The National Company Law Appellate Tribunal (NCLAT) has adjourned the hearing for IDBI Bank's plea against Zee Entertainment Enterprises Limited (ZEEL). The plea is over the initiation of insolvency proceedings against Zee.
IDBI Bank is making an effort to get Zee to pay overdue debts of Rs 150 crore. The tribunal acknowledged the significance of the matter in a notification it sent to Zee during the prior hearing, and it instructed both parties to provide their rejoinders and responses, according to Mint.
IDBI Bank has appealed the 19 May ruling of the National Company Law Tribunal's (NCLT) Mumbai bench, which rejected its application to file for bankruptcy against ZEEL. A statutory restriction included in Section 10A of the Insolvency and Bankruptcy Code (IBC) served as the foundation for this.
The code's Section 10A prohibits the filing of bankruptcy for defaults that happened between 25 March, 2020, and 25 March, 2021, which is the COVID-19 period.
According to ZEEL, the guarantee was insufficient and did not pay off the whole amount.
The NCLT ordered that ZEEL, the corporate guarantee for a loan taken out by IDBI Bank's major borrower, Siti Networks, had defaulted within the allotted time frame under Section 10A.
IDBI Bank, however, argued that the default happened earlier. The bank asserted that ZEE's debt service reserve account (DSRA) guarantee, which was used to obtain loans from IDBI Bank to Siti Networks Ltd., both entities belonging to the Essel Group, was the reason for the default.
Earlier, IndusInd Bank has also filed a plea against ZEEL for the same reason.