Salman Khan settles dispute with Jerai Fitness, withdraws insolvency plea at NCLAT

Bollywood actor Salman Khan on Wednesday withdrew an insolvency appeal filed before the appellate tribunal NCLAT against Jerai Fitness, after settling over Rs 7.24 crore dispute.

Counsel appearing for Salman Khan submitted before the NCLAT that the demand draft, as per the consent terms executed, has been handed over to them and requested permission to withdraw the appeal.

A two-member bench comprising Chairperson Justice Ashok Bhushan and Member (Technical) Arun Baroka took the consent Terms signed between Salman Khan and Jerai Fitness on record and allowed the Bollywood actor to withdraw his appeal.

“Appellant (Salman Khan) is permitted to withdraw the appeal. Appeal is dismissed as withdrawn,” said a one-page order by NCLAT.

The dispute was related to ‘BEING STRONG’, a fitness equipment brand founded by Salman Khan, in collaboration with Jerai Fitness.

Salman Khan had moved to the appellate tribunal NCLAT after the Mumbai bench of NCLT in May this year dismissed his insolvency plea against Jerai Fitness.

Dismissing the plea, NCLT had said the claim was disputed in nature and was “in the domain of recovery proceedings”.

“There exists an undisputed debt amounting to Rs 1,63,76,682 along with GST due from Corporate Debtor and the said amount is in default and the remaining debt claimed in this Petition cannot said to be undisputed debt,” said NCLT in its 22-page order passed on May 30.

Khan, who owns trademark ‘BEING STRONG’ and has the exclusive right to grant a licence and the right to use the same, had entered into a trade licence agreement in October 2018.

Jerai Fitness was granted a licence for the usage of trademark ‘BEING STRONG’ on the products manufactured by it.

Thereafter, due to interruptions in business and the onset of Covid, at the request of the Corporate Debtor, the Bollywood actor agreed to revise the royalty payable to him from the period of commencement of the first agreement till March 31, 2023.

However, according to Khan, after the Corporate Debtor failed to make the payments, he sent a demand notice on September 14, 2024, demanding payment of Rs 7.24 crore along with interest at 24 per cent per annum and later moved NCLT claiming default.

While Jerai Fitness contended that there was a pre-existing dispute between the parties and that it invested significant money towards making necessary components to launch a category of products known as the X-tend series and Proton series.

NCLT observed that Jerai Fitness has the right to “manufacture, market, distribute, sell” the products under the trademark ‘BEING STRONG’ and to create promotional material using the trademark.

However, as per the clauses there had to be prior intimation of all major and substantial decisions with respect to the manufacture, promotion, marketing and distribution of the products to the petitioner and such decisions were to be taken by Alvira Agnihotri or her authorised person on behalf of petitioner.

NCLT observed Jerai Fitness was restricted from distributing any products under the trademark which were not specifically pre-approved.