Akshay Kumar Bhatia Vs Cue Learn Private Limited (NCLT Delhi)
The case involves an application by Akshay Kumar Bhatia under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against Cue Learn Private Limited. The dispute arose from an endorsement agreement where Bhatia, as an actor, was engaged to provide promotional services for Cue Learn. While the first payment of ₹4.05 crores was made, the company failed to pay the second tranche of an equal amount by the agreed deadline. The applicant argued that this failure constituted a default on an operational debt, as defined under the IBC. The respondent countered that the second payment was contingent on mutually agreed dates for the second day of service, which were never finalized. It claimed the matter was contractual and outside the scope of insolvency proceedings.
The National Company Law Tribunal (NCLT) examined the agreement and found that Bhatia’s obligations were conditional upon Cue Learn fulfilling specific payment terms. Additionally, the tribunal concluded that the unpaid amount related to damages from a contractual breach rather than an operational debt. The IBC only covers claims involving operational or financial debts, and disputes involving damages must be adjudicated by civil courts. Thus, the tribunal dismissed the application, holding that the matter did not fall under its jurisdiction for insolvency resolution.
