NCLAT Dismisses IDBI Bank’s Insolvency Plea Against Zee Entertainment

The National Company Law Appellate Tribunal (NCLAT) has dismissed IDBI Bank’s petition seeking to initiate insolvency proceedings against Zee Entertainment Enterprises Ltd (ZEEL).

The tribunal upheld the earlier ruling by the Mumbai bench of the National Company Law Tribunal (NCLT), which had rejected the plea on the grounds that the default occurred during the period protected under Section 10A of the Insolvency and Bankruptcy Code (IBC).

Section 10A bars insolvency filings for any default occurring on or after March 25, 2020, for a one-year period. This provision was introduced during the COVID-19 pandemic to shield companies from insolvency due to lockdown-related disruptions.IDBI Bank’s plea was based on a Rs 150 crore loan given to Siti Networks, for which ZEEL had acted as the corporate guarantor.

According to the bank, ZEEL failed to meet its obligations when the guarantee was invoked in March 2021. IDBI claimed a total default of Rs 149.60 crore. However, both the NCLT and NCLAT found that the default in question occurred within the Section 10A window, which permanently bars any insolvency application under Sections 7, 9, or 10 of the IBC for that period.

The appellate tribunal did give IDBI Bank the option to file a fresh case for any default occurring outside the protected period. This decision reinforces the scope and permanence of the COVID-era insolvency protections under Section 10A.

Delhi High Court Issues Notice on WazirX Crypto Asset Restructuring

The Delhi High Court has issued a notice in response to an interim application seeking to restrain the disposal and restructuring of crypto assets belonging to users of the cryptocurrency exchange WazirX. The application was filed within a pending writ petition from October 2024 by petitioners Sudhir Verma and Kunal Dhariwal, naming the Union of India and others as respondents. The matter was heard on March 28, 2025, by Justice Sachin Datta, who granted the respondents two weeks to file their replies.

At the center of the petition is a proposed Scheme of Arrangement dated March 12, 2025, initiated by Zettai Pte. Ltd., the company managing the WazirX platform. The petitioners claim this scheme affects user-held virtual digital assets (VDAs) that were not impacted by a cyberattack on the platform that occurred on July 18, 2024. Despite being unaffected, these assets—currently worth around ₹4,400 crore—are allegedly being subjected to rebalancing and liquidation to cover Zettai’s liabilities, including legal and administrative costs totaling over ₹259 crore. The petitioners argue this move is being carried out without obtaining user consent and infringes upon their property and data protection rights.

The restructuring scheme is also criticized for placing undue conditions on users. According to the plea, users are being compelled to withdraw legal proceedings and indemnify the platform as a prerequisite for any relief, regardless of their agreement to the terms of the restructuring. Further, concerns have been raised regarding the transparency of the voting process, which is being managed by a private advisor to the restructuring entity. The petition also highlights the unauthorized sharing of personal and financial data of over four lakh Indian users with foreign entities, raising significant data privacy issues.

The petitioners have also expressed concern that the ongoing restructuring process is being pursued in the High Court of Singapore, which they argue could be a deliberate attempt to sidestep Indian judicial scrutiny. This, they say, risks denying Indian users access to domestic legal remedies. In the broader writ petition, they have also called for the formation of a Special Investigation Team (SIT) consisting of experts in cybercrime, financial fraud, and digital asset regulation to investigate the cyberattack and ensure compliance with Indian law.

The petitioners are represented by advocates Navodaya Singh Rajpurohit, Rithik Dhariwal, and Dhawesh Pahuja. The matter is next scheduled to be heard on April 29.