BENGALURU: The National Company Law Appellate Tribunaldismissed attempts by Byju’s founder Byju Reveendran’s brother Riju Ravindran and cricket body BCCI to withdraw insolvency proceedings against the edtech firm without creditor approval.This decision reinforces the authority of the committee of creditors (CoC) in thecorporate insolvency case.
NCLAT upheld an earlier decision by the Bengaluru bench of the National Company Law Tribunal (NCLT), which declined to immediately approve the out-of-court settlement between BCCI and Byju’s. The appellate tribunal stated that since the settlement proposal came after the formation of the CoC, it cannot proceed without the consent of 90% of the creditor group, in line with Sec 12A of Insolvency and Bankruptcy Code.
The CoC includes GLAS Trust, a US-based trustee representing lenders to whom Byju’s owes $1.2 billion, and Aditya Birla Finance. Based on admitted claims, GLAS Trust holds a 99.4% voting share in the committee.
The case stems from a sponsorship dispute involving BCCI, which filed an insolvency plea last year over unpaid dues of Rs 158.9 crore tied to a 2019 team sponsorship agreement.
Though NCLAT briefly stayed insolvency proceedings in Aug 2024 after a settlement was proposed, that ruling was overturned by the SC in Oct following objections from GLAS Trust. The lender alleged that the funds offered for settlement by Ravindran were questionable and should be directed toward broader debt obligations.
Ravindran and BCCI argued that their withdrawal application was submitted before the CoC was formed. However, the tribunal found that Form FA – the official application for withdrawal – was filed on Nov 14, 2024, by which time the CoC had already been constituted. As a result, the application triggers mandatory creditor consent.