Supreme Court of India upheld NCLAT order restoring CoC in Think & Learn Private Limited insolvency. Bench of Justice JB Pardiwala and Justice Vijay Bishnoi dismissed appeal by Byju Raveendran.
The Supreme Court of India on Monday refused to interfere with an order of the National Company Law Appellate Tribunal which had restored the original Committee of Creditors (CoC) in the insolvency proceedings of Think & Learn Private Limited (TLPL), the parent entity of Byju’s. The decision effectively affirms the earlier composition of the CoC, which includes Glass Trust Company LLC as a major financial creditor.
A Bench comprising Justice JB Pardiwala and Justice Vijay Bishnoi dismissed the appeal filed by Byju’s founder and suspended director Byju Raveendran.
Expressing strong disapproval of the prolonged litigation, the Court remarked:
“This is now too much. This litigation has gone far beyond… Perfect order. NCLT, NCLAT, we will not interfere… The inquiry initiated against the RP shall proceed further expeditiously in accordance with law,”
During the hearing, the Bench curtailed elaborate submissions from Raveendran’s counsel and declined to entertain allegations of collusion against the Resolution Professional (RP), dismissing such claims outright.
Background of the Dispute
The controversy stems from insolvency proceedings initiated against TLPL in July 2024 on a petition filed by the Board of Control for Cricket in India over unpaid dues. Upon admission of the case, the Interim Resolution Professional (IRP) invited claims from creditors as part of the corporate insolvency resolution process under the Insolvency and Bankruptcy Code.
Among the claims received, Glass Trust Company LLC submitted a claim exceeding ₹11,432 crore, while Aditya Birla Finance Ltd filed a claim of Rs 47.12 crore. Based on these and other claims, the IRP constituted the CoC on August 21, 2024, including Glass Trust, Aditya Birla Finance, Incred Financial Services Ltd, and ICICI Bank Ltd. Glass Trust held more than 99% of the voting share, while Aditya Birla Finance had a marginal share of approximately 0.41%.
However, shortly thereafter, the IRP reconstituted the CoC on August 31, 2024. In this revised structure, Aditya Birla Finance was reclassified as an operational creditor, and Glass Trust’s claim was treated as uncertain, leading to their exclusion. The newly constituted CoC retained only Incred Financial Services Ltd as a financial creditor, thereby granting it complete voting control.
This move triggered multiple legal challenges before the National Company Law Tribunal, with creditors questioning the IRP’s authority to alter the CoC after its initial formation. Under the IBC framework, financial creditors such as banks and institutional lenders form the CoC and exercise voting rights, whereas operational creditors, including vendors and employees, generally do not have voting powers.
Findings of the Tribunals
By its order dated January 29, 2025, the NCLT set aside the revised CoC and reinstated the original composition dated August 21, 2024. It also restored Aditya Birla Finance’s status as a financial creditor and invalidated decisions taken by the reconstituted CoC.
The tribunal held that the IRP, Pankaj Srivastava, had exceeded his authority by reclassifying creditors and altering the CoC without prior approval of the adjudicating authority. It further directed the Insolvency and Bankruptcy Board of India to initiate an inquiry into his conduct.
The NCLAT upheld these findings, emphasizing that the role of the IRP is administrative and not adjudicatory in nature. It ruled that once a CoC is constituted, it cannot be modified unilaterally by the IRP. The appellate tribunal also observed that the IBC does not recognise the concept of a “provisional” CoC and remarked that the IRP’s actions were misleading and detrimental to the integrity of the insolvency process.
Supreme Court’s Decision
Challenging these conclusions, Raveendran argued before the Supreme Court that the initial formation of the CoC was flawed and that the subsequent steps taken by the IRP were part of a legitimate verification process. However, the Court was not persuaded by these submissions and declined to interfere with the concurrent findings of the NCLT and NCLAT.
By dismissing the appeal, the Supreme Court has effectively upheld the reinstatement of the original CoC and allowed the inquiry against the Resolution Professional to proceed. The ruling reinforces the principle that the composition of the CoC central to decision-making in insolvency proceedings cannot be altered arbitrarily, and that the statutory framework under the IBC must be strictly adhered to.
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