The National Company Law Appellate Tribunal (NCLAT) on Thursday has granted IDBI Bank a hearing for insolvency proceedings against Zee Entertainment Enterprises Limited (ZEEL). The plea for the hearing revolves around recovery of outstanding dues amounting to Rs150 crore approximately.
IDBI Bank has requested a one-week extension to furnish supplementary documentation. The next scheduled hearing is set for August 31.
IDBI Bank’s petition alleges that Zee had previously committed to guarantee loans issued to Siti Networks via a Debt Service Reserve Account (DSRA) Guarantee. According to the lender, Siti Networks was mandated to maintain the DSRA, encompassing two quarters of interest for term loan and working capital, along with one quarter for principal payment.
The petition also asserts that Zee had provided a guarantee and held accountability for any deficiencies in the DSRA and also mentions that the company had been notified regarding these deficiencies said the claim.
Zee has contested the lender’s request and has moved to have it dismissed.
In May 2023, the NCLT at Mumbai refused to entertain IDBI’s plea noting that it was barred under Section 10A of the Insolvency and Bankruptcy Code (IBC).
Section 10A mandates no application for initiation of corporate insolvency resolution process (CIRP) can be filed against any debtor by any financial and operational creditor for any default arising on or after March 25, 2020, for a period of one year.