IDBI Bank again files insolvency plea against ZEEL for over ₹225 cr default

IDBI Bank moves NCLT against ZEEL over ₹225 crore default claim; ZEEL terms plea "malicious" as earlier applications were dismissed by NCLT and NCLAT

IDBI Bank has again filed a plea in the National Company Law Tribunal (NCLT) as a financial creditor to initiate corporate insolvency resolution process against Zee Entertainment Enterprises Ltd (ZEEL) to claim a default worth over ₹225 crore, ZEEL stated in a stock exchange filing.

 

ZEEL has been given a notice by IDBI Bank under Section 7 of the Insolvency and Bankruptcy Code (IBC) 2016, with Rule 4 of the Insolvency and Bankruptcy Rules, it stated. ZEEL further said that the bank’s purported claim under the present application arises from a Debt Service Reserve Agreement entered into by the IDBI Bank and ZEEL for credit facilities availed by Siti Networks.

 

It added in its stock exchange filing that the present application is with “mala fide intent to harass and cause disrepute to the company”. ZEEL said that since IDBI Bank’s pleas have been dismissed by the NCLT and the National Company Law Appellate Tribunal (NCLAT) before, it does not expect any financial implication.

 

ZEEL further added: “The application is malicious, fraudulent and meritless, and an abuse of the process of law. The company vehemently disputes the bank’s claims, and is taking all necessary and appropriate steps to contest the same. The company may also adopt legal remedies against the bank, including for malicious prosecution, defamation and damages, as may be advised to it.”

 

This follows IDBI Bank filing an application in 2022, under Section 7 of the Code against ZEEL on the same matter, which was dismissed by NCLT through its order dated May 19, 2023. Later, an appeal filed by the IDBI Bank before NCLAT, Delhi, challenging the May 19 order, was also dismissed on April 7, 2025.

 

According to ZEEL, IDBI Bank had also attempted to make a claim for the same purported debt against it under the Recovery of Debts and Bankruptcy Act, 1993, by first filing an original application before the Debts Recovery Tribunal (DRT), Mumbai. This was later on dismissed as the application was withdrawn. Additionally, DRT Delhi, through its order on January 13, 2025, dismissed the original application. The appeal filed by IDBI Bank against the January 13 order is still pending adjudication and disposal before the Debts Recovery Appellate Tribunal, Delhi. 

Legal tussle

• IDBI seeks recovery of over ₹225 crore
• Dispute linked to  Debt Service Reserve Agreement for  Siti Networks
• Zee calls the plea mala fide, with no financial impact