Dream11’s parent knocks on NCLAT door against insolvency admission by NCLT Mumbai

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Sporta Technologies, the operator of fantasy sports platform on Tuesday filed an appeal in the National Company Law Appellate Tribunal (NCLAT), Delhi against the National Company Law Tribunal (NCLT) Mumbai order admitting an insolvency petition against the unicorn money gaming platform. 

NCLT appointed Madan Bajrang Lal Vaishnawa as the interim resolution professional to conduct the insolvency resolution process. Under the country’s insolvency law, once a petition is admitted the day-to-day operations are overseen by a resolution professional and the board remains suspended.

The appeal before NCLAT is filed by Bhavit Seth, one of the co-founders and member of the now suspended Board of Directors.

Incidentally, the original plea for insolvency has been filed on behalf of Reward Solutions which itself is undergoing insolvency resolution procedure. The allegation against is that Dream11 defaulted on its dues of about Rs 7.61 crore in relation to rent of commercial premises obtained on leave and license basis.

As per a report on Economic Times, the matter is most likely to be withdrawn with an out of court settlement. Section 12A of the Insolvency and Bankruptcy Code, 2016 permits such withdrawal of admitted applications.

The matter pertains to December 2019, when Mumbai-based Reward Solutions, owner of office premises at Lower Parel in Central Mumbai, entered into a lease and licence agreement with Sporta Technologies for five years. Sporta Tecnology claimed a pre-existing dispute for non-payment of the rental amounts.

After hearing the matter, NCLT said it is constrained to take into account only the existence of an admitted debt and corresponding default which is clearly satisfied by the facts of the present case.

NCLT concluded that that emails brought on record by Dream11 only show the presence of dispute qua the payee of the debt but the existence of debt is nowhere disputed thereby satisfying the ingredients for admission of insolvency petition. The matter will now be heard by NCLAT.

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