The Supreme Court on Monday upheld the National Company Law Appellate Tribunal's (NCLAT) decision, refusing to allow the withdrawal of insolvency proceedings against Think & Learn Pvt. Ltd., the parent company of Byju's. The pleas, filed by the Board of Control for Cricket in India (BCCI) and Byju's co-founder Riju Raveendran, were dismissed by a bench of Justices JB Pardiwala and R Mahadevan, which declined to interfere with NCLAT’s April 17 ruling.
Earlier, the NCLAT had rejected the appeals from BCCI and Raveendran, stating that the Corporate Insolvency Resolution Process (CIRP) can only be withdrawn with the approval of at least 90% of the Committee of Creditors (CoC).
NCLAT had held that any application to withdraw the Corporate Insolvency Resolution Process (CIRP) against Think & Learn Pvt. Ltd. (the company running Byju's) requires the support of 90 per cent of its Committee of Creditors (CoC).
On April 17, the National Company Law Appellate Tribunal (NCLAT) had set aside the appeals filed by BCCI and Byju's Riju Ravindran seeking withdrawal of insolvency proceedings against Byju's. NCLAT had held that any application to withdraw the Corporate Insolvency Resolution Process (CIRP) against Think & Learn Pvt. Ltd. (the company running Byju's) requires the support of 90 per cent of its Committee of Creditors (CoC).
A two-member Chennai bench of the NCLAT comprising Justice Rakesh Kumar Jain and Jatindranath Swain upheld the directions passed by the NCLT and said the settlement proposal was filed after the formation of CoC, hence as the provisions of Section 12 A of the Insolvency & Bankruptcy Code, it requires the approval of the lender's body. Both BCCI and Raveendran contended since the application under Section 12A was filed before the constitution of the CoC, the provisions of Section 12A coupled with Regulation 30A(1)(a) shall apply and not Regulation 30A(1)(b).
Section 12 A of IBC prescribes an exit route from insolvency. It mandates that NCLT may allow the withdrawal of insolvency initiated by any financial or operational creditor under Sections 7,9 or section 10, based on an application made with the approval of 90 per cent voting share of the CoC. Regulation 30A(1)(a) deals with the provision of filing Section 12 A proceedings through the interim resolution profession before formation of CoC whereas 30A(1)(b) deals with provision of filing after formation of CoC.
The BCCI and Byju's contended Form FA, which is an application for withdrawal of Corporate Insolvency Resolution Process (CIRP), was submitted before the formation of CoC of Byju's.
However, rejecting the plea NCLAT said, "Form FA, admittedly having been filed on November 14, 2024, is post (formation of) CoC." "If the application under Section 12A is filed under Regulation 30A(1)(a) before the constitution of CoC then Section 12A which mandates the approval of such application for withdrawal by 90 per cent voting share of the CoC shall not apply but if the application is filed after the constitution of the CoC then the provisions of Section 12A shall apply with full force," said NCLAT.
CIRP against Byju's was initiated on July 16, 2024 by NCLAT admitting a Rs 158.90 crore claim from BCCI as an operational creditor of edtech major. An IRP was appointed also by the NCLT in this matter. Later, a settlement was arrived between the parties and Raveendran approached NCLAT.
The appellate tribunal set aside the insolvency proceedings against Byju's on August 2, 2024 after approving dues settlement with the BCCI, which had entered into a Team Sponsor Agreement with the cricket body in 2019. This was challenged by Glas Trust before the Supreme Court.
Glas Trust, a financial creditor, also filed a separate petition before NCLT seeking resolution of its debt of USD 984.3 million (approximately Rs 8,200 crore). The apex court on October 23, 2024, set aside the NCLAT order staying the CIRP against Think & Learn, which owns edtech brand Byju's and asked BCCI to approach NCLT for the settlement.
Although BCCI submitted Form FA to the Interim Resolution Professional (IRP) on August 16, 2024, it had instructed the IRP to file it only after the resolution of an appeal pending before the Supreme Court. Raveendran contended before NCLAT there was a delay on the part of the IRP in filing the withdrawal form.
The NCLAT, however, rejected the plea.
*With Agency Inputs
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