NCLAT Dismisses IDBI Bank’s Insolvency Plea Against Zee
Why in the news
The National Company Law Appellate Tribunal (NCLAT) backed the NCLT Mumbai order refusing IDBI Bank’s bid to push Zee Entertainment Enterprises into insolvency. The relief may be temporary.
Key facts
- Claim: about ₹150 crore of unpaid dues.
- Basis: Section 10A, IBC 2016, shielding defaults in the Covid-19 window of 25 March 2020 to 25 March 2021.
- Zee’s default date was 5 March 2021, so protected.
- IDBI Bank may file a fresh case for defaults after the window.
Background of the dispute
| Point | Detail |
|---|---|
| Origin | 2012 Zee guarantee for a debt service reserve account (DSRA) on IDBI’s working capital loan to Siti Networks |
| Timeline | Siti’s loan turned NPA in December 2019; IDBI invoked the guarantee in March 2021, seeking ₹61.97 crore |
| Zee’s defence | Cover limited to interest on the original ₹50 crore loan; DSRA duties ended February 2021 |
Significance
- Stresses timely invocation of guarantees and the Covid-19 shield.
- Legal uncertainty persists since a fresh petition is possible.
Exam angle
- Provision: Section 10A, IBC 2016.