NCLT admits plea against Dream11 parent for Rs 7.6 Cr default

The National Company Law Tribunal (NCLT) has accepted an insolvency plea against Sporta Technologies—the parent firm of real money gaming startup Dream11—over rent overdue totalling about Rs 7.6 crore, which has occurred since March 2020.

YourStory has seen a copy of this plea, filed by Piyush Jani, on behalf of Reward Business Solutions Pvt Ltd, over Sporta Technologies' failure to pay pending dues.

According to the document, Reward Business Solutions had given Sporta Technologies five years with a monthly license fee of Rs 49,83,636 for the initial three years and Rs 57,31,181 for the remaining two years.

However, the Dream11 parent company had failed to pay the licensing fee it owed.

"The case of the Applicant is that right from the beginning, the Respondent (Sporta Technologies) has failed to pay the license fee. Having been left with no option, on 20.04.2021 the Demand Notice was issued under section 8 in Form 3 under Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 of the Code for outstanding license fee from 28.03.2020 to 27.04.2021 amounting to Rs. 7,61,08,246/-," it said.

Sporta, however, in its response to the demand notice said, "it lost its rightful opportunity to negotiate the License Fees due to the impact of the on-going Covid-19 Pandemic and confusion with regards to ownership of the leased premises with the Petitioner or a third party named Mangalam Vanijya Private Limited."

Dream11 declined to comment on the development.

"Considering the above facts, we are of the considered view that this Petition deserves to be admitted under Section 9 of the Code,” said the tribunal order dated February 9. The court has also appointed Madan Bajrang Lal Vaishnawa as the interim resolution professional for the matter. 

In September 2023, The Directorate General of GST Intelligence (DGGI) had sent pre-show cause notices to a number of gaming firms over GST dues of about Rs 55,000 crore, including a notice of about Rs 25,000 crore to Dream 11, media reports suggested.