NCLT Mumbai Dismisses Insolvency Plea Against Eros Over 'English Vinglish,' 'Ki And Ka' Profit-Sharing Dispute

The National Company Law Tribunal (NCLT) at Mumbai on Tuesday dismissed an insolvency application filed by Gutz Feel Film Production LLP against Eros International Media Ltd over an alleged default of Rs. 3.33 crore arising from profit-sharing agreements for the films “English Vinglish” and “Ki and Ka”.

Holding that the claim arose from a profit-sharing arrangement, which does not qualify as an operational debt under the Insolvency and Bankruptcy Code, a bench of Judicial Member Ashish Kalia and Technical Member Sanjiv Dutt observed:

“Thus, the profit from the revenue-sharing arrangement cannot be equated with an operational debt, and the agreement is essentially in the nature of a joint venture can not be construed as service or goods supplied to the Respondent by any stretch of imagination. At best, it can be termed as recoverable amount, which can be agitated before the Civil Court leading document and evidence etc .”

The case arose from agreements dated May 5, 2012 for the movie “English Vinglish” and February 3, 2016 for the movie “Ki and Ka”, under which the parties agreed to share profits from exploitation of cinematographic rights. Gutz Feel Films claimed dues of Rs. 2.10 crore (English Vinglish) and Rs. 1.22 crore (Ki and Ka), relying on an email dated February 15, 2023 acknowledging the amounts, with payment allegedly due by May 15, 2023.

Eros International opposed the petition, arguing that the agreements reflected a commercial collaboration and co-production arrangement and that the petitioner was effectively a co-investor rather than a service provider.

The tribunal held that the petitioner's claim was based on a share of profits and not on any invoice for goods or services. It held that such claims fall outside the scope of operational debt under Section 5(12) of the Code.

While rejecting the limitation objection in view of acknowledgment of liability by the debtor on June 13, 2023, the tribunal concluded that the petition was not maintainable.

It said, “However, it is noted that the Respondent acknowledged the dues of the Petitioner vide email dated 13th June, 2023. The present Petition was filed 05.09.2025, which is within the time prescribed. It is also not the case of the Respondent that payments were made from all sources in 2016 or 2017. Moreover, the exact dates of receipt of revenue have not been disclosed. In view of these facts, this point is decided in favour of the Petitioner, and the objection of the Respondent is brushed aside..”

Accordingly, the tribunal dismissed the petition, observing “In view of the above, the present Petition fails on merit, as it has not established that the dues claimed qualify as operational debt to be dealt with under Section 9 of the IBC. Accordingly, the Petition is dismissed.”