The National Company Law Tribunal (NCLT) has admitted fintech major Paytm’s insolvency plea against online gaming company Fabzen Technologies, which operates games such as Ludo Empire, Callbreak Empire and Skill Patti Empire, over unpaid digital advertising dues of over ₹3.41 Cr.
Paytm parent One97 Communication has alleged that Fabzen failed to honour invoices for in-app advertising since October 2024 despite a 60‑day credit period and multiple follow‑ups.
Paytm provided ‘icon ads’, ‘banner ads’, ‘deals’ and ‘scratch cards’ to Fabzen for promotion and marketing of its gaming applications.
The two parties held multiple discussions to resolve the issue. Paytm said it made “repeated requests and concessions” and received false assurance from Fabzen that the dues will be cleared within set timelines. However, the gaming company didn’t clear the dues even after late-fee charges and interest started to accrue.
Following this, the fintech major approached the Mumbai bench of the NCLT under the Insolvency and Bankruptcy Code (IBC) in July 2025. Paytm noted in its petition that Fabzen continued to avail its advertising services even when it had defaulted on previous dues.
In its response, Fabzen said that the services provided by Paytm were subpar, questioning the performance, efficiency, and delivery quality of its ad campaigns. “The advertisements were found to be underperforming in terms of user acquisition, click-through rate (CTR), and average revenue per user (ARPU), despite the budgets being fully utilised,” it told the Tribunal.
Subsequently, Fabzen asked Paytm to stop the ad campaigns in January 2025 following “poor user quality, high customer acquisition cost (CAC), and failure to achieve mutually agreed KPIs”.
Paytm said Fabzen never disputed the dues it owed the fintech company, nor did it highlight any defect in the services. In any case, in-app advertising has no scope for underperformance and defect in services, it added.
The Tribunal also held that there was no mention of disputed invoices in the email exchanges between both parties. Moreover, Fabzen continued to place orders for subsequent campaigns without raising any complaints about service deficiencies.
Fabzen also held that since the Promotion and Regulation of Online Gaming Act, 2025 was passed last year, its business had suffered losses and the restrictions on real money gaming (RMG) had made the commercial basis of the deal void and automatically ended the contract under Section 56 of the Indian Contract Act.
On this, the Tribunal highlighted that the Act was passed in August 2025, while Fabzen began defaulting in January that year. It noted that the debt had “already become due and crystallised prior to the enactment of the said legislation”.
This is the second insolvency plea filed by Paytm against a RMG platform since the online gaming regulations were passed last year. In November last year, it moved the NCLT against WinZO games over unpaid dues amounting to ₹3.6 crore arising from advertising services.
The NCLT slapped a fine of ₹20,000 on WinZO after it failed to submit a response to the petition. However, WinZO, in public remarks, said that the disputed invoices were never approved and that an internal audit had found material discrepancies in Paytm’s claims and compliance records.
Source: Inc42 - Startups
