NCLT rejects plea to start insolvency proceeding against Network18 Media
The Mumbai Bench of the National Company Law Tribunal (NCLT) on 4 August rejected a petition to start insolvency proceedings against Mukesh Ambani-owned Network18 Media & Investments Limited. The petition was filed by SITI Networks Limited, a Multi-System Operator functioning in the State of West Bengal.
The petition was filed before this Adjudicating Authority on the ground that the Network18Media failed to make payment of Rs 1,00,46,506 as principal and ₹ 1,49,06,813 as interest as on 12 January 2016, which is the date of default.
The bench of Mumbai NCLT rejected the petition based on technical grounds as the bench noticed many anomalies in the petition itself. The petition was filed in 2018 after a Board Resolution dated 1 August 2018 seeking to initiate corporate insolvency resolution process against Network18 Media & Investments Limited.
The tribunal noted that in the original petition, there was reference only to one agreement dated 1 September 2011. When this was challenged by the corporate debtor, Siti Network produced five agreements in the Rejoinder filed by it. These agreements were dated 24 May 2012 and 22 November 2011. In the rejoinder, though, there was no reference to the agreement dated 1 September 2011 at all. The tribunal observed that there is no reason why copies of these agreements were not sent along with the Demand Notice or annexed with the original company petition.
Siti Network has been found changing its positions, claiming in the Rejoinder that the invoices were raised based on all the agreements, which was not the stand taken in the original Petition at all.
Besides, the tribunal noted that under the IBC architecture, the claim of an operational creditor has to be based on the Demand Notice under section 8. In the present case, the Demand Notice did not specifically mention any agreement, but simply refers to “various agreements” executed between the parties to carry or place TV channels on the network of the claimant. Only a portion of the invoices had been annexed. Copies of the Agreements had also not been annexed, nor were any details furnished.
The operational creditor had also not attached the mandatory affidavit of no dispute required under section 9(3)(b) of the IBC.
Based on these anomalies, the bench rejected the petition for initiating insolvency proceedings against Network18 Media & Investments Limited.
