Byju's insolvency case: NCLT defers ruling on Glas Trust's plea against CoC meetings

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The National Company Law Tribunal (NCLT) Bengaluru bench on Wednesday deferred its decision on a plea filed by US-based lender Glas Trust LLC, which sought to halt further meetings of the Committee of Creditors (CoC) in the ongoing insolvency case against Byju’s.

The tribunal cited the Supreme Court's earlier directive allowing the CoC's formation, as tensions continue to escalate between Byju’s lenders and the edtech giant's appointed Insolvency Resolution Professional (IRP), Pankaj Srivastava.

Glas Trust, representing a consortium of lenders that extended a $1.2 billion Term Loan B to Byju’s parent company Think & Learn Pvt Ltd, found itself ousted from the CoC during its first meeting on Tuesday.

The US lender has accused Srivastava of fraud, claiming he manipulated the process by moving the CoC meeting forward by nine hours without notifying Glas Trust or its advisors. According to Glas Trust's counsel, the IRP disqualified the US lender just 50 minutes after the meeting began, alleging that the trust did not represent the minimum 51 percent of lenders in the consortium.

During Wednesday’s hearing, Glas Trust’s counsel urged the NCLT bench to prevent the CoC from holding further meetings, arguing that Srivastava’s actions undermined the tribunal’s authority.

“The IRP has no power to adjudicate; it is your power of adjudication,” the counsel stated, emphasising the alleged fraudulent methods used by Srivastava.

However, the NCLT bench, led by Justices K Biswal and Manoj Kumar Dubey, deferred the matter to September 11, stating that they could not stop the CoC’s proceedings as the Supreme Court had already allowed its formation on August 21.

The bench added that Glas Trust could file a separate application if it wished to pursue this matter further.

The ongoing conflict stems from a previous Supreme Court ruling on August 14 that revived the insolvency case against Byju’s, after the National Company Law Appellate Tribunal (NCLAT) had quashed the proceedings and approved a Rs 158 crore settlement between Byju’s and the Board of Control for Cricket in India (BCCI).

Glas Trust had opposed the settlement, arguing that as a financial creditor, it should take priority in repayments over BCCI, an operational creditor.