In relief to founders, NCLT stays Byju's FORM G bidding process till next hearing

The direction came in IA 490 of 2026, an application by founders Byju Raveendran and Riju Ravindran questioning the quantum of the claim of GLAS Trust Company LLC, the US agent for lenders to a USD 1.2-billion term loan taken by a group entity, whose admitted claim of about Rs 11,433 crore gives it more than 99 per cent of the voting power on the committee of creditors. "Until 31st August, you should not go on with the Form G," the bench told the resolution professional's side as the hearing closed, adding that the list of prospective resolution applicants should not be finalised in the meantime.

Senior counsel for the founders mounted a direct attack on the lenders' agent. "Who is GLAS? GLAS is not lender. GLAS is not borrower. GLAS is not guarantor," he submitted, describing the trustee as "a power of attorney holder at best" claiming "a small sum of 11,000-something crores."

Taking the bench to the only authority document produced with GLAS's claim, a direction letter dated July 25, 2024, he argued that it is an unstamped, unregistered letter; that not one of the 124 lenders it names has produced a board resolution authorising it; and that 46 of the 124 lenders never signed it at all, so the agent's claimed representation "gets reduced by more than one-third" on the face of its own document. He argued that the document is signed by only 78 lenders, and none of those 78 have produced a board resolution or authorisation letter empowering GLAS to act for them. The document, the founders argued, leaves the agent with no proven authority to represent any of the 124 lenders at all.

The founders also told the tribunal that GLAS and the lenders it claims to represent have already seized Byju's foreign subsidiaries' assets worth over the USD 1.2 billion they are owed. These assets, including Great Learning PTE, BYJU'S PTE, Epic!, Tynker, BYJU'S Alpha and Tangible Play, were taken over through US bankruptcy and Singapore court proceedings. Many of these recoveries, the founders claim, happened after the Indian insolvency began, which they argue breaches the moratorium.

The founders claimed, GLAS never told the Indian courts or the resolution professional about any of these recoveries, it has continued to claim the full USD 1.2 billion and hold on to more than 99 per cent of the votes in the creditors committee, while quietly collecting more than twice that amount from Byju's foreign subsidiaries overseas.

The founders Counsel also pressed a timeline point: the corporate insolvency process, he said, was on its "735th day" against the 330-day outer limit under Section 12 of the insolvency code, citing Supreme Court rulings that the limit can be crossed only in exceptional cases. "If the period of the CIRP is over, then nobody can go on representing and saying I will do this, that and the other," he argued, pressing for interim orders.

The resolution professional, who filed his reply on the morning of the hearing, confined it to maintainability, submitting that the same issues have been raised in an earlier application (IA 466 of 2025) and are covered by a Supreme Court status quo order. Counsel for the committee of creditors called the submissions "entirely unwarranted", saying no interim order was operating and the identical allegations are sub judice. The founders' counsel shot back:

"If there is a decision on a point, then that decision operates as res judicata," and here, he said, there is none. The tribunal declined wider restraints on the committee for now, noting the respondents must first get an opportunity to reply, but its pause on Form G and bidder shortlisting freezes the next stage of the process till next hearing.

Think & Learn was admitted into insolvency on July 16, 2024 on a Rs 158-crore claim of the BCCI that the founders say was paid in full within weeks; the withdrawal application arising from that settlement is now listed for hearing on September 15. (ANI)