On Friday, the National Company Law Appellate Tribunal (NCLAT) stayed the initiation of insolvency proceedings against Zee Entertainment Enterprises (Zee). The move came after Punit Goenka, chief executive of Zee, challenged the proceedings against the company.
The NCLAT has also issued notice to IndusInd Bank. The case will now be heard on March 29.
In the court, advocate Mukul Rohatgi appeared for Goenka and said that the recovery of the loan must go through the Debts Recovery Tribunal and not through Insolvency Code.
They said that Zee had given a special guarantee, not for Siti's debt, but only to maintain a shortfall in only one tranche of interest repayment. Goenka further stated that the NCLAT heard no arguments before initiating the proceedings against Zee.
NCLAT had, earlier this week, allowed IndusInd Bank to file for insolvency proceedings against Zee. IndusInd also filed an insolvency petition against Siti Networks.
Goenka also said that the entire amount was not recoverable from Zee, and the demand of Rs 83 crore is the principal amount loaned to Siti, and Zee never issued a guarantee for the loan.
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IndusInd Bank argued that Zee knew that insolvency proceedings were pending in NCLT and took a chance by not responding to the insolvency proceedings, as reported by Mint.
