 "dream 11")
The National Company Law Appellate Tribunal on Wednesday stayed the NCLT Mumbai bench order to initiate a corporate Insolvency Resolution Process (CIRP) against Sporta Technologies, which operates the fantasy sports platform Dream 11.
However, it has also directed the Interim Resolution Professional (IRP), appointed by the National Company Law Tribunal (NCLT) after suspending the board of Dream 11, not to take any further steps till the next date of hearing, scheduled for February 23.
A three-member bench of the appellate tribunal also issued notice to the IRP of Sporta Technologies and Resolution Professional of Reward Business Solution, directing them to file a reply within a week.
"List this Appeal on 23.02.2024," the National Company Law Appellate Tribunal (NCLAT) order said, adding 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".
NCLAT directions came over an urgent petition moved by Dream11 co-founder and COO Bhavit Sheth.
During the proceedings, senior advocate Arun Kathpalia, representing Sporta Technologies, requested a stay of the order passed by the NCLT on February 9.
He further submitted that IPL is approaching near and it will impact its preparation for the coming season.
Dream 11 is the title sponsor of the IPL T20 cricket league also.
Kathpalia also offered to deposit the money and said this was stopped on account of some disputes, as there was no clarity as to whom the payment was to be made.
The NCLT had directed to initiate CIRP against Dream 11 over 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.
It had also appointed Madan Bajrang Lal Vaishnawa as IRP for Sporta Technologies.
Interestingly, Reward Solutions itself is going through an insolvency resolution process and the plea was filed by its resolution professional.
In 2019, a license agreement was executed between Reward Business Solutions being the licensor, and Sporta Technologies.
It had leased a premise in Mumbai for five years to Sporta Technologies for which terms of payment were defined.
However, it received a demand note of Rs 7.61 crore on April 20, 2021, for a period of March 27, 2020, till April 2021.
Opposing it, Sports Technologies in its petition filed before the appellate tribunal said the NCLT in its order ignored the fact that the demand "period from March 27, 2020, to March 26, 2021, is squarely covered/exempted under Section 10A of the Insolvency and Bankruptcy Code, 2016".
"However, under the caption Findings', the Adjudicating Authority (NCLT) has failed to even comment on, let alone consider, the submission of the Corporate Debtor. On this ground alone, the Impugned Order is bad in law, and deserves to be set aside," it said.
Section 10A mandates no application for initiation of a corporate insolvency resolution process (CIRP) can be filed against any debtor by any financial and operational creditor for any default arising on or after March 25, 2020, for a period of one year.
This was a special provision inserted by the government in IBC to help the companies after the economic activities had resumed post-lockdown in phases.
