Rohtagi added that Zee had only provided a unique guarantee to sustain a shortfall for one interest payback tranche, not for Siti Network's debt.
Digital Desk: Zee Entertainment (Zee) was given some relief on Friday when the National Company Law Appellate Tribunal (NCLAT) decided to put a hold on the start of the insolvency process against Zee. After the NCLAT heard Punit Goenka, MD and CEO of Zee, challenge the company's insolvency proceedings, the decision was made.
Goenka stated in a statement on Friday that he respected the NCLAT's choice. "We are still dedicated to defending the interests of all interested parties. We're still concentrating on getting the anticipated merger with Culver Max Entertainment finished on time "he stated.
As the Mumbai bench of the National Company Law Tribunal (NCLT) admitted bankruptcy proceedings against Zee on a motion made by IndusInd Bank, a financial creditor of Zee, Goenka moved the NCLAT on Thursday.
Senior Attorney Mukul Rohatgi argued that the debt recovery process should take place through the Debt Recovery Tribunal rather than the Insolvency Code while representing Goenka at the NCLAT hearing on Friday. Zee was a guarantor on the loan.
Rohtagi added that Zee had only provided a unique guarantee to sustain a shortfall for one interest payback tranche, not for Siti Network's debt.
In addition, Rohtagi claimed that the NCLT violated the natural justice principle by admitting insolvency proceedings against Zee without listening to any of Zee's arguments.
As one of the biggest mergers in the media and entertainment industry, Zee and Sony are in the advanced stages of merging.
According to IndusInd Bank, which Zee was a guarantor for, the NCLT issue involved a default of Rs 89 crore by Siti Networks, a multisystem operator arm of the Zee Group.
Moreover, IndusInd Bank has filed a second insolvency petition with the NCLT against Siti Networks, where it has named Mohit Mehra as the resolution professional.
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