NCLAT reserves order on plea challenging Dream 11 insolvency

New Delhi: The National Company Law Appellate Tribunal (NCLAT) on Friday reserved its judgment in a plea filed by Bhavit Sheth, cofounder and COO of Dream11, challenging a bankruptcy court order initiating insolvency resolution against its parent Sporta Technologies. The tribunal gave parties three days' time to file written submissions.

The counsel for Bhavit Sheth argued that Reward Solutions - an operational creditor that had moved the National Company Law Tribunal (NCLT) seeking corporate insolvency resolution process (CIRP) against the fantasy sports company - initiated the application based on a default occurred within the timeline covered by Section 10 A of Insolvency and Bankruptcy Code (IBC), 2016.

The government had introduced Section 10A to the IBC, prohibiting applications for CIRP initiation for defaults arising after March 25, 2020, for six months or such a period not exceeding one year from the date.


But the counsel for the NCLT-appointed resolution professional (RP) of Sporta Technologies contested that default was different from debt, and "10A only applies to default and not on ability to claim a debt which fell due". The debt was for a period that falls within the ambit of Section 10 A, but the default occurred after the period covered under Section 10 A as Dream11 was served a demand notice on April 20, 2021. The default under IBC for a Section 9 application is 10 days after the demand notice is served.