NCLAT Rejects Byju's Settlement Request, Confirms Insolvency Status

Synopsis

The NCLAT has rejected Byju's request to withdraw insolvency proceedings, affirming that a settlement proposal must be approved by the Committee of Creditors. This follows a complex legal battle involving significant financial claims and lawsuits against Byju’s leadership.

Key Takeaways

NCLAT ruled against Byju's settlement plea
Insolvency proceedings upheld
BCCI's claim as operational creditor acknowledged
Byju’s Alpha filed lawsuit over funds
Legal challenges continue in the case

Chennai, April 18 (NationPress) The National Company Law Appellate Tribunal (NCLAT) has dismissed the appeals made by the BCCI and Riju Raveendran, brother of Byju Raveendran, which sought to withdraw the insolvency proceedings against Byju's and to evaluate the settlement between the struggling edtech firm and the BCCI.

They contested the ruling made by the Bengaluru bench of the National Company Law Tribunal (NCLT), which on February 10, 2025 instructed that their settlement proposal be submitted to the new Committee of Creditors (CoC), which includes Glas Trust, a trustee for lenders to whom Byju's owes $1.2 billion.

The Chennai bench of the NCLAT upheld the NCLT's directives, stating that the settlement proposal was submitted after the formation of the CoC, thus requiring the approval of the lenders' body as per Section 12 A of the Insolvency & Bankruptcy Code.

The Corporate Insolvency Resolution Process (CIRP) against Byju's commenced on July 16, 2024, with the NCLAT admitting a Rs 158.90 crore claim from the BCCI as an operational creditor of the edtech giant. An IRP was also appointed by the NCLT for this case.

Later, a settlement was achieved between the involved parties, leading Byju Raveendran to appeal to the NCLAT.

On August 2, 2024, the appellate tribunal had previously set aside the insolvency proceedings against Byju's, approving a settlement of dues with the BCCI, which had entered into a Team Sponsor Agreement with the cricket organization in 2019.

This decision was contested by Glas Trust in the Supreme Court. Glas Trust, a financial creditor, also lodged a separate petition with the NCLT for the resolution of its debt amounting to $984.3 million.

Meanwhile, Byju’s Alpha, a special-purpose financing entity created by Byju’s in the US to manage proceeds from a $1.5 billion Term Loan B, recently filed a lawsuit against Byju Raveendran, his co-founder, and his wife Divya Gokulnath for allegedly orchestrating the theft of $533 million.

According to Byju’s Alpha, following a $533 million ruling from the United States Bankruptcy Court for the District of Delaware against Riju Raveendran and Byju’s ultimate corporate parent in India, the company has initiated legal action against Byju Raveendran, his co-founder, his wife Divya Gokulnath, and his advisor Anita Kishore.

The lawsuit claims that each of them conspired to conceal and misappropriate $533 million of loan proceeds (the ‘Alpha Funds’), according to a press release.

They further asserted that it is evident that Byju, Divya, and Anita intentionally obscured the assets of BYJU’s Alpha and were repeatedly misleading regarding the whereabouts of the funds to unlawfully seize money owed to the lenders.