Byju's: NCLAT dismisses appeals by BCCI, Riju Raveendran against NCLT order on settlement

The National Company Law Appellate Tribunal (NCLAT) at Chennai on Thursday dismissed appeals by Riju Raveendran and the Board of Control for Cricket in India (BCCI) challenging an NCLT Bengaluru order that directed BCCI to withdraw its insolvency plea against Byju’s and place its settlement proposal before the Committee of Creditors (CoC) of the edtech entity's parent company..A coram of Justice Rakesh Kumar Jain (Judicial Member) and Technical Member Jatindranath Swain held that the Corporate Insolvency Resolution Process (CIRP) withdrawal application was filed after the constitution of the CoC and hence required CoC approval under Section 12A of the Insolvency and Bankruptcy Code (IBC).“Form FA, admittedly having been filed on 14.11.2024, is post CoC....If the application under Section 12A is filed under Regulation 30A(1)(a) before the constitution of CoC then Section 12A which mandates the approval of such application for withdrawal by 90% voting share of the CoC shall not apply but if the application is filed after the constitution of the CoC then the provisions of Section 12A shall apply with full force.”.The insolvency case began when BCCI filed a petition under Section 9 IBC against Byju's for resolution of debt amounting to ₹158.90 crore. The NCLT admitted this application on July 16, 2024.Byju's settled with BCCI and the settlement was approved by NCLAT in July 2024. However, the Supreme Court on October 23 had allowed an appeal filed by US-based financial creditor Glas Trust challenging the NCLAT decision to halt insolvency proceedings initiated against Think & Learn, basis the settlement. The apex court had asked BCCI to approach NCLT for the settlement.Although BCCI submitted Form FA (application for withdrawal) to the Interim Resolution Professional (IRP) on August 16, 2024, it specifically instructed the IRP to file the same only after the resolution of an appeal pending before the Supreme Court. The CoC was constituted on August 21, 2024 and the IRP eventually filed the withdrawal application on November 14, 2024."We also do not agree with the Appellant on the issue that the IRP had erred in not submitting the application for withdrawal within three days as stipulated in Regulation 30A(3) because of the fact that the Appellant himself had directed/asked the RP to file form FA only after the dismissal of the appeal," the NCLAT observed..The primary contention before NCLAT was whether the withdrawal application dated August 16, 2024 should be treated as having been filed before the CoC was constituted, and thus governed by Regulation 30A(1)(a), which does not require CoC approval.The appellants argued that the settlement was arrived at between the parties before the CoC was constituted and Form FA was also submitted to the IRP to be filed before NCLT on August 16. Therefore, the right of the appellant cannot be defeated if Form FA is filed after the constitution of the CoC.However, the Appellate Tribunal held that the date of filing before the Adjudicating Authority, not the date of submission to the IRP, determines applicability.“We do not agree with the contention of the Appellant... because when the order of the Hon’ble Supreme Court was passed on 23.10.2024, the CoC had already been constituted on 21.08.2024 whereas the application Form FA was filed on 14.11.2024 much thereafter.”It also rejected claims that the IRP delayed the application’s filing in violation of Regulation 30A(3) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.“Even if the IRP had erred... the Appellant had the remedy to question the decision of the RP before the Tribunal by filing a miscellaneous application which he has failed to do.”.Riju Raveendran argued that he was not heard on his impleadment application before the NCLT. However, the Tribunal noted:“The Appellant was present throughout the hearing of the withdrawal application... the present appeal has been filed by the same applicant who has raised all the issues available to him before this Court.”.Riju Raveendran was represented by Senior Advocates Arun Kathpalia and Abhijeet Sinha with Advocates Adarsh Ramanujan, Ananya Ghosh, Mrinalini Mishra, Doel Bose, Priscilla Carolyn, Rishab Gupta and Diksha Gupta. .BCCI was represented by Senior Advocate CK Nandakumar with Advocates Ann Pereira, Bhavya Mohan and Anjali Kutiyal..Aditya Birla Finance was represented by Senior Advocate Vijay Narayan, with Advocates Sneha Parthasarathy, Abishek Jenasenan, Aparajitha Vishwanath and Ahaan Mohan..Glas Trust was represented by Senior Advocates Kapil Sibal and Krishnendu Datta with Advocates Prateek Kumar, Raveena Rai, Moha Paranjpe and Siddhant Grover..Byju's RP Shailendra Ajmera was represented by Senior Advocate Abhinav Vasisht with Advocates Savar Mahajan, Arveena Sharma, Ichchha Kalash, Samridhi Shrimali, Lakshana Viravalli, S Madhusmitha and Akshita Sachdeva Jaitly from Chandiok & Mahajan..[Read Judgment]