The stay ordered by the National Company Law Appellate Tribunal (NCLAT) on initiation of insolvency proceedings against Zee Entertainment Enterprises will also result in other petitions against the media firm being kept in abeyance. The National Company Law Tribunal (NCLT) will await the appellate tribunal’s final orders before it starts hearing other insolvency petitions.

In January, IPRS had filed a petition at the tribunal under the Corporate Insolvency Resolution Process (CIRP) seeking payment of about ₹211.42 crore, while similar petitions were filed by IDBI Bank (₹149 crore) and Housing Development Finance Corporation (₹296 crore). Axis Finance, a subsidiary of private sector lender Axis Bank, had sought recovery of ₹61.64 crore.

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“Once the NCLAT has granted a stay against admission, the NCLT is unlikely to proceed further in any other pending insolvency proceedings against Zee. NCLT will likely await the outcome of the NCLAT appeal. In a way there is a default stay in the other cases,” Sumant Batra, insolvency lawyer, said.

On Friday, in a relief to Zee, the appellate tribunal stayed an order by NCLT that had directed initiation of insolvency proceedings against the media firm. Zee had moved the NCLAT after the Mumbai bench of the NCLT on Wednesday admitted a petition filed by private lender IndusInd Bank against the Essel Group company. The lender had filed the petition in February 2020, seeking payment of more than ₹83 crore, after the media firm failed to fulfil obligations under a Debt Service Reserve account agreement.

“As NCLT has ordered for initiation of the CIRP, there cannot be another order for CIRP against the same corporate debtor (Zee). Further, NCLAT has only stayed the impugned order of NCLT and not quashed the same, therefore NCLT may with regards to other pending applications of creditors against Zee either hear the matter and reserve the order or adjourn the same till appeal is decided,” Daizy Chawla, senior partner at S&A Law Offices, said.

“In case the appeal is decided in favour of the corporate debtor and the NCLT order is quashed, the CIRP applications filed against the corporate debtor shall stand revived. In case the appeal is decided against the corporate debtor then the said applications will be disposed of with the directions to file claim before IRP,” Chawla added.

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According to Shriram Subramanian, founder and MD at InGovern Research Services, all pending cases should be clubbed and heard as one single case as they all relate to payment defaults. “Since the higher court has given a stay, the lower courts would await the final ruling before it commences any action on the cases,” he said.

The NCLAT bench, which stayed the earlier order, had sought a reply from respondents in two weeks. The case is now listed for final disposal on March 29.