NCLT Delhi Rejects Jiostar's Insolvency Plea Against Legends League Cricket Promoter

The Delhi bench of the National Company Law Tribunal (NCLT) has recently dismissed an insolvency plea filed by Jiostar India Pvt. Ltd. against Absolute Legends Sports Pvt. Ltd., the company behind the Legends League Cricket Masters T20 tournament.

The tribunal held that Jiostar failed to establish that its claim for unpaid commentary-production charges and reimbursement of Ministry of Information and Broadcasting (MIB) fees under agreements relating to the broadcast rights of the Legends League Cricket tournament qualified as an operational debt.

A bench of Judicial Member Manni Sankariah Shanmuga Sundaram and Technical Member Atul Chaturvedi observed:

“At the outset, it is observed that the agreements placed on record, forming the very foundation of the alleged debt and default, suffer from material deficiencies. The said agreements are not duly executed between the parties, and the 'Execution Date', as contemplated therein, remains undefined.”

Jiostar, formerly known as Star India Pvt. Ltd., sought initiation of the Corporate Insolvency Resolution Process (CIRP) against Absolute Legends Sports for an alleged default of ₹3.59 crore. The claim arose from media rights arrangements relating to the 2023–2025 franchise editions and the 2025 regional edition of the Legends League Cricket Masters T20 tournament.

According to Jiostar, the parties entered into a Media Rights Agreement dated September 16, 2024 and an Airtime Sale Agreement dated September 18, 2024. Under the arrangements, Absolute Legends granted Jiostar exclusive television, digital and ancillary rights in respect of the league. Jiostar, in turn, agreed to provide free commercial airtime during live transmissions of the tournament.

Jiostar claimed that it raised invoices of ₹53.10 lakh towards unilateral commentary for the 2023 edition and ₹1.17 crore towards unilateral commentary for the 2024 edition. It also raised an invoice of ₹1.88 crore towards reimbursement of Ministry of Information and Broadcasting (MIB) fees. Jiostar contended that Absolute Legends repeatedly acknowledged the dues and sought time to make payment. However, it failed to clear the outstanding amounts despite a statutory demand notice.

Examining the agreements relied upon by Jiostar, the Tribunal found ambiguity regarding their execution. It noted that the Media Rights Agreement bore a stamp dated September 16, 2024 but did not clearly specify the execution date contemplated under the agreement. While the document contained the signatures of Absolute Legends Sports, it had not been executed by Jiostar.

The Tribunal also found similar deficiencies in the Airtime Sale Agreement. It noted that no specific date of execution had been indicated and that the agreement remained unsigned by one of the parties.

On the effect of these deficiencies, the bench observed,

“In the present case, the ambiguity surrounding the execution, coupled with the absence of proper signatures and clarity as to when the agreements came into force, raises serious doubts as to whether these documents were contemporaneously executed or subsequently created to retrospectively characterise past transactions as “services” so as to bring them within the ambit of operational debt.”

Referring to the timing of the transactions, the Tribunal noted that the agreements related to media rights for the 2023–2025 franchise editions and the 2025 regional edition of the tournament.

It further noted that the Media Rights Agreement bore a stamp dated September 16, 2024 and that the Airtime Sale Agreement was dated September 18, 2024. Invoices for ₹53.10 lakh towards unilateral commentary for the 2023 edition, ₹1.17 crore towards unilateral commentary for the 2024 edition and ₹1.88 crore towards reimbursement of MIB fees were raised shortly thereafter.

Expressing concern over the circumstances surrounding the claim, the bench observed,

“In this backdrop, the manner and timing of the transactions, coupled with repeated acknowledgments and the timelines therein, prima facie give rise to concerns regarding the genuineness of the claim and create an impression that the proceedings may have been initiated with a view to precipitate insolvency against the Corporate Debtor.”

Holding that the Insolvency and Bankruptcy Code is not intended to function as a recovery mechanism, the Tribunal ruled that it was not satisfied that the claim qualified as an operational debt. It held that the essential requirement for initiation of CIRP remained unfulfilled.

Accordingly, the Tribunal held the application to be not maintainable. It clarified, however, that Jiostar would remain free to pursue remedies available under other applicable laws. This included approaching civil courts or any other appropriate forum.