NCLT orders initiation of disciplinary proceedings against Byju's Resolution Professional

The National Company Law Tribunal (NCLT) on Wednesday called for the initiation of disciplinary proceedings against Pankaj Srivastava, the Resolution Professional (RP) of debt-ridded ed-tech company Byju's..A Bench comprising judicial member K Biswal and technical member Ravichandran Ramaswamy passed the order while setting aside the RP's decision to exclude Glas Trust and Aditya Birla Finance from the Committee of Creditors (CoC) constituted to oversee the insolvency resolution process in respect of Byju's..The Bench said that the actions and decisions taken by the IRP were prejudicial to the interests of the Corporate Insolvency Resolution Process (CIRP) and to the stakeholders. Further, the tribunal found that the conduct of IRP was not fit and proper or as expected from an officer of the tribunal. Thus, it ordered the Insolvency and Bankruptcy Board of India (IBBI) to initiate a disciplinary enquiry against the RP."The conduct of the IRP in the present case has been filed with the intent to mislead the tribunal ...The above conduct on part of IRP needs to be dealt by way of disciplinary proceeding by the IBBI. Hence, the IBBI may conduct the necessary investigation in this matter," it ordered. .The tribunal further directed that the RP be removed and the newly constituted CoC, comprising Glas Trust and Aditya Birla finance, take a call on appointing a new RP. The NCLT has also quashed all the decisions made by the RP with the former CoC..The tribunal has, however, not yet ruled on the application by the Board of Control for Cricket in India (BCCI) to settle its dispute with Byju's.The Supreme Court on October 23 had allowed an appeal filed by US-based financial creditor Glas Trust challenging the National Company Law Appellate Tribunal (NCLAT) decision to halt insolvency proceedings initiated against Think & Learn, the parent company of Byju’s.The judgment set aside the NCLAT order which accepted a settlement between Byju Raveendran and the BCCI, on whose plea the NCLT Bengaluru in July had admitted Byju's to the insolvency process. By its October ordere, the apex court remitted the matter back to NCLT to consider the application for settlement afresh. .Subsequently, Glas Trust and Aditya Birla Finance moved applications before the NCLT contending that the RP had recognized only one financial creditor, resulting in a Committee of Creditors (CoC) composed of a single entity with 100 per cent voting rights.The CoC, which makes key decisions in a company’s insolvency resolution, consists solely of financial creditors, while operational creditors do not have voting rights in its meetings.According to sources, a creditor who initially held just 0.2 per cent of voting rights in the CoC was given complete control after the RP disqualified Glas Trust and Aditya Birla Finance from the financial creditors’ list..Meanwhile, the BCCI argued that their application under Section 12A of the Insolvency and Bankruptcy Code (IBC) for withdrawal of the proceedings, must be heard first.It contended that if the application for withdrawal were to be allowed, the other pleas filed by the creditors would not stand. In other words, the BCCI has contended that if the settlement between it and the former management of Byju's is accepted, the order admitting the company to insolvency would go. BCCI's counsel, Senior Advocate CK Nandakumar further told the tribunal that the application for withdrawal will be filed shortly.Senior Advocate KG Raghavan, appearing for Riju Raveendran (brother of Byju Raveendran), added that the Supreme Court's direction was for the NCLT to hear the application for settlement between BCCI and the former management of Byju's.Senior Advocate Dhyan Chinappa appeared for Byju Raveendran and sought a copy of the application seeking removal of RP. He said that some allegations have been made about Byju as well..Glas Trust was represented by Senior Advocate Uday Holla with Advocate Tejas Shetty from Khaitan & Co.Senior Advocate Pramod Nair, along with Advocates Ahaan Mohan and Aishwarya Mahadev of AMM & Associates, appeared for Aditya Birla Finance. Nikhil Rodrigues, Head of Litigation for the company, was also present.The RP was represented by Senior Advocates Ramji Srinivasan and Aditya Sondhi along with Gandhi Law Associates partner advocate Raheel Patel and advocate Prateek Rath.