The National Company Law Tribunal (NCLT) in Mumbai has admitted an insolvency plea against Sporta Technologies, the parent company of the popular fantasy sports platform Dream 11, owing a debt exceeding Rs. 7 crores. The decision, made on February 9, came in response to a petition filed by Piyush Jani, representing Reward Solutions Pvt Ltd, citing operational debt amounting to Rs. 7,61,08,246.

Bar and Bench reported that this tribunal, comprising judicial member Reeta Kohli and technical member Madhu Sinha, appointed Madan Bajrang Lal as the interim resolution professional to oversee the insolvency proceedings. In its 11-page order, the NCLT concluded that the petition satisfied all legal requirements for admission under Section 9 of the Insolvency and Bankruptcy Code (IBC), noting that it was filed within the prescribed limitation period of three years.

The insolvency plea stemmed from a lease and license agreement between Rewards Solutions and Sporta Technologies on December 27, 2019, spanning five years. Allegedly, Sporta failed to fulfil its rental obligations from the outset, prompting Rewards Solutions to issue a demand notice on April 20, 2021.

In response, Sporta cited challenges arising from the COVID-19 pandemic and confusion regarding the ownership of the leased premises, claiming to have received a provisional attachment order from the Enforcement Directorate on November 27, 2020. Additionally, Sporta contested the operational creditor status of Rewards Solutions.

However, the tribunal found merit in Rewards Solutions’ claim, citing evidence of non-payment of debt and the absence of a pre-existing dispute between the parties. The bench affirmed that Sporta Technologies constituted the corporate debtor and that Rewards Solutions had demonstrated the default in debt payment, warranting the initiation of the corporate insolvency resolution process (CIRP) against Sporta Technologies.

Representing Sporta, advocates Dhruva Gandhi and Anuja Jhunjhulwala, briefed by M Mullah Associates, appeared before the tribunal during the proceedings. The admission of the insolvency plea against Sporta Technologies, a significant player in the online fantasy sports arena, underscores the legal ramifications of financial default in the corporate sector. As the resolution process commences, stakeholders will closely monitor the developments, anticipating potential outcomes for Sporta Technologies and its creditors amidst the ongoing legal proceedings.