The Bengaluru-bench of National Company Law Tribunal (NCLT) has initiated insolvency proceedings against Think and Learn Pvt Ltd, the parent company of Byju’s, following a petition by the Board of Control for Cricket in India (BCCI). The tribunal has appointed Pankaj Srivastava as the interim resolution professional (IRP) to oversee the company’s operations until the formation of a Committee of Creditors (CoC).

The NCLT order stated, “The Interim Resolution Professional shall after collation of all the claims received against Think and Learn Pvt Ltd the Corporate Debtor and the determination of the financial position of the Corporate Debtor constitute a Committee of Creditors.”

Rejecting Byju’s request for arbitration, the NCLT found sufficient grounds to proceed with the insolvency process. The tribunal noted, “There is no reason to deny the petition filed under section 9 of the Insolvency and Bankruptcy Code (IBC), 2016 by the BCCI to initiate a Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor (Byju’s) since the existence of a debt and a default in the payment of debt is established.”

This ruling sets in motion a series of significant changes for Byju’s. As per the IBC, control of the company will transition from the current management to its creditors. The company enters a moratorium period, during which all debts and interest on debts will remain frozen until lifted by an NCLT order. Additionally, no asset transfers can occur during the CIRP, and the initiation or continuation of legal proceedings against Byju’s is prohibited.

The CoC, working through the IRP, now has a maximum of 330 days to attempt a revival of the company through a potential sale to an interested party. Failure to find a buyer within this timeframe could result in the NCLT ordering the company’s liquidation.

Also read: Karnataka HC maintains status quo on Byju’s share allotment pending NCLT decision

While Byju Raveendran or other board members have the option to appeal this decision at the National Company Law Appellate Tribunal (NCLAT) and subsequently the Supreme Court, the lifting of the CIRP remains at the court’s discretion.

The BCCI, which oversees professional cricket in India, initiated the insolvency proceedings over alleged unpaid dues of Rs 158 crore stemming from a sponsorship contract for the Indian cricket team. The BCCI initially filed the case on September 8, 2023, but it was officially registered by the NCLT on November 15.

In response to the development, a Byju’s spokesperson stated, “As we have always maintained, we wish to reach an amicable settlement with BCCI and we are confident that, despite this order, a settlement can be reached. In the meantime, our lawyers are reviewing the order and will take necessary steps to protect the Company’s interests.”

Sources aware of the matter, indicated that Byju’s plans to challenge the order at NCLAT (National Company Law Appellate Tribunal).

Sources familiar with the matter reveal that the BCCI’s claim represents the largest among Byju’s creditors. However, several other companies have also raised substantial claims against the ed-tech firm. Surfer Technologies Pvt Ltd is seeking over Rs 2 crore, while Cogent E-services has filed for more than Rs 6 crore. McGraw Hill Education India and iEnergizer Services have claimed approximately Rs 1.75 crore and Rs 13 crore, respectively.

The total amount due to Byju’s creditors exceeds Rs 200 crore, according to sources.