The National Company Law Tribunal (NCLT), Bengaluru bench, on Wednesday, directed disciplinary action against Pankaj Srivastava, the resolution professional (RP) managing Byju’s insolvency proceedings, and reinstated two previously ousted key creditors—US-based GLAS Trust Company and Aditya Birla Finance Limited—to the Committee of Creditors (CoC).
The tribunal has directed the Insolvency and Bankruptcy Board of India (IBBI) to investigate Srivastava’s conduct, noting actions intended “to mislead the tribunal.” The NCLT also declared the removal of GLAS Trust and Aditya Birla Finance from the CoC as invalid and restored the composition of the committee to its status on August 21, 2024.
The tribunal also nullified all resolutions passed by the reconstituted CoC, including the decision to confirm Srivastava as the resolution professional on September 3, 2024. It directed the interim resolution professional to convene a fresh CoC meeting and seek recommendations for appointing a new RP.
Both creditors had alleged that Srivastava had engaged in fraudulent activities, including backdating documents and holding unauthorised meetings to reconstitute the CoC. GLAS Trust, representing holders of a $1.35 billion term loan facility, claimed that its classification as a “contingent creditor” was arbitrary and illegal, while Aditya Birla Finance, whose claim of Rs 47.12 crore was reclassified as an operational debt, argued that it was deprived of its rightful position as a financial creditor.
The NCLT observed that Srivastava’s actions exceeded the legal scope of an RP’s authority, which is administrative and non-adjudicatory in nature. Citing regulatory provisions and previous judicial precedents, the tribunal noted in its order that an RP has no power to alter the composition of the CoC without the approval of the adjudicating authority.
With GLAS Trust potentially holding over 99% of the voting share in the CoC, the reinstatement is expected to shift the power dynamics in future resolutions. The NCLT is yet to deliver verdict on BCCI’s application to withdraw its insolvency petition against Byju’s.