Summary – BYJU’s Founder Challenges NCLT Bankruptcy Decision
• BYJU’s founder, Byju Raveendran, challenges the National Company Law Tribunal’s (NCLT) bankruptcy decision.
• Raveendran filed a writ case in the Karnataka High Court (HC) to revoke the NCLT verdict.
• The corporation is appealing the decision to the National Corporation Law Appellate Tribunal (NCLAT).
BYJU’s founder, Byju Raveendran, has requested the HC to suspend the NCLT order until the NCLAT addresses his appeal against the order, which has threatened the company’s existence.
The National Company Law Tribunal’s (NCLT) decision to file for bankruptcy against the edtech firm has been challenged in a new writ case filed in the Karnataka High Court (HC) by Byju Raveendran, the founder of BYJU’S, in the most recent step in the ongoing controversy.
In his petition, Raveendran asked the High Court to revoke the NCLT verdict while the corporation appeals the decision to the National corporation Law Appellate Tribunal (NCLAT).
“My appeal has been postponed until a later date by the NCLAT bench while they determine whether or not one of the judges needs to withdraw from the plea.
Senior counsel Abhishek Manu Singhvi, who is defending Raveendran, contended before the HC that if the Committee of Creditors is established in the interim, “I will be left remedial, it will become irreversible,”.
The Board of Control for Cricket in India (BCCI) filed an insolvency plea against BYJU’S earlier this month, and the Bengaluru bench of the NCLT accepted the argument and directed that the company’s corporate insolvency resolution procedure be started.
The US-based lenders of the startup were asked by the Tribunal to present their claims before the resolution specialist assigned to BYJU’S in a separate order.
The once-celebrated edtech unicorn is in danger of going bankrupt as a result of a sequence of events set off by the NCLT’s ruling to begin insolvency proceedings.
Raveendran is making his second attempt to challenge the NCLT order. The BYJU’SBYJU’S Datalabs_in-article-icon plea against the Tribunal’s order was previously denied admission by the HC.
The business then relocated the NCLAT. The creator of BYJU’S is attempting to stop the establishment of a Committee of Creditors (CoC), which would essentially take the firm away from its present management.
The legal dispute between BYJU’S and the BCCI is the result of a botched sponsorship agreement.
For more than a year, BYJU’S has been engaged in combat on several fronts. It has been battling problems like increasing losses, late filings of financial statements, a severe lack of capital, layoffs, disagreements with investors, numerous legal disputes, and bankruptcy procedures.
The edtech behemoth has been shut out of over 100 BYJU’S Tuition Centers (BTC) nationwide due to unpaid rent and power costs, according to a report published earlier this month by Inc42.
A sovereign wealth fund that owns a stake in BYJU’S, Qatar Investment Authority (QIA), has filed a request with the Karnataka High Court to force Raveendran to reveal and prevent the transfer of his personal assets. Up to $235.19 million in personal assets owned by Raveendran are being sought after by QIA.
Byju Raveendran filed a new writ suit in the Karnataka High Court on July 25. He claimed that the Chennai bench of the National Company Law Appellate Tribunal (NCLAT) had prejudiced him and asked for the order admitting Byju’s parent company, Think and Learn Private Limited (TLPL), to the insolvency resolution process to be suspended.
“The NCLAT bench has adjourned my appeal to another date to decide whether one of the judges will have to recuse from the plea,” stated senior attorney Abhishek Manu Singhvi, who represented Raveendran. I shall be left without recourse if the Committee of Creditors is established in the meantime; it will then become irreversible.”
According to Singhvi, the company stands the risk of the Committee of Creditors (CoC) taking over the case without having heard the company’s appeal if the NCLAT adjourns it again on Monday due to a member’s recusal. He stated, “This is like giving a pound of flesh to Shylock.”
As a result, he requested that the CoC be put on hold until the NCLAT had a chance to consider his appeal and provide a ruling.
CONCLUSION : BYJU founder, Byju Raveendran, has filed a writ case in the Karnataka High Court challenging the National Company Law Tribunal’s (NCLT) bankruptcy decision against the edtech firm. Raveendran seeks to revoke the NCLT verdict while the corporation appeals to the NCLAT.
