NCLAT rejects BCCI, Riju Raveendran's plea for settlement in Byju's insolvency case

NEW DELHI: National Company Law Appellate Tribunal ( NCLAT ) has dismissed appeals filed by the BCCI and Byju’s board member Riju Raveendran , rejecting their request to withdraw insolvency proceedings and allow a settlement between debt-ridden edtech firm and the cricket board.

The appellants had challenged the February 10, 2025 order by the Bengaluru bench of the National Company Law Tribunal (NCLT), which directed that their settlement proposal be submitted to the newly formed Committee of Creditors (CoC).

This CoC includes US-based Glas Trust, the trustee representing lenders to whom Byju’s owes $1.2 billion.

The Chennai NCLAT bench, comprising Justice Rakesh Kumar Jain and Jatindranath Swain, sustained NCLT's directives, noting that since the settlement proposal came after CoC formation, it requires the lender body's approval under IBC section 12A .

BCCI and Riju argued that their Section 12A application, filed before CoC constitution, should follow Regulation 30A(1)(a) rather than 30A(1)(b).

IBC Section 12A provides an insolvency exit route, requiring NCLT's permission for withdrawal of proceedings initiated under sections 7, 9 or 10, with 90% CoC voting approval.

Regulation 30A(1)(a) addresses filing through interim resolution profession pre-CoC formation, whilst 30A(1)(b) covers post-CoC formation filing.

The appellants maintained that Form FA for Corporate Insolvency Resolution Process withdrawal was submitted before Byju's CoC formation.

NCLAT rejected this, stating that, "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," NCLAT added.

CIRP against Byju's commenced on July 16, 2024, when NCLAT admitted BCCI's Rs 158.90 crore claim as operational creditor, appointing an IRP.

Following a settlement, NCLAT halted proceedings on August 2, 2024, after approving the dues settlement with BCCI, stemming from a 2019 Team Sponsor Agreement.

Glas Trust, operating as a financial creditor, submitted a distinct petition to NCLT requesting resolution for its outstanding debt of USD 984.3 million (approximately Rs 8,200 crore).

The Supreme Court invalidated the NCLAT's decision on October 23 that had halted the CIRP against Think & Learn, the parent company of edtech brand Byju's, and directed BCCI to seek resolution through NCLT.

BCCI provided Form FA to the Interim Resolution Professional (IRP) on August 16, 2024, whilst directing the IRP to submit it following the conclusion of a Supreme Court appeal.

Riju raised concerns regarding the IRP's delayed submission of the withdrawal form.

NCLAT dismissed this argument, stating: "We also do not agree with the Appellant on the issue that the IRP had erred in not submitting the application for withdrawal within three days as stipulated in Regulation 30A(3) because of the fact that the Appellant himself had directed / asked the RP to file form FA only after the dismissal of the appeal which was otherwise allowed on 23.10.2024."

NCLAT concluded in its 36-page judgement: "Thus, in view of the above facts and circumstances, we do not find any merit in these two appeals, therefore, both the appeals are hereby dismissed, though without any order as to costs."

(With inputs from PTI)