[Byju's Insolvency] RP has created absolute chaos: Creditors to NCLT

The insolvency case concerning edtech platform Byjus witnessed spirited arguments on Tuesday with US based financial creditor Glas Trust telling the National Company Law Tribunal (NCLT) at Bengaluru that the Resolution Professional (RP) appointed in the matter has caused chaos. .Senior Advocate Uday Holla, who appeared for Glas Trust, urged the NCLT to hear their application for removal of the RP and reconstitution of the Committee of Creditors (CoC)."The RP has created absolute confusion and chaos. He issues notice to some creditors, classifying them as financial creditor and cancels the decision," Holla claimed.The argument was supported by other creditors as well.The Supreme Court had on October 23 allowed the appeal filed by Glas Trust challenging the National Company Law Appellate Tribunal (NCLAT) decision to halt insolvency proceedings initiated against Think & Learn, the parent company of Byju’s. The judgment set aside the NCLAT order which accepted the settlement between Byju Raveendran and the Board of Control For Cricket in India (BCCI), on whose plea the NCLT Bengaluru in July admitted Byju's to the the insolvency process.Subsequently, on October 30, the Karnataka High Court barred the CoC of Byju's parent company Think and Learn from meeting and taking decisions on the company's affairs till the NCLT decides on the applications to remove the company's RP.The High Court further directed the NCLT to consider the applications filed by Glas Trust in two weeks.When the NCLT heard the case today, Senior advocate Promod Nair, who appeared for Aditya Birla Finance, agreed with Glas Trust and urged the NCLT to consider their applications seeking removal of the RP. The creditors further submitted that the RP has accepted just one party as financial creditor. Sources close to the development told Bar & Bench that the creditor who initially had 0.2% voting rights in the CoC now has 100% voting rights due to the RP's disqualification of Glas Trust and Aditya Birla Finance.However, Senior Advocate CK Nandakumar, who appeared for BCCI, told the NCLT that their application under Section 12A of the Insolvency and Bankruptcy Code (IBC) for withdrawal of the proceedings, must be heard first. He reasoned that if the application for withdrawal is decided, the other pleas filed by the creditors would not stand ground. That is, if the settlement between BCCI and the former management of Byju's is accepted, the order admitting the company to insolvency would go. Nandakumar further told the court that the application for withdrawal will be filed shortly.Senior advocate KG Raghavan, appearing for Riju Raveendran (brother of Byju Raveendran), added that the Supreme Court's direction was for the NCLT to hear the application for settlement between BCCI and the former management of Byju's. Senior advocate Dhyan Chinappa appeared for Byju Raveendran and sought a copy of the application seeking removal of RP. He said that some allegations have been made about Byju as well. .However, Holla maintained that the other creditors must also be heard when an application for settlement is filed. It was pointed out that the Supreme Court had held that once the insolvency is initiated, the proceedings against the company are no longer restricted to an applicant or a petitioner but become collective proceedings, where all creditors of a company become necessary stakeholders. Raghavan told the NCLT that they had no objection to the other creditors being heard in the case. The NCLT bench comprising K Biswal and Technical Member Manoj Kumar Dubey then agreed to list the pleas on November 18.Advocates Ahaan Mohan and Aiyshwarya Mahadev from law firm AMM & Associates appeared for Aditya Birla Finance.Advocate Tejas Shetty from Khaitan & Co appeared for Glas Trust.