NCLT accepts Byju’s insolvency plea but denies the firm’s request for arbitration
Edtech company placed on moratorium following tribunal’s finding that it had neglected to pay dues to BCCI
On a motion by the Board of Control for Cricket in India (BCCI), the National Company Law Tribunal (NCLT) on Tuesday admitted parent company Think and Learn, an edtech business, to insolvency.
Pankaj Srivastava was chosen by the tribunal to serve as the professional for temporary resolution. It was discovered that Byju’s had fallen behind on a bill owed to the BCCI over the sponsorship of the Indian cricket team’s jersey.
Byju’s stated that it is trying to reach an agreement with BCCI.
“As we have always stated, we hope to settle amicably with BCCI, and we are optimistic that this decision will not prevent a settlement from being reached. A representative for Byju stated, “While we review the order, our lawyers will take the appropriate action to safeguard the Company’s interests.”
There are currently no legal actions for recovery, enforcement of the security interest, asset sale or transfer, or termination of important contracts for Byju’s. Contracts may be established or renewed.
The NCLT denied Byju’s request to have the case sent to arbitration.
The Hon’ble Apex Court made it very plain that the adjudicating authority could not assume a third choice and could only reject or admit the application. The NCLT stated that as the Order delivered today admitted the application under Section 9 of the IBC, the application to send the subject to arbitration is not maintainable.
In light of this, the Adjudicating Authority (NCLT) believes that there is no basis for rejecting the Operational Creditor’s petition to begin the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor under section 9 of the Insolvency and Bankruptcy Code, 2016 because it is evident that a debt exists and that the Debtor has defaulted on its payment. Consequently, a moratorium is declared in accordance with Section 14 of the Code, and the instant Company Petition bearing CP (IB) No. 149/2023 is admitted against the Corporate Debtor,” the judgment said.
Byju’s took over as the Indian cricket team’s shirt sponsor in 2019 after mobile phone maker OPPO was ousted from the sponsorship deal between BCCI and Byju’s. This deal was reportedly originally scheduled to expire in 2022 but was subsequently extended to include 2023.
Nevertheless, Byju’s declared at the beginning of 2023 that it will not be extending its sponsorship agreement with the BCCI or its other affiliations with the Fédération Internationale de Football Association (FIFA) and the International Cricket Council (ICC).
Later on in the year, BCCI submitted a plea to Byju’s to start the insolvency procedure.
