NCLT Delhi Holds IBC Not A Recovery Mechanism, Dismisses Aidem Ventures' CIRP Petition Against NEWS24

The Principal Bench of the National Company Law Tribunal (NCLT) at Delhi, on 13 February, dismissed three petitions seeking the initiation of the Corporate Insolvency Resolution Process (CIRP) filed by Aidem Ventures against NEWS24 Broadcast India Limited, holding that the claims involved pre-existing contractual disputes and were primarily aimed at recovery of dues, not resolution of the corporate debtor.

A Bench comprising President Ramalingam Sudhakar and Technical Member Ravindra Chaturvedi observed that under Sections 8 and 9 of the Insolvency and Bankruptcy Code (IBC), the Adjudicating Authority cannot adjudicate contractual disputes at the CIRP initiation stage. It held:

“...since the email exchange relates to performance of the obligation under the contract, it is needless to state that venturing into a contractual dispute falls outside the purview of the code.”

Aidem Ventures had entered into an agreement with NEWS24 Broadcast India Limited in April 2010 for selling available advertising options. The agreement entitled Aidem to commissions ranging from 12% to 25%, depending on sales.

Between May 2010 and April 2011, Aidem collected and remitted over Rs. 20.81 crore, but claimed that Rs. 43.71 lakh in commissions remained unpaid. Two other smaller claims of Rs. 8.69 lakh and Rs. 23.08 lakh were also raised.

In 2013, statutory notices under the Companies Act were issued, leading to winding-up petitions before the Delhi High Court, which were later transferred to the NCLT after the IBC came into force.

Aidem Ventures contended that, under Clause 6.7 of the agreement, commissions were payable within seven days of collections made and remitted, establishing a clear default.

NEWS24, on the other hand, relied on clauses requiring Aidem to manage collections and indemnify against losses. They highlighted instances of dishonoured cheques and disputes with advertisers such as Bharti Airtel, arguing that the matter involved contractual breaches and counterclaims, amounting to a pre‑existing dispute.

They further submitted that the amounts claimed were below the statutory threshold of Rs. 1 crore under Section 4 of the IBC, emphasising that the IBC was not intended as a recovery mechanism.

The Bench examined the statutory framework under Sections 8 and 9 of the IBC and applied the Supreme Court's test in Mobilox Innovations v. Kirusa Software. It noted:

“At the stage of the consideration of the Section 9 application, the AA is to prima facie form an opinion as to the pre-existence of a dispute and if it appears from the conduct of the parties that there exists a dispute, that forms the basis of the dismissal of the petition. Further, the AA cannot adjudicate the contractual dispute and reconcile the account between the parties.”

The Bench further observed:

“Further, it is to be noted that this is not a recovery proceeding and the IBC is only meant for the resolution of the corporate debtor. In the present scenario, it is amply clear that the present petition has been filed for the recovery of the dues rather than the resolution of the CD.”

Accordingly, the NCLT held that the Adjudicating Authority cannot venture into contractual and pre-existing disputes between the parties and dismissed all petitions.

For Appellants: Advocates Deepak Joshi and Rudra Pradap

For Respondents: Senior Advocate P Nagesh, Sachin Anand Shukla, Alok Singh and Aman Chaurasia