NCLT issues notice in Surfer Technologies' insolvency plea against Byju's

NCLT issues notice to Byju's

The National Company Law Tribunal (NCLT) on February 6 issued a notice in an insolvency plea filed by a digital marketing firm called Surfer Technologies against ed-tech giant Byju's. NCLT has asked Byju's to file a response to the plea in two weeks, with the case now likely to come up for hearing on March 5. This is the second plea against Byju's that the NCLT has issued a notice in.

During the course of the hearing, Surfer argued that Byju's owes them Rs. 2.3 crore and all of them are admitted debts. According to Surfer, they were generating leads for Byju's and passing them on; these leads were overseen and then authorised by the ed-tech company.

Surfer is the fourth entity to approach the NCLT against Byju's after Board of Control for Cricket in India (BCCI), France-based Teleperfomance Business Services company, and the lenders. Surfer's plea was filed on January 9, while it was registered on February 1. Surfer would fall under the category of operational creditor as it is a service provider.

There are two kinds of creditors under IBC: operational creditors (OCs), and financial creditors (FCs). OCs are those who provide goods and services to a business but have not been paid while FCs are those who lend money to the company.

While Byju's lenders are likely to be classified as FCs, Teleperformance is likely to be classified as an OC.

Byju's VS BCCI:

In November 2023, NCLT issued a notice in a plea by BCCI against Byju's.  The cricket board claimed that Byju's had defaulted on a payment of Rs 158 crore. “It is stated that the General notice was issued to BYJU’s vide email dated 06.01.2023 and the default amount of Rs 158 crore. excluding TDS as reflected,” the NCLT order read.

Byju's previously had three significant branding partnerships with the BCCI, ICC (International Cricket Council), and FIFA (Federation Internationale de Football Association), all of which were up for renewal in 2023. However, the company confirmed in early 2023 that it would not renew any of them. It remains unclear whether the filed suit is related to this matter or another issue.

BCCI's case is expected to come up for a hearing on February 7, 2024.