NCLT asks BCCI to seek creditors’ nod for ₹158 crore Byju’s settlement

The Bengaluru insolvency court on Monday directed the Board of Control for Cricket in India (BCCI) to submit a ₹158 crore settlement plea before the Committee of Creditors (CoC) to obtain approval for its settlement with bankrupt edtech firm Byju’s in order to facilitate the company’s exit from insolvency.

This decision follows a 7 February order from the National Company Law Appellate Tribunal (NCLAT), which instructed the National Company Law Tribunal (NCLT) to decide on BCCI’s plea within 10 days.

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Byju’s sought a settlement after its suspended management cleared the ₹158 crore dues—an amount owed under a sponsorship agreement with the BCCI.

While the NCLT has now permitted the plea, it ruled that BCCI must first seek CoC approval as mandated by the Insolvency and Bankruptcy Code (IBC). Under Section 12A of the IBC, an insolvency withdrawal requires a 90% voting approval from the CoC.

If the CoC approves the settlement, it must then be referred to the NCLT for final clearance.

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However, the settlement plea must be submitted through the resolution professional (RP).

Byju’s RP status remains uncertain after the NCLT, in its 29 January order, directed disciplinary action against current RP Pankaj Srivastava. The tribunal also instructed him to convene a CoC meeting to appoint a new RP, with a reconstituted CoC consisting of Aditya Birla Finance Ltd and Glas Trust Llc as financial creditors.

Currently, Glas Trust dominates the CoC, holding a 99.41% voting share due to its ₹11,432 crore claim. Other creditors include Aditya Birla Finance with a ₹47 crore claim (0.41% voting share) and Incred Financial Services Ltd with a ₹20 crore claim (0.18% voting share). ICICI Bank Ltd has no verified claims or voting rights.

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Glas Trust and other lenders oppose the settlement, arguing that the ₹158 crore paid to BCCI is “tainted” and should be allocated to financial creditors instead. They have also cited ongoing Enforcement Directorate (ED) investigations into Byju’s financial transactions as a reason to reject the deal.

If the CoC approves the settlement, Byju’s could exit insolvency, restoring control to founder Byju Raveendran. However, until approval is secured, the company remains under insolvency proceedings, keeping control out of Raveendran brothers. 

The detailed order copy is awaited. 

Byju’s insolvency timeline

Byju’s insolvency proceedings began on 16 June 2024, after the company defaulted on a ₹158 crore payment to BCCI under a sponsorship agreement. The edtech firm had secured jersey sponsorship rights for the Indian cricket team in 2019, extending the contract until November 2023. 

However, financial struggles led to missed payments, prompting BCCI to initiate insolvency proceedings.

Both parties later sought a court-approved settlement, but the NCLT did not issue an order, forcing Byju’s to escalate the matter to the NCLAT in Chennai.

On 2 August 2024, the NCLAT dismissed Byju’s insolvency case and approved BCCI’s settlement after Byju’s co-founder Riju Raveendran raised ₹158 crore to clear the dues. This temporarily restored his family’s control over Byju’s operations.

However, Glas Trust challenged the settlement in the Supreme Court, arguing that the funds should be allocated to financial creditors rather than BCCI.

On 23 October 2024, the Supreme Court quashed the NCLAT order, ruling that it bypassed due process under the IBC. The court directed both parties to return to the NCLT for fresh proceedings.

The rise and fall of Byju’s

Byju Raveendran currently resides in Dubai, while his brother Riju is based in London.

Founded in 2011 by Byju Raveendran and Divya Gokulnath, Byju’s became India’s most valuable edtech startup, achieving unicorn status and attracting global investors. However, its aggressive expansion led to financial strain, regulatory scrutiny, and mounting disputes with creditors—marking a dramatic downfall for what was once India’s most celebrated startup.