Salman Khan withdraws insolvency case against Jerai Fitness after ₹7.24 crore settlement
Actor Salman Khan has withdrawn his insolvency appeal against gym equipment manufacturer Jerai Fitness Limited before the National Company Law Appellate Tribunal (NCLAT) after both parties reached a settlement.
Khan had earlier approached the National Company Law Tribunal (NCLT), Mumbai Bench, claiming that Jerai Fitness owed him ₹7.24 crore under a trademark licence agreement related to his fitness brand Being Strong.
On October 6, Khan’s counsel informed the NCLAT that consent terms had been executed between the two sides. The Bench led by Justice Ashok Bhushan (Chairperson) and Technical Member Arun Baroka granted time for filing the affidavit. The settlement terms were later placed on record, and the matter was formally withdrawn on October 8.
Background of the dispute
Khan’s company Being Strong had entered into a licensing arrangement with Jerai Fitness in 2018, allowing the latter to manufacture, market and sell gym equipment under the Being Strong trademark. The arrangement was renewed in 2019, followed by a new agreement in August 2023.
Under the 2023 deal, Jerai Fitness was required to pay Khan a minimum guarantee of ₹3 crore per year or 3% of its net sales, whichever was higher. Khan alleged that Jerai failed to clear dues totalling ₹7.24 crore, which included a one-time settlement payment of ₹1.63 crore for the period before March 2023 and unpaid royalties for later years.
Claiming non-payment, Khan moved the NCLT seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against the company.
Jerai Fitness’s stand
Jerai Fitness refuted the allegations and accused Khan of not fulfilling his own commitments under the agreement. The company claimed that Khan failed to provide timely approvals for product designs and marketing material and also did not attend the launch of its “Proton” equipment series held in November 2023 at the Bombay Exhibition Centre.
Jerai stated that several emails and WhatsApp communications showed that it had repeatedly sought Khan’s cooperation for brand promotion. It further argued that the invoices cited by Khan were raised only after Jerai issued a termination notice in September 2024, which took effect from April 2025, and hence, could not form the basis of an insolvency action.
NCLT’s earlier order
On May 30, 2025, the NCLT Mumbai dismissed Khan’s plea under Section 9 of the Insolvency and Bankruptcy Code (IBC). The Tribunal observed that while the settlement amount of ₹1.63 crore for the earlier period was an undisputed liability, the claim for additional royalties was tied to a “pre-existing dispute” regarding Khan’s performance of contractual obligations.
The Bench ruled that the right to receive the minimum guarantee payment would arise only when the trademark could be used as agreed upon. It therefore held that the matter was essentially a civil recovery dispute, not an insolvency issue.
Unhappy with this finding, Khan had filed an appeal before the NCLAT, which he has now withdrawn following the out-of-court settlement.
