NCLT Mumbai Dismisses Section 9 Plea Against Eros International; Profit-Sharing Claim Not ‘Operational Debt’

April 8, 2026 : The Mumbai Bench-II of the National Company Law Tribunal (NCLT) has dismissed a Section 9 insolvency application filed by Gutz Feel Film Production LLP against Eros International Media Limited, holding that claims arising from profit-sharing arrangements do not qualify as “operational debt” under the Insolvency and Bankruptcy Code, 2016 (IBC).

The Bench comprising Judicial Member Ashish Kalia and Technical Member Sanjiv Dutt ruled that the underlying agreements between the parties were in the nature of a joint venture involving revenue sharing from cinematographic works, and not transactions involving supply of goods or services.

The Operational Creditor had approached the Tribunal seeking initiation of Corporate Insolvency Resolution Process (CIRP) for an alleged default of ₹3.33 crore, claiming unpaid dues arising from agreements related to the films “English Vinglish” and “Ki and Ka.” The default date was stated as 15 May 2023.

The dispute stemmed from two agreements: a Film Rights Acquisition Agreement dated 5 May 2012 for “English Vinglish,” and a Co-Production Agreement dated 3 February 2016 for “Ki and Ka.” Under these arrangements, the Corporate Debtor had agreed to pay a minimum guarantee and thereafter share profits in a 50:50 ratio upon recoupment of specified costs.

The Operational Creditor relied on a February 2023 email in which Eros International allegedly acknowledged dues aggregating over ₹3.33 crore and indicated that payment would be made within three months. Upon non-payment, a demand notice under Section 8 of the IBC was issued in July 2023.

However, the Corporate Debtor contested the maintainability of the petition, arguing that the agreements represented a commercial collaboration and revenue-sharing model. It contended that the applicant was effectively a co-investor or partner, and not a provider of goods or services. It further alleged that the insolvency process was being misused as a recovery mechanism.

Framing the core issue as whether the claimed dues constituted “operational debt,” the Tribunal examined the contractual framework and noted that the applicant had not raised any invoices for goods or services. Instead, the claim was limited to a share in profits generated from exploitation of film rights.

Rejecting the Operational Creditor’s reliance on precedents involving licensing arrangements, the Tribunal distinguished the facts and held that the present case involved a pure revenue-sharing model. It observed that such arrangements cannot be equated with operational transactions under the IBC.

The Bench categorically held that “profit from a revenue-sharing arrangement cannot be equated with an operational debt,” and that the agreements were in the nature of a joint venture, which could not be construed as supply of goods or services.

On the issue of limitation, the Tribunal ruled in favour of the Operational Creditor, noting that the Corporate Debtor had acknowledged the dues in June 2023 and that the petition was filed within the prescribed period. It also observed that the exact timeline of revenue realization had not been disclosed, weakening the limitation objection.

Despite this, the Tribunal concluded that the essential requirement under Section 5(12) of the IBC was not satisfied. It held that the claim, at best, represented a recoverable amount arising from contractual profit-sharing, which could be pursued before a civil court but not through insolvency proceedings.

Accordingly, the petition was dismissed.

Case Details:
Case: Gutz Feel Film Production LLP v. Eros International Media Limited
Case No: CP (IB) No. 670/MB/2024
Order Date: 08.04.2026