In a significant development in the ongoing legal battle surrounding edtech giant Byju’s, the National Company Law Appellate Tribunal (NCLAT), Chennai Bench, on April 17, 2025, dismissed appeals filed by the Board of Control for Cricket in India (BCCI) and Riju Raveendran. The appeals were filed against the March 2024 order of the National Company Law Tribunal (NCLT), Bengaluru, which had directed BCCI to withdraw its insolvency plea and instructed that the settlement proposal be placed before the Committee of Creditors (CoC) of Byju’s parent company, Think & Learn Pvt. Ltd.
This ruling by the NCLAT is a significant win for Byju’s as it continues its efforts to navigate through financial distress and mounting creditor claims, while trying to resolve disputes through negotiated settlements.
Background: BCCI’s Insolvency Petition Against Byju’s
The insolvency proceedings against Byju’s were initiated by BCCI after the latter filed a Section 9 petition under the Insolvency and Bankruptcy Code, 2016 (IBC), alleging a default of ₹158.90 crore in dues owed to it by Byju’s. These dues stemmed from a sponsorship deal where Byju’s was the official sponsor of the Indian cricket team. The BCCI claimed that payments were pending for an extended period, despite multiple notices.
In March 2024, the NCLT Bengaluru admitted the plea for hearing but, in a surprising turn, asked BCCI to consider withdrawing the petition in light of a settlement proposal submitted by Byju’s and to present this proposal before the CoC.
This order was challenged by both BCCI and Riju Raveendran, a minority shareholder and former director of Think & Learn, before the NCLAT.
NCLAT’s Ruling: Settlement Proposal to Take Precedence
On April 17, 2025, the NCLAT upheld the NCLT’s direction, dismissing the appeals and reiterating the importance of CoC’s role in considering the commercial viability of any settlement proposal under the IBC framework.
The appellate tribunal emphasized that once a company is under financial distress and settlement is on the table, the interests of all stakeholders—not just individual operational creditors—must be weighed. The tribunal noted that:
“It is the Committee of Creditors that must evaluate the feasibility and viability of a settlement proposal in accordance with the provisions of the Insolvency and Bankruptcy Code. The Tribunal cannot supplant its own view over that of the CoC.”
The NCLAT observed that insolvency proceedings are meant to resolve financial distress in a time-bound manner, and if the debtor offers a credible settlement proposal, it must first be considered by the CoC before pushing the company into insolvency proceedings.
Key Takeaways from the Ruling
- CoC as Decision-Maker: The ruling reinforces the principle that the CoC is central to decision-making in corporate insolvency resolution. Courts and tribunals must defer to the commercial wisdom of the CoC.
- Encouragement of Settlements: The NCLAT’s decision promotes the IBC’s underlying objective of resolving insolvency and reviving companies where possible. It gives a clear signal that settlements and out-of-court resolutions should be encouraged if viable.
- Limited Grounds for Appeal: The decision also sets a precedent that operational creditors, even large entities like the BCCI, cannot object to procedural directions of the NCLT if those directions aim to preserve the corporate debtor’s economic value and allow the CoC to assess settlement plans.
Implications for Byju’s and the EdTech Sector
This judgment is a welcome relief for Byju’s, which has been under intense financial scrutiny amid employee layoffs, office shutdowns, and multiple creditor petitions. With the dismissal of BCCI’s appeal, the path is now clearer for Byju’s to present its revival plan and potentially avoid being dragged into formal insolvency proceedings.
The ruling may also offer broader implications for the startup ecosystem and the edtech sector in particular. As many companies in the space face financial headwinds post-pandemic, this case underscores the importance of structured settlement mechanisms and the critical role of creditor committees.
Riju Raveendran’s Role and Appeal
Riju Raveendran, who was once a board member and continues to hold equity in Think & Learn, had also challenged the NCLT order, arguing that the settlement proposal undermined shareholder interests and lacked transparency. However, the NCLAT dismissed his contentions, holding that as a shareholder, he cannot stall the insolvency process or interfere with CoC-led negotiations.
The Tribunal reiterated that minority shareholders do not have standing to challenge procedural orders that pertain to settlement mechanisms unless there is clear evidence of fraud or legal impropriety—which was not the case here.
Legal Analysis: Importance of Commercial Wisdom and Structured Resolution
The NCLAT’s judgment aligns with the Supreme Court’s consistent jurisprudence that commercial decisions taken by the CoC must not be second-guessed by tribunals. In K. Sashidhar v. Indian Overseas Bank and Essar Steel v. ArcelorMittal, the Apex Court had affirmed that courts must respect the business decisions of the CoC as long as they are taken in accordance with the law.
The present case also reiterates the objective of the IBC—to enable resolution, not merely liquidation. It highlights that insolvency should be the last resort and that debt resolution through negotiations and settlements, if feasible, should be explored.
Conclusion
The NCLAT’s dismissal of BCCI and Riju Raveendran’s appeals marks a pivotal point in Byju’s insolvency saga. It underscores the legal framework’s preference for resolution over liquidation and reinforces the primacy of the CoC in insolvency proceedings.
For Byju’s, this provides a crucial window to regroup and potentially work out a feasible repayment plan in collaboration with its creditors. For other companies in financial distress, this ruling serves as a reminder of the importance of proactive engagement with creditors and the viability of settlement-driven resolutions under the IBC regime.
