The National Company Law Appellate Tribunal (NCLAT) has upheld the decision of the National Company Law Tribunal (NCLT) rejecting an insolvency application filed by actor Akshay Kumar Bhatia against ed-tech firm Cue Learn Private Limited, holding that the matter involved a contractual dispute rather than a case of insolvency under the Insolvency and Bankruptcy Code, 2016 (IBC).
The appellate bench observed that insolvency proceedings cannot be used as a recovery mechanism where the existence of debt itself is contested. It agreed with the NCLT’s view that the dispute required adjudication by a civil court and did not meet the threshold for initiating a corporate insolvency resolution process.
The disagreement stemmed from a brand endorsement agreement executed in March 2021, under which Cue Learn had engaged Bhatia to promote its educational services. The contract provided for a total consideration of ₹8.10 crore plus taxes, payable in two equal instalments. While the first instalment was paid, the second instalment was allegedly withheld.
Bhatia claimed that the balance amount became payable regardless of whether Cue Learn opted to utilise the second day of promotional services. He raised an invoice and subsequently issued a demand notice under the IBC, alleging default on the part of the company.
Cue Learn, however, disputed the claim, asserting that the second payment was conditional upon performance of the remaining contractual obligations, which never materialised. According to the company, the non-payment arose from non-performance and unresolved contractual terms, giving rise to a genuine dispute.
Accepting Cue Learn’s position, the NCLAT noted that the IBC is designed to address cases of clear financial default and not disputes involving interpretation or enforcement of contracts. Since the liability itself was under question, the tribunal held that insolvency proceedings were not maintainable.
As a result, the appellate tribunal dismissed the appeal and affirmed the NCLT’s order, clarifying that any remedy available to the appellant must be pursued through appropriate civil proceedings rather than under the insolvency framework.
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