The planetary gearbox is often susceptible to faults under dynamic condition. Most of the literature assumes that gearboxes are free from defects. But in real-time working condition these assumptions are not accurate. Therefore the challenge lies in identifying and localizing a fault in planetary gearbox under dynamic condition. In this paper, the focus is on modelling and simulation of a fault in a planetary gearbox and validate the same with experimental tests. A planetary gearbox is modelled as per DIN standard and simulated for time and frequency domain signals. On comparing a fault free and fault induced frequency domain signals, a small peaks are observed on either side of the mesh frequencies, indicating the presence of a fault in the planetary gearbox. These peaks around the mesh frequencies are used to localize the fault in a planetary gearbox. Simulation results are validated with the experimental test results of the planetary gearbox under dynamic conditions. Similar trend is observed in simulation and experimental results.