The National Company Law Appellate Tribunal (NCLAT) halted the beginning of insolvency proceedings against Zee Entertainment Enterprises on Friday (Zee). The move came after Zee CEO Punit Goenka opposed the proceedings against the corporation.
The NCLAT has also served notice on IndusInd Bank. The matter will now be heard on March 29.
In court, Goenka’s attorney, Mukul Rohatgi, argued that the debt should be recovered through the Debts Recovery Tribunal rather than the Insolvency Code.
They claimed that Zee had provided a specific guarantee, not for Siti’s debt but solely to cover a deficiency in only one tranche of interest repayment. Goenka further argued that the NCLAT heard no arguments before beginning proceedings against Zee.
This week, NCLAT granted IndusInd Bank permission to petition for bankruptcy against Zee. IndusInd also filed an insolvency petition against Siti Networks.
Goenka further stated that the full sum was not recoverable from Zee, and the demand of Rs 83 crore is the primary amount loaned to Siti, and Zee never gave a guarantee for the transaction.
According to Mint, IndusInd Bank said that Zee was aware that bankruptcy procedures were underway in NCLT and assumed a risk by not responding to the insolvency proceedings.