Byju’s files fresh plea before Karnataka High Court for stay on insolvency proceedings

Edtech firm Byju’s moved the Karnataka High Court on Thursday seeking a stay on the insolvency proceedings triggered by the National Company Law Tribunal (NCLT) at Bengaluru..In the petition filed through advocate Waseem Pangarkar of MZM Legal, Byjus has urged the Court to stay the insolvency resolution process as well as the formation of the Committee of Creditors (CoC) until its appeal pending before the NCLAT is heard and decided finally.On Thursday, the petition was mentioned before single-judge Justice SR Krishna Kumar..Senior Counsel Abhishek Manu Singhvi appeared for Byju Raveendran and told the Court that the NCLAT bench in Chennai had adjourned the edtech firm’s appeal to another date to decide on “whether one of the judges will have to recuse from the plea.” Singhvi referred to the report by Bar & Bench on the proceedings that transpired before NCLAT on July 23. If the Committee of Creditors is formed in the meanwhile, Byju's will be left remediless and it will become irreversible, Singhvi told the Court..On July 23, the NCLAT bench of judicial member Sharad Kumar Sharma and technical member Jatindranath Swain had adjourned the appeal filed by Think and Learn to Monday, July 29. The tribunal had asked why Think and Learn had first chosen to approach the Karnataka High Court and then withdrawn its appeal and moved the NCLAT. He had also asked what the company would do if NCLAT “refused relief on the first day itself”.The judicial member had also said at the time that he might recuse from the hearing since he had appeared for BCCI in the past..On Thursday, Singhvi brought the exchange between the petitioner company and the NCLAT to the High Court’s notice.The Senior Advocate said that if the judicial member did end up recusing from hearing the matter on Monday, then Byju's will face the threat of the Committee of Creditors taking over without having had the chance to argue its appeal.Hence, Singhvi sought a stay on formation of the Committee of Creditors till the NCLAT hears the appeal and passes an order..Justice Kumar then agreed to hear the petition tomorrow..On July 16, the NCLT Bengaluru had admitted an insolvency plea filed by the Board of Control for Cricket in India (BCCI) against Think and Learn. BCCI had filed the insolvency plea over unpaid dues related to sponsorship rights worth ₹158 crore.By admitting BCCI’s plea, the NCLT triggered the corporate insolvency resolution process under the Insolvency and Bankruptcy Code (IBC) for Think and Learn. As mandated under the IBC, NCLT then appointed a resolution professional to manage all affairs of the company in the interim..On Thursday, Singhvi told the Karnataka High Court that Byju's was a solvent company and that was in advanced settlement talks with BCCI.However, Senior advocate CK Nandakumar, who appeared for BCCI, argued that Byju’s was merely forum hunting to obtain a stay on the NCLT order..The present writ petition is the second instance when Think and Learn has moved the Karnataka High Court following the NCLT Bengaluru order. While it had previously filed and then withdrawn an appeal challenging the legal validity of the NCLT order and the insolvency proceedings triggered under the Insolvency and Bankruptcy Code, the present writ merely seeks a stay or a suspension of such insolvency proceedings until its appeal is heard and decided by the NCLAT, Chennai.