Siti Networks Ltd: NCLAT Upholds Insolvency Proceedings, Stay on Operational Creditor Payments

Siti Networks Ltd, a leading media company, is facing insolvency proceedings as per the National Company Law Tribunal (NCLT) Mumbai Bench's order dated 22 February 2023. The NCLAT has upheld the admission order, reinstating the Corporate Insolvency Resolution Process (CIRP) with Mr. Rohit Mehra as the IRP. The powers of the Board of Directors are currently suspended. The NCLT's 1 October Order has fixed the insolvency commencement date at 22 February 2023, and held that moratorium under Section 14 of the Code was applicable during the Stay Period. The transactions and appropriation during the Stay Period shall be reversed to the accounts of the Corporate Debtor. The expenses incurred in the ordinary course of business to keep the Company as a going concern are to be protected. Certain lenders of the Company had filed appeals against the 1 October Order before the Hon’ble NCLAT, and the RP has filed a limited appeal. The Hon’ble NCLAT has directed the lenders to keep the amounts appropriated by them during the Stay Period in a separate interest-bearing account during the pendency of the appeals. The Hon’ble NCLAT has dismissed all appeals on 31 July 2025, directing the financial creditors to remit the amount back to the corporate debtor along with accrued interest. Certain financial creditors have preferred appeals before the Hon’ble Supreme Court against the judgment of the Hon’ble NCLAT dated 31st July 2025. There is currently a stay granted by the Hon’ble Supreme Court to the financial creditors from remitting the amounts received by them during the stay period of the CIRP, and also a direction that no payments shall be made to operational creditors for liabilities relating to the stay period of the CIRP.