NCLT admits Paytm insolvency plea against Ludo Empire maker

The Mumbai bench of the National Company Law Tribunal (NCLT) has admitted an insolvency petition filed by Paytm's owner One97 Communications Ltd, against gaming company Fabzen Technologies Pvt Ltd over unpaid digital advertising dues of more than ₹3.41 crore [One97 Communication Ltd v. Fabzen Technologies Pvt Ltd].

By its June 18 order, the NCLT has initiated the corporate insolvency resolution process (CIRP) against Fabzen, which operates games such as Ludo Empire, Callbreak Empire and Skill Patti Empire.

One97 (Paytm) had approached the tribunal under the Insolvency and Bankruptcy Code (IBC) alleging that Fabzen defaulted on invoices raised for in‑app advertising campaigns from October 2024 onwards, despite a 60‑day credit period and multiple follow‑ups. 

Emails placed on record showed Fabzen repeatedly acknowledging outstanding dues, proposing a 12‑month payment schedule and seeking more time to pay.

Fabzen, however, claimed there were serious disputes over the performance of the Paytm Ads campaigns, citing emails from November 2024 and January 2025 that complained about poor‑quality users, high acquisition costs and missed performance targets. 

It also relied on the Promotion and Regulation of Online Gaming Act, 2025, to argue that new restrictions on online gaming companies had wiped out the commercial basis of the deal and automatically ended the contract under Section 56 of the Indian Contract Act.

The NCLT Bench of judicial member Nilesh Sharma and technical member Sameer Kakar rejected both arguments. 

It found that the emails cited by Fabzen reflected routine performance discussions with no specific mention of services or disputes over invoices. 

It also noted that Fabzen continued to place purchase orders and avail services without raising any complaints or grievances alleging deficiency.

“Such conduct is inconsistent with the stand that the services were fundamentally deficient or commercially unacceptable,” the Bench remarked.

It rejected the gaming‑law defence as well, emphasising that Fazben’s default was from January 7, 2025, whereas the Online Gaming Regulation Act was passed only in August 2025 and operated prospectively. 

“The operational debt claimed in the present petition had already become due and crystallised prior to the enactment of the said legislation,” the Bench concluded. 

In view of these findings, the tribunal proceeded to initiate CIRP against Fabzen and appointed insolvency professional Manish Lalji Dawda as an interim resolution professional.

Advocates Nikita Abhyankar, S. Vatsa and Vijayant, briefed by Gravitas Legal, appeared for Paytm.

Advocates Devashish Godbole and Aman Pawar appeared for Fazben. 

[Read order]