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Informist, Wednesday, Jun. 17, 2026

 

NEW DELHI – The Mumbai bench of the National Company Law Tribunal has dismissed Phantom Studios India Pvt. Ltd.'s insolvency plea against Eros International Media Ltd. for alleged dues of INR 14.83 million. In this case, the dues claimed by Phantom Studios do not constitute operational debt within the meaning of the Insolvency and Bankruptcy Code, 2016, the tribunal said.

 

It noted that the agreement between the parties was signed with the common commercial objective of producing the film 'NH-10', and they exercised effective joint control on factors such as production cost, production period, and release date, which were to be mutually decided by both parties. Phantom Studios and Eros had defined the scope of work and were to contribute in the ratio of 50:50 towards lead artist Anushka Sharma's fee of INR 12.50 million, the tribunal said. 

 

Moreover, it was also agreed between the parties that after complete recoupment of production costs, the net profits would be shared between the parties in the ratio of 50:50 and intellectual property rights of the films were also to be equally shared by both parties, said the tribunal. These features are indicative of a joint venture arrangement between the parties, it said.

 

As the nature of relationship between the parties is that of a joint venture, the debt, even if owed by Eros to Phantom Studios, couldn't be considered 'operational debt' under the 2016 Code, said the tribunal. Through the insolvency petition, Phantom Studios is seeking recovery of the amount in default and the Insolvency and Bankruptcy Code cannot be used as a lever to coerce payment, it said. Even if money is owed by one party to another, the nature of the relationship between the parties, based on the contract between them, plays a significant role in determining whether a debt can be considered operational debt, said the tribunal.

 

The case has its genesis in a term sheet wherein the parties agreed to co-produce four full-length cinematography films. Consequently, Eros entered into a film co-production agreement with Phantom Films for the co-production of the cinematography film in Hindi titled 'NH-10'. Under this agreement, Eros was to market and distribute the film and the revenues from it were to be divided between the parties. 

 

In 2024, Phantom Films issued a letter to Eros, stating that the amount payable by the latter for the revenues generated from marketing and distribution of the film. Seeking payment of its dues from Eros under the agreement, Phantom Films moved the tribunal.  End

 

Reported by Surya Tripathi

Edited by Avishek Dutta

 

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