NCLT reserves ruling on Byju’s creditor appeals, BCCI insolvency petition

The National Company Law Tribunal (NCLT) on Wednesday, reserved its order on the appeals by Glas Trust and Aditya Birla Finance to be added to the committee of creditors (CoC), as well as the Board of Control for Cricket in India’s (BCCI) application to withdraw its insolvency petition against the cash-strapped edtech firm Byju’s.The matter revolves around Glas Trust and Aditya Birla Finance, which were originally part of Byju’s CoC, but were removed from the list when Byju’s insolvency resolution professional (RP) Pankaj Srivastava reconstituted the CoC.

Srivastava, who was present in the tribunal, said that the CoC was formed provisionally due to pressure from Glas Trust to establish the CoC after the Supreme Court passed the order.

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

The bench questioned the RP’s assertion of being under pressure, by asking whether the RP is so vulnerable that it could be easily influenced by others.

“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,” the bench said.

Earlier the counsel for the RP had argued that Glas Trust’s claim to be included in the CoC was contested because of a pending New York court case regarding the term loan B. However, senior advocate Srinivasa Raghavan, representing Glas Trust, argued that the RP was well aware of these cases before the initial constitution of the CoC. The counsel for Glas Trust reiterated that once the CoC is formed, the RP does not have the authority to reconstitute it, as that power rests with the NCLT. “We must be inducted into the CoC, and the CoC must be reconstituted,” the counsel said.

Pramod Nair representing Aditya Birla argued that the IRP can revise the amount but not the status of the committee.

“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 your Lordships for this purpose, which has not happened at all,” said Nair.

On November 18, Byju’s RP had requested the NCLT to consider BCCI’s application to withdraw its petition. On December 2, ET reported that Glas Trust sought rejection of the BCCI’s application to withdraw its insolvency petition against the edtech firm questioning the maintainability of the application.

Glas Trust argued that the withdrawal application should be presented to the CoC first, followed by a 90% vote, and only then should it be brought before the tribunal. The RP’s counsel said that the application was initially filed by the BCCI before the CoC was formed and hence the voting is not required.