Reward Solutions filed the petition, citing non-payment of license fees outlined in a lease agreement despite a demand notice.
The NCLT has admitted an insolvency plea filed by Reward Solutions against Sporta Technologies, alleging non-payment of license fees specified in a lease agreement, despite a demand notice.
The National Company Law Tribunal (NCLT) has accepted an insolvency petition against Sporta Technologies, the parent company of fantasy gaming platform Dream11, due to a default in rent payment exceeding Rs 7.6 crore.
The petition, filed by Piyush Jani, a resolution professional representing Reward Solutions, stated that Reward Solutions had entered into a lease and license agreement with Sporta in 2019 for a duration of 5 years. As per the agreement, Sporta was obligated to pay a monthly license fee of Rs 49.8 lakh for the initial three years and Rs 57.3 lakh for the subsequent two years. The agreement also included a lock-in period of 33 months, during which Sporta could not terminate the agreement.
However, Sporta failed to fulfill its payment obligations, leading Reward Solutions to issue a demand notice on April 20, 2021, under Section 8 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, for the outstanding license fee amounting to Rs. 7,61,08,246. Despite the notice, Sporta did not comply, prompting Reward Solutions to file the insolvency petition.
In response, Sporta argued that the impact of the Covid-19 pandemic and confusion regarding the ownership of the leased premises hindered their ability to negotiate the license fees with Reward Solutions or a third party named Mangalam Vanijya Private Limited.
However, the tribunal recognized Reward Solutions as a legitimate Corporate Debtor and found that Sporta had committed operational debt default without any preexisting dispute between the parties. Consequently, on February 9, the tribunal ordered the admission of the petition under Section 9 of the Code and appointed Madan Bajrang Lal Vaishnawa as the interim resolution professional for the case.
Reward Solutions filed the petition, citing non-payment of license fees outlined in a lease agreement despite a demand notice.
The NCLT has admitted an insolvency plea filed by Reward Solutions against Sporta Technologies, alleging non-payment of license fees specified in a lease agreement, despite a demand notice.
The National Company Law Tribunal (NCLT) has accepted an insolvency petition against Sporta Technologies, the parent company of fantasy gaming platform Dream11, due to a default in rent payment exceeding Rs 7.6 crore.
The petition, filed by Piyush Jani, a resolution professional representing Reward Solutions, stated that Reward Solutions had entered into a lease and license agreement with Sporta in 2019 for a duration of 5 years. As per the agreement, Sporta was obligated to pay a monthly license fee of Rs 49.8 lakh for the initial three years and Rs 57.3 lakh for the subsequent two years. The agreement also included a lock-in period of 33 months, during which Sporta could not terminate the agreement.
However, Sporta failed to fulfill its payment obligations, leading Reward Solutions to issue a demand notice on April 20, 2021, under Section 8 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, for the outstanding license fee amounting to Rs. 7,61,08,246. Despite the notice, Sporta did not comply, prompting Reward Solutions to file the insolvency petition.
In response, Sporta argued that the impact of the Covid-19 pandemic and confusion regarding the ownership of the leased premises hindered their ability to negotiate the license fees with Reward Solutions or a third party named Mangalam Vanijya Private Limited.
However, the tribunal recognized Reward Solutions as a legitimate Corporate Debtor and found that Sporta had committed operational debt default without any preexisting dispute between the parties. Consequently, on February 9, the tribunal ordered the admission of the petition under Section 9 of the Code and appointed Madan Bajrang Lal Vaishnawa as the interim resolution professional for the case.
