New Delhi: The Supreme Court Monday upheld an order rejecting the appeals of the BCCI and Byju’s co-founder Riju Raveendran, seeking the withdrawal of insolvency proceedings against his company.
A bench comprising Justices J B Pardiwala and R Mahadevan dismissed the appeals filed by the Board of Control for Cricket in India (BCCI) and Raveendran challenging the National Company Law Appellate Tribunal (NCLAT) verdict April 17.
BCCI and Raveendran had previously challenged an order of the Bengaluru bench of the National Company Law Tribunal, which on February 10 directed to place their settlement offer before the new Committee of Creditors (CoC), in which US-based Glas Trust, the trustee for lenders to which Byju’s owes USD 1.2 billion, is a member.
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 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 also appointed by the NCLT in this matter.
Later, a settlement was reached between the parties and Raveendran approached NCLAT.
The appellate tribunal set aside the insolvency proceedings against Byju’s August 2, 2024 after approving the dues settlement with the BCCI, which had entered into a Team Sponsor Agreement with the cricket body in 2019.
Glas Trust challenged this 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 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) 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.
