The National Company Law Appellate Tribunal (NCLAT) has set aside a National Company Law Tribunal (NCLT) order directing the BSE and the NSE to reconsider their approvals for the proposed Zee-Sony merger and give revised no-objection certificates before the next hearing.

In an oral order that comes as a big relief to Zee Entertainment Enterprises Ltd (ZEEL), a two-member bench comprising Justice Rakesh Kumar and technical member Alok Srivastava of the appellate tribunal on Friday asked the NCLT to hear the parties and decide accordingly. The tribunal will hear the matter on June 16.

The NCLAT order came on hearing the appeal filed by ZEEL against the order passed by the Mumbai bench of the NCLT on May 11, 2023. The NCLT had directed the NSE and the BSE to reconsider their prior approvals for the merger of ZEEL and Culver Max Entertainment. It had also asked the bourses to reassess the non-compete fee under the clause of the merger. Under the merger terms, Sony will pay a non-compete fee of Rs 1,100 crore to the Essel group promoters.

“Without going into the merits of the case, we are of the opinion that the impugned order is required to be set aside primarily on the ground of non-compliance of the principle of natural justice. Accordingly, the impugned order is set aside and the matter is remitted to the NCLT to examine the same and pass appropriate order after hearing both the parties without being influenced by this order. It is clarified that we have not recorded any opinion on the merits of the case,’’ the NCLAT said in its order.

Senior counsel for Zee, Mukul Rohatgi, said that while the merger process is going on, during the course of the hearing, an order given by Securities and Exchange Board of India (Sebi) on April 25, 2023 with regard to Shirpur Gold Refinery, an Essel group firm, was placed by the bourses before the tribunal. He contended that a copy of the order was not even supplied to the company and the NCLT on the strength of the order, passed its judgment on May 11.

Rohatgi argued that it was required on the part of the NCLT to grant an opportunity to the media firm to give its response. He also maintained that the tribunal has no jurisdiction on matters like non-compete fees.

Umder the scheme of arrangement, Sony will indirectly hold a 50.86 per cent of the combined company. The founder of Zee will own around 4 per cent and the rest will be with the other shareholders of ZEEL.

During the NCLT hearing, counsel for the bourses informed the tribunal they have been asked by the market regulator to submit its April 25 order on SGRL before the court. Sebi had issued interim order-cum-show-cause notices against SGRL, its erstwhile chairman Amit Goenka, promoter Jayneer and others .