“One IA (interlocutory application) was filed to inform us about the initial constitution of the CoC, and that is still not listed because the RP has refused to rectify the objections we raised (in August),” said the bench, questioning why the RP removed Glas Trust, which represents a group of US entities that lent $1.2 billion to Byju’s, and Aditya Birla from the CoC.
“You filed this copy (CoC intimation) on August 24, and objections were raised on August 28. What have you done since August 28?” the bench asked, while also directing the RP to address the objections related to the CoC by Thursday.
The counsel representing the RP argued that the CoC was formed on a provisional basis owing to the pressure to establish the CoC after the Supreme Court passed the order.
“The same was communicated to all the financial creditors, informing them that we are provisionally admitting their claims for the purpose of forming the CoC and that we will continue to review their documents,” the counsel said while highlighting that the verification had not been done.
Aditya Sondhi, representing the RP, said that Glas Trust’s claim was contested because of a pending New York court case regarding the term loan B. The bench then questioned whether the RP had the authority to reconstitute the CoC based on pending matters.
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“It is only a disqualification notice which is yet to be decided by the New York court. How can the RP decide on that? the bench said. If a creditor’s claim amount is uncertain due to contingencies or other factors, the IRP or RP has the power to revise it, and the reconstitution of the CoC follows as a result of that revision, Sondhi said.
Glas Trust and Aditya Birla argued that the RP can revise the amount but not the status of the committee.
“Their plan is very clear. They want to avoid the CoC because it must be formed according to the original constitution. It has been illegally reconstituted by excluding us. They know that if a withdrawal application is to be filed, it must go before the CoC, which should include Glas, Aditya Birla, and others. Now, they are attempting to move the application without the CoC by making an application that is not maintainable at all,” said senior advocate Srinivasa Raghavan, representing Glas Trust.
On December 2, ET reported that Glas Trust sought rejection of the Board of Control for Cricket in India’s application to withdraw its insolvency petition against the cash-strapped edtech firm. Sondhi again argued that the cricket board had filed the withdrawal application before the CoC was formed and hence should be considered. Raghavan said that even if the CoC was not constituted, the application was never placed before the tribunal.
In the case of Aakash Institute, the bench had sought clarification on who represented Byju’s parent company Think & Learn at Aakash’s October board meeting.
The RP said that a communication was sent in July to Aakash Institute and Byju’s, revoking all previous authorizations, giving the RP sole authority to represent. However, the minutes of the meeting showed Byju’s founder Byju Raveendran attended via video call, and he should be questioned, the council said. Since Byju’s is undergoing insolvency proceedings, Raveendran is prohibited from attending the meeting.
“It is surprising that the minutes of a meeting held on October 21 are still not available to the RP, even after one month, despite the RP being in charge of the company… clearly, the RP is not functioning properly. And then, you also allow the EGM (extraordinary general meeting) to proceed,” the bench said.
On November 20, NCLT refrained Aakash Institute from amending its articles of association which sought to remove the rights of the minority shareholders.
Also Read: Byju’s US lenders ask NCLT to reject BCCI plea to withdraw insolvency petition
