NCLAT Directs NCLT Bengaluru ON Byju’s Insolvency

The National Company Law Appellate Tribunal (NCLAT) has issued a directive to the Bengaluru bench of the National Company Law Tribunal (NCLT) to make a decision on the Board of Control for Cricket in India’s (BCCI) withdrawal application in the Byju’s insolvency case within a week. This move comes after an appeal filed by Byju’s suspended director, Riju Ravindran, against the non-pronouncement of the order on the withdrawal application by the NCLT.

Justice Rakesh Kumar Jain of the NCLAT stated, “The grievance of the appellant can be redressed by issuing a direction to the tribunal… on the application which has already been reserved, to decide the said application as early as possible, but preferably within a period of one week from the date of passing of this order.” He emphasized that while disposing of this appeal, the tribunal has not made any observations on the merits of the case and that the NCLT must take an independent decision regarding the application.

Ravindran, represented by Senior Advocate Arun Kathpalia, argued that any action related to the corporate insolvency resolution process (CIRP), including the reconstitution of the committee of creditors (CoC), would be prejudicial to the interests of the company’s promoters. Kathpalia highlighted the urgency of the matter, noting that the CoC meeting is scheduled for Saturday.

On January 8, the NCLT reserved its orders on the petitions filed by Glas Trust and Aditya Birla Finance, seeking to be included in the CoC of Byju’s parent company, along with the BCCI’s application to withdraw its insolvency petition against the firm. However, the order on January 29 was only pronounced in the matter regarding the Glas Trust case, where the tribunal inducted Glas Trust and Aditya Birla Finance onto the CoC of the edtech firm. This decision set aside the reconstitution of the panel carried out by the company’s interim resolution professional (IRP) on August 31.

Kathpalia argued that the withdrawal application was submitted before the CoC was formed and therefore does not require CoC approval. In contrast, Glas Trust countered by stating that the withdrawal application was filed solely with the IRP and not with the tribunal. The arguments regarding the maintainability of the application have already been presented before the NCLT.

The NCLAT’s directive underscores the urgency and importance of resolving the BCCI’s withdrawal application swiftly. As the NCLT Bengaluru bench prepares to make a decision within the stipulated timeframe, the outcome will have significant implications for Byju’s insolvency case and the interests of all stakeholders involved. Stay tuned for further updates as this case continues to unfold.