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NCLAT Overturns NCLT’s Order Against Dream11 Parent

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The National Company Law Appellate Tribunal (NCLAT) has dismissed insolvency proceedings against Sporta Technologies, the parent company of fantasy sports platform Dream11, for an alleged rent default of over INR 7.6 Cr. The Appellate Tribunal noted that the National Company Law Tribunal (NCLT) wrongly admitted the insolvency plea, overlooking the exemption period under the Insolvency and Bankruptcy Code. The NCLAT's decision comes after Reward Solutions filed the insolvency plea in February 2024, claiming that Sporta Technologies failed to comply with a lease agreement. Dream11 recently faced challenges due to the 28% GST imposed on the online gaming sector and a substantial GST notice from the tax authorities. However, the company saw growth in its user base, net profit, and operating revenue in the financial year 2022-2023.