The national company law appellate tribunal (NCLAT) in New Delhi has affirmed a lower court's decision declining to initiate insolvency proceedings against Cue Learn Private Limited in a payment row linked to an endorsement arrangement with actor Akshay Kumar Bhatia.
A division bench headed by judicial member justice N Seshasayee, alongside technical member Indevar Pandey, concluded that the matter between the parties fell beyond the purview of the Insolvency and Bankruptcy Code (IBC). The appellate body stressed that corporate insolvency resolution process (CIRP) can only commence when liability and failure to pay are unequivocal and free from contention. According to the bench, the presence of outstanding liability and payment failure—two core prerequisites for launching CIRP—must remain unquestionable.
The conflict originated from an endorsement arrangement executed in March 2021. Per the agreement, Cue Learn promised to remit ₹8.10 crore along with taxes to the actor for brand promotion activities, with work to be completed within a maximum of two days across a two-year duration. The education technology firm paid half the sum at the outset, and the celebrity rendered services for a single day. The balance of ₹4.05 crore remained outstanding even after billing documents and a legal demand notice were sent.
The actor's position was that the second payment became due by April 2022 as an independent contractual commitment, without regard to whether the additional day of work was actually performed. Cue Learn refuted this claim, arguing that remuneration was tied to actual service provision and coordinated timing, neither of which occurred. According to the company, the matter was essentially contractual and could only support a claim for compensation.
NCLAT held that insolvency forums cannot substitute for civil courts when adjudicating such contractual disagreements. The bench noted that when unclear provisions in crucial contract clauses prevent the adjudicating body from ascertaining the true intentions of contracting entities, the authority must simply recognise these uncertainties without attempting to clarify them to discover the intended meaning behind contractual language.
The tribunal additionally pointed out that while contractual violations may create claims, such claims do not automatically constitute debts warranting CIRP initiation. Concluding that Cue Learn had established a reasonable ongoing dispute, the tribunal sustained NCLT Mumbai's January 2025 ruling and rejected the appeal without cost implications.
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