New Delhi, India – On July 16, the National Company Law Tribunal (NCLT) admitted Byju’s parent company, Think and Learn Pvt Ltd, to the insolvency resolution process following a plea by the Board of Control for Cricket in India (BCCI).
The tribunal has appointed Pankaj Srivastava as the interim resolution professional (IRP) to oversee the company until the lenders form a Committee of Creditors (CoC). “The Interim Resolution Professional shall, after collation of all the claims received against Think and Learn Pvt Ltd, the Corporate Debtor, and the determination of the financial position of the Corporate Debtor, constitute a Committee of Creditors,” the order stated.
The NCLT dismissed Byju’s request to refer the dispute to arbitration, ruling that the petition filed under section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, by the BCCI to initiate a Corporate Insolvency Resolution Process (CIRP) was justified. The tribunal determined that the existence of debt and default in payment was established.
As per the IBC, control of the company will now shift from the current management to its creditors. No assets of Byju’s can be transferred while the company is in CIRP. The IBC also prohibits initiating or pursuing any legal actions against Byju’s during this period. The company is under moratorium, meaning all debts and interest on debts will remain frozen until lifted by the NCLT through an order.
The CoC will manage the company through the IRP for a maximum of 330 days. If the CoC can sell the company to an interested party through a bidding process, the company could be revived. However, if no buyer is found within 330 days, the NCLT will order the company’s liquidation.
Byju’s founder, Byju Raveendran, or any board member can appeal this order in the National Company Law Appellate Tribunal (NCLAT) and subsequently in the Supreme Court. However, lifting the CIRP is at the court’s discretion.
The case, filed by the BCCI on September 8, 2023, was first heard on November 28 of the same year. During the initial hearing, the NCLT issued a notice to Byju’s and sought a response. According to the order from November 2023, the BCCI claimed that Byju’s had defaulted on a payment of Rs 158 crore. “It is stated that the general notice was issued to Byju’s via email dated 06.01.2023 and the default amount of Rs 158 crore, excluding TDS as reflected,” the NCLT order from November read.
