Glas Trust, which represents a group of US entities that lent $1.2 billion to beleaguered edtech firm Byju’s, on Monday questioned the maintainability of the withdrawal application for the insolvency petition filed by the Board of Control for Cricket in India (BCCI’s) against the company.
Glas Trust argued in the National Company Law Tribunal (NCLT) that the application should be rejected. It stated that the application, which the resolution professional (RP) claims the BCCI filed before the committee of creditors (CoC) was formed, should have been submitted by the interim resolution professional (IRP), not the RP, according to proper procedure.
“A stage where the COC is not yet constituted, the IRP continues to be in operation. Therefore, at that stage, an application must be made by the IRP. The first submission is that the present application is not by an IRP. The person is claiming to be an RP. Therefore, the question of making an application under stage two, as mentioned by the Supreme Court or under the first provision of regulation 30A, does not arise,” said senior advocate Srinivasa Raghavan, representing Glas Trust.
On November 18, Byju’s resolution professional had requested the NCLT to consider the withdrawal application filed by the BCCI before the tribunal.
Glas Trust’s counsel further argued that this stage is no longer relevant since the CoC has already been formed. He noted that even if the CoC had not been constituted, the application was never placed before the tribunal.
“The Supreme Court says that first, it should be placed before the CoC, followed by 90% voting, and only then can it be presented before the tribunal. Even if the CoC has resolved, the tribunal will still examine it, as the CoC’s decision is not binding on the tribunal,” Raghavan said.
“What the RP is trying to do is ask the court to virtually reverse the whole process, as if the CoC does not exist, go back and act contrary to the Supreme Court judgment, and ignore the CoC,” he added.
In the last hearing on November 19, counsel for the RP had requested the bench to prioritise the withdrawal of insolvency petition saying that the decision-making body is NCLT and not CoC.
“Even though the RP was appointed, the settlement happened before the constitution of the CoC and hence the tribunal should prioritise the withdrawal application before it delves into other issues,” the RP’s counsel had said earlier.
Regarding the source of funds which was used to settle its Rs 158 crore payment arrears with the Indian cricket board, the bench said the NCLT cannot give any findings on this matter, as it falls outside its jurisdiction.
