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Operational creditor files Rs 211-cr insolvency case against Zee

The Indian Performing Right Society (IPRS) Ltd has moved the insolvency tribunal NCLT against Zee Entertainment Enterprise Ltd, claiming a default of ₹211.41 crore, the media major said in a regulatory filing.

However, Zee Entertainment Enterprise Ltd (ZEEL) added that it “will be filing its reply rejecting the claim on, inter alia, the ground that there is a pre-existing dispute between the parties on the claimed amount… ”

IPRS, which is a non-profit society comprising authors, composers and music publishers, had filed an application under Section 9 of the Insolvency and Bankruptcy Code (IBC) 2016, as an operational creditor claiming dues towards royalty payable for utilisation of “literary and musical works”.

“A Petition has been filed against the Company under Section 9 of the IBC by the IPRS, an Operational Creditor, before the NCLT, Mumbai Bench for initiation of Corporate Insolvency Resolution Process against the company, claiming a debt and default of ₹211.41 crore towards royalty payable for utilization of ‘literary and musical works’,” ZEEL said.

However, ZEEL added that the claim is not in “consonance with the interpretation of the law” on the point of payment of royalties for “literary and musical works” by the Delhi High Court, and hence, the “claimed amount is not due or payable to IPRS”.

IPRS authorises the use of copyrighted music by users by issuing them licenses and collecting royalties on behalf of IPRS members — authors, composers, and publishers of music. Royalty is distributed amongst members after deducting IPRS’s administrative costs.

Last month, IDBI Bank moved the National Company Law Tribunal (NCLT) against ZEEL seeking to initiate insolvency proceedings against the media firm to recover dues. IDBI Bank has claimed dues of ₹149.60 crore, which has been disputed by ZEEL, as per a regulatory update from the media firm.

ZEEL had earlier announced a merger with rival Culver Max Entertainment (earlier Sony Pictures Network India) in December 2021. The merger has been approved by the Competition Commission of India (CCI) with certain conditions along with other bodies such as NSE and BSE. Its shareholders and creditors have already approved the merger. PTI

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