Salman Khan settles ₹7.24cr dispute with manufacturer; withdraws insolvency plea
What's the story
Bollywood actor Salman Khan has withdrawn his insolvency petition against equipment manufacturer Jerai Fitness Pvt Ltd. The withdrawal comes after the two parties reached a settlement over a ₹7.24 crore payment dispute related to Khan's fitness equipment brand, Being Strong. The agreement was confirmed before the National Company Law Appellate Tribunal (NCLAT) on Wednesday, with Justice Ashok Bhushan presiding over the matter.
Legal battle
What was the dispute all about?
The dispute originated from a trade license agreement between Khan's Being Strong and Jerai Fitness in October 2018. The agreement allowed Jerai to use the "Being Strong" trademark on its manufactured products. However, due to business disruptions and the COVID-19 pandemic, Khan revised the royalty payable to him until March 31, 2023, at Jerai's request. After Jerai allegedly failed to make payments, Khan sent a demand notice on September 14, 2024.
Counterclaim
Jerai Fitness's counter-argument
Jerai Fitness countered Khan's claim, arguing that there was a pre-existing dispute between the two parties. The company claimed to have invested heavily in developing components for new products like the "X-tend" series and "Proton series." Apparently, there were a lot of hiccups from Being Strong's end. In May, the Mumbai bench of NCLAT dismissed Khan's insolvency plea against Jerai Fitness. The tribunal held that Jerai had the right to manufacture and sell products under the "Being Strong" trademark.
Tribunal's observation
NCLAT's verdict in May
NCLAT observed that Jerai Fitness was permitted to "manufacture, market, distribute, sell" products under the "Being Strong" trademark and create promotional material using it. However, the tribunal noted that all major decisions regarding product manufacture, promotion, marketing, and distribution had to be pre-approved by Khan or his authorized representative, Alvira Agnihotri. The tribunal then said the claim was disputed in nature and was "in domain of recovery proceedings." Khan later challenged this dismissal.