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It was contended that the application filed by the operational creditor was barred by Section 10A, and this aspect was not considered by the NCLT
The National Company Law Appellate Tribunal (NCLAT) has granted an interim stay on the Corporate Insolvency Resolution Process (CIRP) initiated against Sporta Technology Pvt Ltd, the owner of the fantasy sports platform Dream11.
The NCLAT bench, consisting of Chairperson Justice Ashok Bhushan and Technical Members Barun Mitra and Arun Baroka, stayed the order passed by the National Company Law Tribunal (NCLT) that had initiated the CIRP against Sporta Technology.
The appeal before the National Company Law Appellate Tribunal (NCLAT) challenging the order of the NCLT was filed by Bhavit Sheth, the Co-founder of Sporta Technology Pvt Ltd.
It was contended that the application filed by the operational creditor was barred by Section 10A, and this aspect was not considered by the NCLT.
The Interim Resolution Professional, Madan Bajrang Lal Vaishnawa, stated that after filing the application under Section 9, the operational creditor had also issued a fresh notice under Section 8 on January 23, 2023.
Vaishnawa further mentioned that the operational creditor had filed an application for the withdrawal of the Section 9 petition to allow the filing of a fresh application, and no order had been passed on that application.
Considering the merit in this submission, the NCLAT ordered a stay on the NCLT's order.
The NCLAT provided a week for the parties to file their replies and scheduled the matter for further hearing on February 23, 2024.
Reward Solution, the operational creditor, claimed that Sporta Technology had defaulted on an operational debt amounting to ₹7,61,08,246.
The dispute between Sporta Technology Pvt Ltd (Dream11) and Reward Solution Pvt Ltd involved a lease agreement signed in December 2019 for five years.
According to Reward Solution, Sporta Technology defaulted on payments from the beginning of the lease.
The operational creditor argued that Sporta Technology did not respond to the notice, leading to the filing of a Section 9 petition.
Mr. Arun Kathpalia, Sr. Advocate with Ms. Anuja Jhunjhunwala, Mr. Karan Malhotra, Mr. Ayush Pratap Singh, Mr. Parish Mishra, Advocates - For Appellant.
Mr. Abhijeet Sinha, Sr. Advocate with Mr. Anirudh Sinha, Ms. Heena Kochar, Mr. Aishvary Vikram, Mr. Ritvik Bhanot, Advocates with Mr. Madan B. Vaishnawa, IRP for R-1.
Case title: Bhavit Sheth vs Madan Bajrang Lal Vaishnawa, IRP of Sporta Technology Pvt Ltd.
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