Former Byju’s Resolution Professional Challenges NCLT Order In NCLAT
Former Byju’s Resolution Professional Challenges NCLT Order In NCLAT
The former Resolution Professional (RP) of the insolvency-bound edtech firm Byju’s has approached the National Company Law Appellate Tribunal (NCLAT) to challenge the disciplinary action recommended against him by the Bengaluru bench of the National Company Law Tribunal (NCLT). Additionally, Riju Raveendran, former promoter of Byju’s and brother of Byju Raveendran, has also moved the NCLAT against the NCLT order that reinstated Glas Trust and Aditya Birla Finance in the Committee of Creditors (CoC) of the edtech firm.
On January 29, the NCLT directed disciplinary proceedings against Pankaj Srivastava, the suspended RP, and overturned his decision to exclude Glas Trust and Aditya Birla Finance from Byju’s CoC. Srivastava has now challenged this order before the Chennai bench of NCLAT, arguing that he was not given a fair hearing by the NCLT, which he claims goes against established legal norms. In his petition, he described the tribunal’s observations as unreasonable and unfair.
The matter came up for hearing on Thursday before the Chennai bench of NCLAT. However, Justice Sarad Kumar Sharma recused himself from the case, citing his previous role as legal counsel for the Board of Control for Cricket in India (BCCI), which had filed a petition against Byju’s for recovery of dues. The case has now been referred to the Chairperson of NCLAT, who will assign it to a new bench.
Riju Raveendran, in his submission, argued that the NCLT should not have reconstituted the CoC while the matter concerning the withdrawal of the Corporate Insolvency Resolution Process (CIRP) due to a settlement with the Registrar of Companies (ROC) was still pending. He also pointed out that the Supreme Court had granted them the liberty to pursue appropriate legal remedies following the settlement.
In its January 29 order, the NCLT had directed the Insolvency and Bankruptcy Board of India (IBBI) to conduct an inquiry against Srivastava, stating that his conduct was "not fit and proper as expected." The tribunal asserted that the RP’s actions warranted disciplinary proceedings by the IBBI.
Furthermore, the NCLT nullified the reconstitution of Byju’s CoC, which had been carried out by Srivastava on August 31, 2024. This restructuring had excluded Glas Trust and Aditya Birla Finance from the CoC. Instead, the tribunal restored the CoC to its previous composition as of August 21, 2023, reinstating Aditya Birla Finance as a financial creditor of Think & Learn, the parent company of Byju’s. It also overturned Srivastava’s decision to reclassify Glas Trust and Aditya Birla Finance as operational creditors.
“The Applicant No. 1, Aditya Birla Finance Limited, is hereby restored to the status of a Financial Creditor, with all attendant rights, privileges, and obligations, as envisaged under the Code. The letter dated September 5, 2024, re-classifying Applicant No. 1 as an Operational Creditor, is set aside,” the NCLT stated in its order.
Additionally, the tribunal nullified the resolution passed by the reconstituted CoC on September 3, 2024, which had appointed the Interim Resolution Professional as the Resolution Professional.
