Paytm operator One97 Communications has secured an insolvency order from the NCLT against Fabzen Technologies for ₹3.41 crore in unpaid advertising dues. While the recovery amount is not material for a company of One97's size, the ruling underscores the firm's legal approach to recovering operational debt from digital business partners amidst a changing regulatory landscape for the gaming sector.
What Happened
The National Company Law Tribunal (NCLT) Mumbai bench has admitted an insolvency petition filed by One97 Communications, the parent company of the digital payments platform Paytm, against gaming firm Fabzen Technologies Private Limited. The tribunal’s order, issued on June 18, 2026, concerns outstanding dues of ₹3.41 crore related to digital advertising services.
One97 initiated the proceedings under Section 9 of the Insolvency and Bankruptcy Code (IBC), citing a default that occurred on January 7, 2025. The tribunal concluded that One97 successfully proved the existence of operational debt and that the gaming company failed to present a valid, pre-existing dispute regarding the invoices for services rendered.
The Dispute Over Advertising Services
The conflict originated from a business arrangement where One97 provided advertising services—including banner ads, icon placements, and scratch cards—for Fabzen’s gaming portfolio, which includes titles such as Ludo Empire and Callbreak Empire. While initial invoices from 2024 were cleared, payments for campaigns starting in October 2024 remained unsettled.
Fabzen had attempted to defend itself by claiming that the advertising campaigns were underperforming and did not meet expected user acquisition targets. The gaming firm argued that it had requested to pause advertisements due to poor performance. However, the tribunal rejected this defense, noting that the company’s internal communications were primarily discussions about campaign optimization rather than a formal rejection of the services or the validity of the invoices. The court pointed out that Fabzen continued to utilize the services and place purchase orders even while raising performance concerns.
Regulatory Context and Business Impact
Fabzen also attempted to invoke the Online Gaming Act, 2025, to argue that the commercial contract had become unenforceable. The NCLT dismissed this, clarifying that the debt had already crystallized in early 2025, before the new legislation came into force. This case highlights the ongoing regulatory shifts affecting the gaming industry, which can create business uncertainties for both gaming companies and the service providers who rely on them for advertising revenue.
For One97 Communications, the recovery of ₹3.41 crore is not a material financial event given the scale of the company's overall operations and revenue. However, the move demonstrates the company's active approach to legal and operational debt recovery. The NCLT has now appointed an interim resolution professional to manage the process, and a moratorium has been imposed on Fabzen Technologies.
What Investors Should Track
Investors may monitor how One97 manages such operational recoveries as part of its broader strategy to maintain healthy cash flows in its business services division. Additionally, the broader gaming sector faces increased scrutiny under the Online Gaming Act, 2025. Any potential impact on advertising budgets from clients in this sector remains a point to watch, as regulatory pressures on gaming companies could influence the consistency of ad spending from these partners.