate guarantor for a loan taken by Siti Networks, with the default falling under the timeline specified by section 10A of the IBC. In May 2023, the Mumbai NCLT declined to entertain IDBI’s plea, citing Section 10A of the Insolvency and Bankruptcy Code (IBC), prohibiting certain applications for corporate insolvency resolution processes for defaults arising after March 25, 2020, for a year.
The NCLT highlighted ZEEL’s role as guarantor for a loan taken by Siti Networks, the principal borrower of IDBI Bank. The default was within the period mentioned in Section 10A. On March 5, 2021, IDBI Bank invoked the ZEEL-guaranteed debt, demanding payment of Rs 61.97 crore plus further interest from February 18, 2021. ZEEL contested, asserting their limited liability as a guarantor.
NCLAT will now deliberate on IDBI’s appeal against this backdrop.