NCLT admits BYJU’S to corporate insolvency resolution process following BCCI’s plea

The National Company Law Tribunal (NCLT), in an order delivered on July 16, admitted a plea filed by the Board of Control for Cricket in India (BCCI) to initiate a corporate insolvency resolution process for Think and Learn Pvt Ltd, the parent company of BYJU’S.

“This Adjudicating Authority is of the considered opinion that there is no reason to deny the petition filed under section 9 of the IBC, 2016 by the Operational Creditor to initiate CIRP against the Corporate Debtor, since the existence of a debt and a default in the payment of debt is clearly established,” the NCLT order noted.

“Therefore, the instant Company Petition bearing CP (IB) No. 149/2023 is admitted against the Corporate Debtor and moratorium is declared in terms of Section 14 of the Code,” the order added.

Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016 allows operational creditors to initiate insolvency proceedings against a debtor for unpaid dues exceeding a specified amount.

CIRP, which stands for Corporate Insolvency Resolution Process, is a legal process under the IBC, 2016, aimed at resolving insolvency issues faced by corporate debtors in a time-bound manner, typically through restructuring or liquidation.

Restrictions under Section 14 of the IBC prevent legal actions against the financially troubled company, prohibit asset transfers, and forbid creditors from seizing collateral until resolution or liquidation as decided by the tribunal.

The NCLT bench has appointed Pankaj Srivastava as an interim resolution professional (IRP) to carry out the functions mentioned under the IBC. The IRP will carry out functions as contemplated by Section 15,17,18,19,20,21 of the IBC, as per the NCLT order.

The duties of the IRP under the above-mentioned sections of the IBC include managing the company’s affairs, overseeing its operations and assets, compiling a list of creditors, forming a Committee of Creditors (CoC), conducting CoC meetings, and providing financial updates to facilitate decisions during the insolvency resolution process.

According to the NCLT order, the IRP is tasked with collecting all claims against Think and Learn Pvt Ltd, evaluating the company’s finances, and establishing a CoC. The IRP must file a report confirming the formation of the Committee to the tribunal within thirty days of their appointment, and convene the first Committee meeting within seven days of submitting this report. Additionally, the IRP must provide bi-weekly updates on the progress of the resolution process to the tribunal.

The case against BYJU’S parent company, filed in September last year and officially registered in November, underwent multiple hearings at the NCLT. BCCI is pursuing a claim for a total outstanding amount of Rs 158.90 crore from BYJU’S, not including deducted taxes and applicable interest.

“As we have always maintained, we wish to reach an amicable settlement with BCCI and we are confident that, despite this order, a settlement can be reached. In the meantime, our lawyers are reviewing the order and will take necessary steps to protect the Company’s interests,” a BYJU’S spokesperson told YourStory.

BYJU’S sought to take the dispute to arbitration, but the NCLT has dismissed its request. “The application for referring the matter for Arbitration is not maintainable,” the order stated.

The troubled edtech firm is fighting multiple legal battles with its investors and lenders.