In a significant development in the ongoing insolvency battle involving edtech major Byju’s, the Supreme Court on Monday dismissed appeals filed by the Board of Control for Cricket in India (BCCI) and Riju Raveendran, co-founder of Byju’s parent company Think & Learn Pvt. Ltd., challenging the continuation of Corporate Insolvency Resolution Process (CIRP).
A Bench comprising Justice J.B. Pardiwala and Justice R. Mahadevan affirmed the April 17 order of the National Company Law Appellate Tribunal (NCLAT), which had rejected the duo’s attempt to withdraw insolvency proceedings initiated against the company. The apex court refused to interfere with the findings of the appellate tribunal, bringing a decisive end to their withdrawal plea.
The dispute arose after the National Company Law Tribunal (NCLT), Bengaluru, in its February 10 order, directed that the settlement proposal offered by BCCI and Raveendran be placed before the newly constituted Committee of Creditors (CoC). Notably, the CoC includes US-based Glas Trust Company, the trustee representing lenders owed approximately USD 1.2 billion by Byju’s.
Challenging this directive, the appellants argued that their application for withdrawal under Section 12A of the Insolvency and Bankruptcy Code (IBC) was submitted before the formation of the CoC. They contended that in such circumstances, Regulation 30A(1)(a) of the Insolvency Resolution Process Regulations should apply, which allows withdrawal through the Interim Resolution Professional (IRP) before CoC formation, and not Regulation 30A(1)(b), which pertains to post-CoC constitution.
However, NCLAT, comprising Justice Rakesh Kumar Jain and Technical Member Jatindranath Swain, rejected the argument. The tribunal held that the Form FA application for CIRP withdrawal had been filed on November 14, 2024, a date falling after the constitution of the CoC. Consequently, Section 12A of the IBC, which requires the approval of 90% of the CoC for any withdrawal post-CoC formation, was deemed fully applicable.
The CIRP was initially triggered on July 16, 2024, when NCLT admitted a claim of ₹158.90 crore filed by BCCI as an operational creditor. An IRP was subsequently appointed to oversee the insolvency proceedings.
Though a settlement was reportedly reached between BCCI and Byju’s, Glas Trust, a significant financial creditor, moved both NCLT and the Supreme Court, opposing the withdrawal and demanding resolution of its own substantial claims amounting to over USD 984 million (approx. ₹8,200 crore).
The Supreme Court, on October 23, 2024, had earlier overturned an NCLAT stay on the CIRP and directed BCCI to approach the NCLT for settlement-related reliefs. In line with this, BCCI submitted Form FA to the IRP on August 16, 2024, but reportedly instructed the IRP to delay filing until resolution of the matter pending before the Supreme Court. This delay later became a central issue.
Raveendran further argued that the IRP was responsible for the delay in submitting the withdrawal form. However, NCLAT held that since the application was ultimately filed after the CoC had been formed, it was bound by the post-CoC requirements under Section 12A. The Supreme Court has now upheld this interpretation, reinforcing the procedural integrity of the insolvency framework under the IBC.
Picture Source :
