/dq/media/media_files/2025/02/04/OxUQ27SpNmCjisUlHSHt.png)
On January 29, 2025, the National Company Law Tribunal (NCLT) made an important decision about Byju's insolvency case. Byju’s has been in the news for quite some time. NCLT ruled that two major creditors, Glas Trust and Aditya Birla Finance, should be included again. Earlier, the person in charge of handling Byju's financial crisis, Pankaj Srivastava, had removed them from the Committee of Creditors (CoC), which oversees the insolvency process.
What will happen with Byju's from now on?
-
New Committee of Creditors (CoC):
The NCLT has ordered the formation of a new group of creditors. The group includes Glas Trust and Aditya Birla Finance. This group will now have the power to make key decisions about Byju's insolvency process. Byju’s will further face scrutiny and a severe financial strain. -
Resolution Plan Development:
A plan to resolve Byju’s financial issues will be created within the next three months. If no solution is found within this time, the company may have to shut down and sell its assets (liquidation). There will be no escape for Byju’s anymore. -
Legal Challenges:
Byju's is also facing legal troubles in both India and the U.S. These involve loan repayments and following court orders. This will further complicate the resolution process. -
New Resolution Professional (RP):
The new CoC will appoint a different person to handle the insolvency process, replacing Pankaj Srivastava. Pankaj Srivastava’s actions have caused this decision. This new RP will oversee the entire process and work on finding a solution. It has been hindering on for a very long time now.
Byju's: Latest Details
Two important creditors, Glas Trust (owed ₹11,000 crore) and Aditya Birla Finance (owed ₹47 crore), will now be included in Byju’s insolvency process. NCLT has ruled it. This is important because they have a big financial stake in the company. And NCLT is of the belief that Glas Trust and Aditya Birla Finance should be included again.
The tribunal's conclusions were damaging.
-
Aditya Birla Finance was wrongly classified by the RP as an operational creditor rather than a financial creditor, it was held.
-
Without any valid reason, Glas Trust was excluded from the CoC.
-
Violated statutory deadlines for CoC meetings; submitted false applications to the tribunal and backdated papers.
Action Against Resolution Professional: Byju’s
The NCLT has also taken action against Pankaj Srivastava. An action has been taken by the NCLT for removing Glas Trust and Aditya Birla Finance (Byju’s creditors) without a valid reason. The tribunal found that he went beyond his authority by changing creditor classifications and not following legal deadlines. This action raises concerns about his intentions. This can go against Byju’s as Byju’s is already facing a major crisis. It was one of the best edtechs in India once upon a time.
Two reasons were given by Srivastava for their dismissal: he categorized Aditya Birla Finance as a "operational creditor" and considered Glas Trust's claims to be "contingent" because of pending litigation in US courts. But according to the NCLT, the RP had no jurisdiction over these exclusions.
According to bankruptcy expert Vivek Parti, who spoke to Business Today, the RP is not responsible for this since they can only verify claims, not make decisions. "The RP attempted to exercise judicial discretion, which is outside of his mandate, based on the NCLT's strong observations."
With these creditors back in the process, Byju’s will face more scrutiny. This is bound to happen as there will be more cross questioning about the funds. This may slow down the resolution process and put additional financial strain on the company. Byju’s is certainly not in a position to further face a financial strain.
The NCLT’s decision ensures that important creditors are included, making the insolvency process more fair and transparent. Byju’s is in a tough situation, but with Glas Trust and Aditya Birla Finance now involved, a solution may be within reach. Byju’s will have to go through this and maybe it emerges stronger. However, the next two weeks are crucial, as all parties will try to work together to find a way forward and bring some stability to the company’s future.