The National Company Law Tribunal’s (NCLT) Delhi bench has dismissed Bollywood actor Akshay Kumar’s plea to initiate insolvency proceedings against ed-tech company Cue Learn Pvt. Ltd.
Kumar had filed a plea against the edtech under Section 9 of the Insolvency and Bankruptcy Code (IBC) over the non-payment of ₹4.83 crore as part of a 2021 endorsement agreement, terming the dues operational debt.
However, the tribunal, in its judgment delivered on 7 January, held that Kumar’s claims did not qualify as operational debt under the IBC. “We conclude that the application filed by the applicant/operational creditor (Akshay Kumar) under Section 9 of the Code for initiating CIRP (corporate insolvency resolution process) against the respondent is not maintainable and stands dismissed,” the tribunal said.
Operational debt, under the bankruptcy code, refers to money a company owes for goods or services it has received. It includes unpaid bills for supplies, rent, or salaries. If a company fails to pay this debt, creditors can seek to initiate insolvency proceedings.
The dispute arose from a March 2021 endorsement agreement, wherein Kumar was engaged to provide promotional services for ₹8.10 crore, to be paid in two tranches. While the first payment of ₹4.05 crore was made, Cue Learn allegedly defaulted on the second payment due by 15 April 2022.
Kumar had rendered services under the agreement, including an endorsement day on 8 March 2021, with deliverables such as TV commercials (TVCs) used by Cue Learn on its social media platforms.
He argued that the second payment was unconditional and constituted operational debt.
In response, Cue Learn argued that the second payment was conditional upon Kumar’s availability for a mutually agreed-upon second endorsement day, which Kumar failed to propose. The company contended this constituted a breach of contract by the actor, invalidating his claim.
The tribunal sided with Cue Learn, noting that Kumar’s obligation to perform on the second endorsement day depended on prior fulfilment of certain conditions.
The NCLT observed that any claims arising from an alleged breach of contract would be considered liquidated damages, not operational debt under the IBC.
“There is no documentary evidence on record to indicate that these conditions were fulfilled. Consequently, the obligation to render services on the second day did not materialize as the necessary preconditions were not met. The lack of performance on the part of the operational creditor to provide the required services negates the assertion of an operational debt,” the NCLT stated.
The tribunal further noted that disputes over contract breaches fall under civil courts’ jurisdiction and do not qualify as crystallized debts that can trigger insolvency proceedings.
In December 2024, Jackie Shroff also filed a petition asserting his rights as a minority shareholder in Atlas Equinfin Pvt. Ltd.
Source: Mint