NCLT asks US lenders of edtech company Byju's to file fresh appeal

This means that the US term loan lenders will not be party to the discussion of the CoC

The National Company Law Tribunal (NCLT) on Wednesday deferred hearing on a plea filed by the Glas Trust, seeking a stay on the proceedings of the committee of creditors (CoC) from which it has been expelled, saying the US group representing Byju's lenders can file a separate application if the matter doesn’t come up for hearing in the Supreme Court in a week. 

The Bengaluru bench of the NCLT said that it cannot stop the proceedings of CoC as the go-ahead for its constitution and for conducting the meetings were given by the Supreme Court.

However, the NCLT bench said that the lender can file a separate application for pursuing the matter if the case doesn’t come before the apex court till September 11.

The US lenders of Byju’s represented by Glas Trust in a letter claimed that the interim resolution professional (IRP) has removed the lenders from the CoC, in an unlawful action, said the email from Glas Trust.

Pankaj Srivsatava, the IRP, removed Glas Trust from the CoC, claiming that they do not represent the minimum 51 per cent of lenders in the consortium, said sources in the know.

Attempts to connect with Srivastava failed.

In a statement the lenders association represented by Glas Trust said, “Pankaj Srivastava’s action are unprecedented and entirely illegitimate as no interim resolution professional in the history of the Insolvency and Bankruptcy Code of India has ever attempted to unlawfully strip financial creditors of claims of this magnitude.”

The insolvency proceeding against Byju’s started last month as the Supreme Court rejected the NCLAT’s ruling that quashed bankruptcy proceedings against Byju’s. It also approved a Rs 159 crore settlement between Byju’s and the Board of Control for Cricket in India (BCCI).

US lenders in an email on the disqualification said, “The issue of disqualification does not in any way undermine GLAS Trust’s claim against Think & Learn or change Think & Learn’s financial obligations under its guarantee — all of which Pankaj presumably recognised when he originally admitted GLAS Trust into the CoC. Pankaj’s eleventh-hour pretextual arguments to the contrary should be seen for what they are: a clear intent to fraudulently disenfranchise GLAS Trust and the Lenders from the CoC.”