IDBI Bank approaches NCLT Again Against ZEEL Over Rs.225 Crore Default

IDBI Bank has once again approached the National Company Law Tribunal (NCLT), seeking to initiate insolvency proceedings against Zee Entertainment Enterprises Ltd (ZEEL) over an alleged default of more than ₹225 crore. The bank has filed the case under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016.

The claim relates to a Debt Service Reserve Agreement signed between ZEEL and IDBI Bank for credit facilities taken by Siti Networks. Siti Networks was promoted by Zee’s founders and Zee was a guarantor to the loan availed by Siti loan.

What is the matter all about?

The dispute between IDBI Bank and Zee Entertainment Enterprises Ltd (ZEEL) is linked to loans taken by Siti Networks, a company of the Essel Group. ZEEL had signed an agreement with IDBI Bank promising to keep a reserve to cover interest payments if Siti Networks failed to pay. In March 2021, when Siti defaulted, IDBI Bank demanded around ₹61.97 crore from ZEEL, along with other dues taking the total to nearly ₹150 crore. ZEEL refused, arguing that the default happened during the COVID relief period, when the Insolvency & Bankruptcy Code barred insolvency cases for such defaults. Both the NCLT and NCLAT agreed with ZEEL and dismissed IDBI’s petitions. Despite this, IDBI Bank has once again filed a case in 2025, now claiming over ₹225 crore. ZEEL has called the move malicious and says it will contest the matter strongly.

What ZEEL says?

ZEEL has strongly denied the allegations, saying the application has been filed with “mala fide intent to harass and damage the company’s reputation.”

ZEEL pointed out that similar pleas by IDBI Bank were already dismissed by both the NCLT (in May 2023) and the National Company Law Appellate Tribunal (NCLAT, in April 2025). Therefore, the company does not expect any financial impact from the latest filing.

Calling the application “malicious, fraudulent and meritless,” ZEEL said it will contest the case strongly and may even pursue legal action against IDBI Bank for malicious prosecution, defamation, and damages.

This is not the first time IDBI Bank has tried to recover the dues. Apart from the insolvency route, the bank had also approached the Debts Recovery Tribunal (DRT) under the Recovery of Debts and Bankruptcy Act, 1993. While its application before DRT Mumbai was withdrawn, another plea before DRT Delhi was dismissed in January 2025. IDBI’s appeal against this dismissal is still pending before the Debts Recovery Appellate Tribunal (DRAT), Delhi.