Authority: National Company Law Tribunal (NCLT), Mumbai Bench-VI

Order Date: 18 June 2026

Case Overview

This case involves an application (C.P. (IB)/884(MB)2025) filed on 29 July 2025 by One 97 Communications Limited (Operational Creditor, popularly known as Paytm) under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) against Fabzen Technologies Private Limited (Corporate Debtor). The petition sought initiation of Corporate Insolvency Resolution Process (CIRP) against Fabzen for a default of ₹3,41,92,431.50, with the date of default recorded as 07 January 2025.

The operational debt arose from digital advertising services provided by Paytm to Fabzen for promoting its gaming applications, including Ludo Empire, Callbreak Empire, and Skill Patti Empire. The services included 'Icon ads', 'Banner ads', 'Deals' and 'Scratch cards' delivered between May-June 2024 and March 2025 pursuant to seven purchase orders (PO References: 1012-1018) issued by Fabzen. Paytm raised corresponding tax invoices between November 2024 and April 2025 which remained unpaid.

The Corporate Debtor contested the admission, claiming pre-existing disputes regarding campaign performance deficiencies including user acquisition, click-through rates, and average revenue per user. Fabzen also argued that the Promotion and Regulation of Online Gaming Act, 2025 (enacted on 22 August 2025) frustrated the contract under Section 56 of the Indian Contract Act, making performance impracticable.

The Tribunal examined extensive email correspondence between the parties. While Fabzen presented emails from November 2024 and January 2025 showing performance discussions, the Tribunal found these represented routine commercial optimization talks rather than bona fide disputes over liability. Crucially, Fabzen continued placing orders and availing services after these communications and subsequently sent multiple emails between March-June 2025 acknowledging the debt and proposing repayment plans over 12 months. The Corporate Debtor also failed to respond to the statutory Demand Notice dated 19 June 2025 under Section 8 of IBC.

Final Outcome

The NCLT admitted the petition, finding that Paytm successfully established the existence of operational debt and default exceeding the ₹1 crore threshold under Section 4 of IBC. The Tribunal rejected Fabzen's defenses, noting that the alleged disputes were not raised contemporaneously and that the contract frustration argument was invalid since the debt crystallized in January 2025, predating the August 2025 gaming legislation. The Tribunal declared a moratorium under Section 14 of IBC and appointed Mr. Manish Lalji Dawda (IBBI/IPA-001/IP-P-02506/2021-2022/13797) as the Interim Resolution Professional. Paytm was directed to deposit ₹3,00,000 as initial CIRP costs with the IRP.

Topics: Corporate Insolvency, Operational Debt, Digital Services Dispute