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Informist, Wednesday, Aug. 19, 2026

 

--NCLT admits Pen India's IBC plea against Reliance Entertainment Studios 

 

By Surya Tripathi

 

NEW DELHI – The Mumbai bench of the National Company Law Tribunal Wednesday admitted a petition by Pen India Pvt. Ltd. to admit insolvency proceedings against Reliance Entertainment Studios Pvt. Ltd. for unpaid dues of INR 119.40 million. The tribunal appointed Umesh Balaram Sonkar as the interim resolution professional to carry out the functions as per the Insolvency and Bankruptcy Code, 2016.

 

The tribunal said it was satisfied that the amount advanced by Pen India under the security deposit agreement constitutes a financial debt within the meaning of the Insolvency and Bankruptcy Code. The tribunal said Reliance Entertainment's argument that Pen India is an unlicensed money lender and the present proceedings are barred under the Maharashtra MoneyLending (Regulation) Act, 2014 is without merit. The contractual provisions relied upon by Reliance Entertainment do not extinguish its repayment obligations, it said.

 

Unlike proceedings under Section 9 of the 2016 Code relating to operational creditors, the existence of a dispute is not in itself a ground to reject an insolvency application under Section 7, relating to financial creditors, the tribunal said. The adjudicating authority is required to satisfy itself about the existence of a financial debt and the occurrence of default on the basis of the material placed before it. Both requirements stand duly established notwithstanding the disputed status reflected in the information utility accessed by financial institutions and the tribunals, it said.

 

In 2022, Pen India had provided financial assistance to Reliance Entertainment by way of security deposit for the release of a film titled "Auron Mein Kaha Dum Tha". However, Reliance Entertainment failed to repay the deposit, after which Pen India moved the tribunal to start insolvency proceedings against the company.

 

Reliance Entertainment argued that Pen India's insolvency petition is not maintainable because there exists no legally recoverable financial debt within the meaning of Section 5(8) of the 2016 Code. It is pertinent to note that the transaction in question is not a moneylending or borrowing transaction, it said. 

 

Reliance Entertainment is one of India's largest and most reputed content studio companies, having produced and distributed over 400 films which have collectively grossed in excess of $1 billion at the global box office, it said. Reliance Entertainment has also actively invested in film production companies and intellectual properties, maintaining a robust and diversified content portfolio across multiple Indian languages, it said. The company further enjoys longstanding relationships for digital distribution with leading platforms such as Netflix, Amazon, Disney+ Hotstar, and Jio Studios, it added.

 

Since 2008, Reliance Entertainment has collaborated with some of the more eminent directors and leading stars of the Indian film industry and produced or been associated with numerous acclaimed films such as "Double Dhamaal", "Sooryavanshi", "Paa", "83", "Singham", "Simmba", "Rustom", "Queen", "Vikram Vedha", "Amar Singh Chamkila", and "Singham Again" as well as various web shows and series featuring top creative talents in the industry, the company said. In view of all this, it argued, by no stretch of imagination can the company be characterised as an insolvent entity or one that is financially incapable of meeting its obligations.  End

 

Edited by Rajeev Pai

 

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