Actor Salman Khan has withdrawn his insolvency appeal against gym equipment manufacturer Jerai Fitness Limited before the National Company Law Appellate Tribunal (NCLAT), following a settlement between the parties. [Salman Khan v. Jerai Fitness]
On October 6, Khan’s counsel informed the Appellate Tribunal that consent terms had been executed. The coram of Chairperson Justice Ashok Bhushan and Technical Member Arun Baroka granted time for filing the affidavit and posted the matter for October 8.
Today, the parties placed the consent terms on record, following which the matter stood withdrawn.
Khan, through his fitness brand Being Strong, had entered into a trademark licence arrangement with Jerai Fitness. Beginning with a 2018 agreement and followed by amendments in 2019 and a fresh contract in August 2023, the arrangement allowed Jerai to manufacture, market and sell gym equipment under Khan’s trademark.
Under the 2023 agreement, Jerai was obligated to pay either a minimum guarantee of ₹3 crore annually or 3% of net sales, whichever was higher. Khan alleged that Jerai defaulted on invoices amounting to ₹7.24 crore, including a one-time settlement payment of ₹1.63 crore for the pre-March 2023 period and royalties for subsequent years. He approached the NCLT Mumbai Bench, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against Jerai Fitness.
Jerai disputed the claims, arguing that Khan had failed to discharge his own obligations under the agreement. The company contended that Khan did not provide timely approvals for product designs and promotional material, nor did he attend the launch of its “Proton” series at the Bombay Exhibition Centre in November 2023. WhatsApp messages and emails placed on record allegedly showed repeated requests for approvals and branding support.
Jerai maintained that the invoices relied on by Khan were raised only after the company had issued a termination notice in September 2024, effective April 2025, and therefore could not form the basis of an insolvency claim.
On May 30 this year, the NCLT dismissed Khan’s Section 9 petition. The Tribunal held that while the ₹1.63 crore settlement amount for the earlier period was an undisputed liability, the larger royalty claim was subject to a genuine pre-existing dispute regarding Khan’s performance under the agreement. It held,
"The right to receive payment under the said agreement in relation to minimum guarantee accrues only when the user is enabled to use such trademark in the form and manner contemplated.”
It concluded that the petition fell in the “domain of recovery proceedings” rather than resolution under the Insolvency and Bankruptcy Code (IBC).
Khan challenged this dismissal before the NCLAT.
He was represented by Advocates Varun Kalra, Parag Khandhar, Tapan Radkar and Shaham Ulla from DSK Legal.
Jerai Fitness was represented by Advocates Himanshu Satija, Prerna Wagh, Prangana Baraua, Pranav Saigal, Harshit Khanduja, Harsh Saxena and Anshul Rao.