Byju's: BCCI and Riju Ravindran contest NCLT order on edtech's insolvency resolution

The Board of Control for Cricket in India (BCCI) and Riju Ravindran, co-founder of Byju's, have contested a National Company Law Tribunal (NCLT) order concerning the insolvency resolution of the edtech firm. This dispute, centred on a Rs 158-crore sponsorship deal settlement, arises from the NCLT's directive to the Committee of Creditors (CoC) to decide on the application, despite the agreement being made prior to the CoC's formation. 

Senior advocate CK Nandakumar, representing the BCCI, argued before the National Company Law Appellate Tribunal (NCLAT) that the decision should not have been delegated to the creditors, given the timing of the settlement, the Economic Times reported.

The BCCI initiated insolvency proceedings against Byju's last year to recover the amount owed from a sponsorship contract. An initial settlement was approved by the NCLAT last August after Ravindran agreed to fulfil the financial obligation. However, this settlement was overturned by a higher court in October, complicating the resolution process. 

The NCLT's recent decision to involve the CoC, which includes Glas Trust, Aditya Birla Finance, Incred Financial Services, and ICICI Bank as financial creditors, has led to further legal contention. Nandakumar pointed out that the settlement occurred "at a time when there was no controversy," only to be complicated by subsequent legal developments.

Ravindran's counsel, senior advocate Arun Kathpalia, criticised the interim resolution professional (IRP) Pankaj Srivastava for failing to submit the application to the NCLT in a timely manner, prior to the CoC's formation. 

Kathpalia contended that the IRP's oversight led to the current predicament where the CoC's decision-making authority is being questioned. Glas Trust, representing Byju's US lenders, maintains that the CoC's involvement is necessary, asserting that BCCI intended to bypass the tribunal. 

Kapil Sibal, representing Glas Trust, stated: "CoC stands constituted. All decisions will be taken by the CoC. Any application has to be decided by the CoC… Promoters have no role at that stage." This underscores the procedural complexities of the case and the varying interpretations of creditor rights.

Adding to this intricate legal discourse, Nandakumar highlighted the procedural missteps, emphasising that "multiple orders from different courts and tribunals" have altered the context in which the original settlement was reached. He argued that the rights of Glas Trust were preserved at their request, complicating the settlement's execution and disrupting the intended resolution process. This highlights an ongoing debate over jurisdictional authority and the appropriate sequence of legal procedures in insolvency cases. The case exemplifies the challenges faced by entities embroiled in multi-layered legal environments, where overlapping jurisdictions can impact decision-making processes.

Despite these complexities, the insistence on procedural integrity remains central to the ongoing legal battle. Nandakumar's stance, as quoted, "I had written in that letter, saying that it is subject to the outcome of the petition and the appeal being allowed, and that please don't file it when the Honourable Supreme Court is seized of the matter," reflects a concern for ensuring that judicial processes are respected and not prematurely circumvented. As the case continues, it reflects broader challenges in India's corporate bankruptcy landscape, where legal clarity and creditor rights are often in tension, influencing the outcomes of high-stakes financial disputes.