NCLT Holds Order On Byju’s Creditor Appeals On Plea By Glas Trust And Aditya Birla Finance

NCLT Holds Order On Byju’s Creditor Appeals On Plea By Glas Trust And Aditya Birla Finance

The two entities were part of the ed-tech firm’s CoC but were removed from the list after its IRP reconstituted the CoC

The National Company Law Tribunal (NCLT) has reserved its order on Glas Trust and Aditya Birla Finance’s appeals to be added to the Committee of Creditors (CoC) and the Board of Control for Cricket in India's (BCCI) application to withdraw the insolvency petition against the cash-strapped Byju's.

Glas Trust and Aditya Birla were part of Byju's CoC but were removed from the list when the ed-tech firm’s Insolvency Resolution Professional (IRP) Pankaj Srivastava reconstituted the CoC.

Srivastava stated that the CoC was formed provisionally due to pressure from Glas Trust to establish the CoC after the Supreme Court passed the order.

The IRP expressed, "A letter was issued to all financial creditors stating that their claims are not fully admitted and are subject to further verification. The pressure on the IRP began from day one, especially from Glas Trust.”

The bench questioned his assertion of being under pressure. "You have been given enormous power by this court. You are representing us. You should come to us and tell us that somebody is putting pressure on you. You are not an independent authority; you are acting on our behalf, please understand that.”

Earlier, the counsel for the IRP argued that Glas Trust's claim to be included in the CoC was contested because of a pending New York court case on the term loan B.

However, Senior Advocate Srinivasa Raghavan, representing Glas Trust, argued that the IRP was aware of the cases before the CoC was constituted. He reiterated that once the CoC is formed, the IRP is not authorized to reconstitute it, as that power rests with the NCLT. "We must be inducted into the CoC, and the CoC must be reconstituted," he added.

Representing Aditya Birla, Pramod Nair argued that the IRP could revise the amount but not the status of the committee.

He said, “The law is unequivocally clear that once the status of a creditor as a financial creditor is determined, there cannot be any further unilateral reclassification by the IRP. They will have to come before the court, which has not happened.”

In November last, the IRP requested the tribunal to consider BCCI's application to withdraw its petition. The next month, it was reported that Glas Trust sought rejection of the BCCI's application to withdraw its insolvency petition against Byju’s questioning the application’s maintainability.

Glas Trust argued that the withdrawal application should first be presented to the CoC, followed by a 90 percent vote. Thereafter, it should be brought before the NCLT.

The IRP's counsel said that the application was initially filed by the BCCI before the CoC was formed. Hence, voting was not required.