NCLT Delhi Rejects Aidem Ventures’ Insolvency Plea Against NEWS24, Says IBC Cannot Be Invoked to Enforce Disputed Contractual Dues

NCLT Delhi Rejects Aidem Ventures’ Insolvency Plea Against NEWS24, Says IBC Cannot Be Invoked to Enforce Disputed Contractual Dues

Introduction

The National Company Law Tribunal (Principal Bench, Delhi) has dismissed petitions filed by Aidem Ventures Private Limited seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against NEWS24 Broadcast India Limited, holding that the Insolvency and Bankruptcy Code cannot be used as a mechanism for recovery of contractual dues.

A Bench comprising President Ramalingam Sudhakar and Technical Member Ravindra Chaturvedi observed that the dispute between the parties involved pre-existing contractual disagreements and therefore fell outside the scope of proceedings under the Insolvency and Bankruptcy Code, 2016.

Factual Background

The dispute arose from an agreement entered into in April 2010 between Aidem Ventures and NEWS24 Broadcast India Limited for marketing and selling advertising inventory available with the broadcaster.

Under the agreement, Aidem Ventures was entitled to commissions ranging between 12% and 25% depending on the volume of advertising sales secured. Between May 2010 and April 2011, Aidem collected advertising payments from clients and remitted more than ₹20.81 crore to NEWS24. Aidem alleged that commissions amounting to ₹43.71 lakh remained unpaid. It also raised two additional claims of ₹8.69 lakh and ₹23.08 lakh arising from related transactions under the agreement.

Procedural Background

In 2013, Aidem Ventures issued statutory notices under the Companies Act seeking payment of the alleged dues and subsequently initiated winding-up petitions before the Delhi High Court.

After the coming into force of the Insolvency and Bankruptcy Code, these proceedings were transferred to the NCLT. Aidem then pursued the matter through petitions seeking commencement of CIRP against NEWS24.

Issue

1. Whether the petitions filed by Aidem Ventures disclosed a valid operational debt and default under Sections 8 and 9 of the Insolvency and Bankruptcy Code

2. Whether the claims were barred due to the existence of pre-existing contractual disputes between the parties.

3. Whether the insolvency process was being invoked merely as a mechanism for recovery of contractual dues

Contentions of the Parties

Aidem Ventures argued that under Clause 6.7 of the agreement, commissions were payable within seven days of the collections made and remitted to NEWS24. According to the petitioner, the failure of the broadcaster to release the commissions despite receipt of payments constituted a clear default under the contract.

NEWS24 opposed the petitions and contended that the dispute was not about non-payment but about contractual performance and reconciliation of accounts. The broadcaster relied on contractual clauses requiring Aidem to manage advertiser collections and indemnify the company against losses

NEWS24 further pointed to instances of dishonoured cheques and disputes with advertisers, including Bharti Airtel, to demonstrate that the matter involved contractual breaches and counterclaims. It also argued that the amounts claimed were below the statutory threshold of ₹1 crore prescribed under Section 4 of the IBC and that the insolvency framework could not be invoked merely to recover disputed dues.

Reasoning and Analysis

The Tribunal examined the statutory framework governing operational creditor petitions under Sections 8 and 9 of the Insolvency and Bankruptcy Code and applied the principles laid down by the Supreme Court in Mobilox Innovations Pvt Ltd v Kirusa Software Pvt Ltd. The Bench reiterated that at the stage of admission of a Section 9 petition, the adjudicating authority is required only to determine whether a genuine pre-existing dispute exists between the parties. If such a dispute is established, the petition must be rejected.

After reviewing the communications and email exchanges between the parties, the Tribunal found that the disagreements between Aidem and NEWS24 related to performance of contractual obligations, reconciliation of accounts and disputes arising from advertising collections. The Tribunal emphasised that adjudicating such disputes would require examination of contractual terms and factual controversies, which fall outside the limited scope of proceedings under the IBC. It further observed that the insolvency mechanism is intended for resolution of financially distressed companies and not for recovery of disputed contractual claims.

Decision

The NCLT Delhi held that the claims raised by Aidem Ventures involved pre-existing contractual disputes and that the insolvency petitions had been filed primarily to recover alleged dues rather than to resolve the financial distress of the corporate debtor. Accordingly, the Tribunal dismissed all three petitions seeking initiation of CIRP against NEWS24 Broadcast India Limited.

In this case the appellant was represented by Advocates Deepak Joshi and Rudra Pradap.