NCLAT stays insolvency process against Dream 11 till February 23

The National Company Law Appellate Tribunal (NCLAT) recently granted a temporary stay on an order of the NCLT Mumbai admitting an insolvency plea against Sporta Technologies, owner of fantasy sports platform Dream 11, for a debt of over ₹7 crore. [Bhavit Sheth v. Madan Lal (IRP, Sporta Technologies)].The NCLT had admitted the insolvency plea on Feburary 9 based on an application by Piyush Jani, resolution professional of creditor Reward Solutions for a default of ₹7,61,08,246 on the part of Dream 11..This order was challenged by Bhavit Sheth, co-founder and Chief Operational Officer of Dream 11 before the NCLAT. A coram of Chairperson Ashok Bhushan and technical members Barun Mitra and Arun Baroka directed the interim resolution professional to not take any steps in furtherance of the Corporate Insolvency Resolution Process (CIRP) till February 23, when the appeal will be heard next.The appellate tribunal also sought the response of Reward Solutions on the appeal. .The appeal before the NCLAT contended that the application seeking initiation of insolvency against Dream 11 was barred under Section 10A of the Insolvency and Bankruptcy Code. Section 10A deals with suspension of initiation of CIRP for any default arising on or after March 25, 2020, for a period of six months. The appeal pointed out that this aspect was not considered by the NCLT..The interim resolution professional (IRP) for Dream 11 responded to the petition stating that after filing of the application under Section 9, Reward Solutions had issued a fresh demand noitce on January 23, 2023. There was also an application filed for withdrawal of the Section 9 petition to allow filing of a fresh application, but no order was passed on that application. NCLAT opined that these submissions were required to be considered, and sought a reply from Reward Solutions. It adjourned the hearing on the appeal to February 23 and stayed the NCLT Mumbai order..Senior Advocate Arun Kathpalia with Advocates Anuja Jhunjhunwala, Karan Malhotra, Ayush Pratap Singh and Parish Mishra appeared for Bhavit Sheth. Senior Advocate Abhijeet Sinha with Advocates Anirudh Sinha, Heena Kochar, Aishvary Vikram and Ritvik Bhanot appeared for Dream 11 through the IRP..[Read order]