Tribunal defers decision on Byju’s bankruptcy plea by US lender

The National Company Law Tribunal (NCLT) has deferred its decision on a plea filed by US-based lender Glas Trust Llc seeking a stay on further meetings of the committee of creditors appointed in the Byju’s insolvency case.

A representative for Glas Trust, which has extended a $1.2-billion Term Loan B to the Bengaluru-based edtech company, was on Tuesday supposedly ousted from the committee of creditors by Byju’s insolvency resolution professional, Pankaj Srivastava. 

Srivastava has admitted Glas Trust’s claims under ‘contingent liability’. The US lender has sought the removal of the resolution professional alleging fraud.

A Bengaluru bench of the NCLT led by Justices K. Biswal and Manoj Kumar Dubey on Wednesday heard a petition by Glas Trust seeking a stay on further meetings to be conducted by the committee of creditors in the ongoing insolvency case against Byju’s. 

“We want the bench to direct that the CoC should not hold any further meetings. Ultimately, it is the question of NCLT’s power, and the (insolvency resolution professional) is seeking to annul the adjudicating authority’s power by fraudulent methods. IRP has no power to adjudicate,” Glas Trust’s counsel argued before the bench.

BCCI's plea

The tribunal had on 16 June admitted a plea by the Board of Control for Cricket in India (BCCI) to initiate a corporate insolvency resolution process against Byju’s for allegedly defaulting on dues worth Rs 158 crore. In August, the National Company Law Appellate Tribunal (NCLAT) set aside the insolvency proceedings, allowing Byju’s to settle its dues to BCCI, an operational creditor to the company. 

But Byju’s respite was shortlived. On 14 August, the Supreme Court set aside the appellate tribunal’s decision while hearing a plea filed by Glas Trust opposing the settlement to BCCI, insisting that as a financial creditor it should get priority in repayments.

Tushar Mehta, Solicitor General appearing for BCCI, opposed Glas Trust’s application on the grounds that the India cricket board had not been impleaded as a party in the matter although it had filed the original application for insolvency. 

Mehta also informed the NCLT bench that Glas Trust had supported the formation of the committee of creditors before the Supreme Court.

Next hearing on Septemberr 14

The NCLT bench clarified that a separate application must be filed by Glas Trust in the matter to make BCCI a party to the matter. The tribunal said it would take up the new plea for hearing on 11 September. 

The Supreme Court will continue its hearing in the matter on 14 October.

 (By arrangement with livemint.com)