NCLAT rejects Saregama India plea to initiate insolvency against Chennai-based movie producer

The National Company Law Appellate Tribunal (NCLAT) has dismissed a plea filed by Saregama India Ltd to initiate insolvency proceedings against Chennai-based Home Movie Makers observing that it is not a financial creditor under the Insolvency and Bankruptcy Code (IBC)

Press Trust of India October 30, 2019 13:54:15 IST
NCLAT rejects Saregama India plea to initiate insolvency against Chennai-based movie producer
  • A two-member bench headed by Chairperson Justice S J Mukhopadhaya upheld the earlier order passed by the Chennai bench of NCLT on 14 February in the matter, which had rejected Saregama's plea

  • NCLAT observed that as per the terms and conditions and the clauses in the marketing agreement between them, money paid by Saregama cannot be termed as financial debt

  • NCLAT further said it was of firm opinion that Saregama has not disbursed money against the consideration for the time value

New Delhi: The National Company Law Appellate Tribunal (NCLAT) has dismissed a plea filed by Saregama India Ltd to initiate insolvency proceedings against Chennai-based Home Movie Makers observing that it is not a financial creditor under the Insolvency and Bankruptcy Code (IBC).

The appellate tribunal held that the advance money paid by the RP-Sanjiv Goenka Group company to film producer Home Movie Makers for using the free commercial time (FCT) while telecasting of Tamil Commercial Serial titled Ganga on Sun TV channel, was not a financial debt under the definition given in the IBC.

NCLAT rejects Saregama India plea to initiate insolvency against Chennaibased movie producer

Representational image. News18.

A two-member bench headed by Chairperson Justice S J Mukhopadhaya upheld the earlier order passed by the Chennai bench of NCLT on 14 February in the matter, which had rejected Saregama's plea.

NCLAT observed that as per the terms and conditions and the clauses in the marketing agreement between them, money paid by Saregama cannot be termed as financial debt.

"We are of the view that the appellant (Saregama), who claims to be a financial creditor, however, claims made by it, is not a financial debt," said NCLAT.

It further added, "It is reiterated that in the marketing agreements and subsequent correspondence exchanged between the appellant and the respondent (Home Movie Makers), no way it is mentioned that the amount paid by the appellant to be repayable along with interest over a period of time in a single or series of payments in future."

NCLAT further said it was of firm opinion that Saregama "has not disbursed money against the consideration for the time value".

Updated Date:

also read

Essar Steel insolvency: Numetal moves NCLAT ahead of lenders' meet, hopes to pre-empt plausible call for fresh bids
Business

Essar Steel insolvency: Numetal moves NCLAT ahead of lenders' meet, hopes to pre-empt plausible call for fresh bids

Ahead of the lenders' meeting on Friday which may ask for fresh bids for the bankrupt Essar Steel's assets, Numetal on Thursday approached the NCLAT

NCLAT asks 4 IL&FS group entities to submit information over investment made by pension and provident funds
Business

NCLAT asks 4 IL&FS group entities to submit information over investment made by pension and provident funds

The NCLAT also made clear that it has not stopped IL&FS and its group entities from going for a resolution process

IL&FS case: Reserve Bank of India moves NCLAT seeking modification in order related to NPAs
Business

IL&FS case: Reserve Bank of India moves NCLAT seeking modification in order related to NPAs

NCLAT said RBI cannot restrict it from prohibiting banks from 'asset classification' and observed that any change in this order would upset the entire resolution process