The National Company Law Appellate Tribunal issued a stay on the NCLT Mumbai bench’s order to commence a Corporate Insolvency Resolution Process (CIRP) against Sporta Technologies, the company behind the fantasy sports platform Dream11. The tribunal also directed the Interim Resolution Professional (IRP), appointed by the NCLT after suspending Dream11’s board, to refrain from taking any further actions until the next hearing scheduled for February 23. A three-member bench of the appellate tribunal also served notices to the IRP of Sporta Technologies and the Resolution Professional of Reward Business Solution, instructing them to respond within a week. The NCLAT ordered, “List this Appeal on 23.02.2024,” further stating that “In the meantime, the order impugned shall remain stayed. No steps, till the next date shall be taken by the IRP in the CIRP.”
The NCLAT’s directions came following an urgent petition filed by Bhavit Sheth, the co-founder and COO of Dream11. During the proceedings, senior advocate Arun Kathpalia, representing Sporta Technologies, requested a stay of the NCLT’s February 9 order. He also mentioned the approaching IPL season, stating that it would affect preparations.
Dream11, the title sponsor of the IPL T20 cricket league, found itself embroiled in legal proceedings after the NCLT directed the initiation of CIRP against it based on a petition filed by its operational creditor, Reward Solutions, under section 9 of the Insolvency & Bankruptcy Code (IBC), claiming dues of Rs 7.61 crore. Madan Bajrang Lal Vaishnawa was appointed as the IRP for Sporta Technologies by the NCLT.
Reward Solutions, currently undergoing an insolvency resolution process, filed the petition against Dream11. In 2019, a license agreement was signed between Reward Business Solutions and Sporta Technologies for leasing premises in Mumbai. However, a demand note of Rs 7.61 crore was received by Reward Solutions on April 20, 2021, covering the period from March 27, 2020, to April 2021.
In its petition before the appellate tribunal, Sporta Technologies contested the NCLT’s order, citing Section 10A of the Insolvency and Bankruptcy Code, 2016, which exempts defaults arising after March 25, 2020, from being subjected to the CIRP for a year. Sporta argued that the NCLT’s order failed to consider this provision, rendering it legally flawed and warranting reversal. Section 10A was introduced by the government to provide relief to companies following the resumption of economic activities post-lockdown.
