The Bengaluru bench of National Company Law Tribunal (NCLT) on Tuesday admitted the application of the Board of Control for Cricket in India (BCCI) for initiation of corporate insolvency proceedings against Think & Learn Private Ltd, the parent company of ed-tech firm Byju’s, for defaulting on an amount of Rs 158.90 crore.
The bench in an order said it cannot be disputed that Byju’s parent company has availed the services of BCCI through sponsorship rights. On examining a trail of e-mails between BCCI and Byju’s, the bench said it is clearly established that “there is an outstanding debt owed to the Operational creditor (BCCI) and there is a default on the part of the Corporate Debtor (Think & Learn)”.
“It is contented that these emails were the admission of the debt owed by the Corporate Debtor (Think & Learn) and the default had occurred since there was request for extension of the time repeatedly,” the order said.
In its order, the NCLT bench also appointed an Interim Resolution Professional and ordered him to constitute a Committee of Creditors after collation of all claims received against Think & Learn within 30 days from the date of his appointment.
As per details mentioned in the order, Think & Learn defaulted on a total of 12 invoices raised by BCCI following numerous international tours and series played by the Indian national cricket team. The BCCI had mentioned August 21, 2022 as the date of first default, that is, the date on which 50 per cent amount was payable and default occurred.
Currently, the amount unpaid and owed to BCCI stands at Rs 158.9 crore, after Think & Learn allowed BCCI to encash the bank guarantee of Rs 143 crore in January last year. “Thus, there is no dispute, in so far as the facts of this case are concerned that the amount raised by the invoices are due and payable, constituting “default” under Section 3(12) of the IBC (Insolvency and Bankruptcy Code),” the order said.
Before the NCLT bench, Think & Learn pushed for the dismissal of the application by BCCI, arguing that the agreement with BCCI for sponsor rights lapsed on March 31, 2022. However, the bench concluded that the raising of invoices is a sufficient indicator that Think & Learn was availing of BCCI’s services even after the agreement lapsed.
In January this year, Byju’s had filed an application with NCLT for arbitration. However, the BCCI in its response had said when a petition under Section 9 of the IBC is present before the Adjudicating Authority, the Adjudicating Authority may either admit or dismiss the petition and that insolvency matters are not arbitral. BCCI had filed the petition on September 23, 2023.
The Bengaluru bench of NCLT on Tuesday said the application for referring the matter for arbitration is not maintainable and rejected it. “…it is abundantly clear as laid down by the Hon’ble Apex Court that the Adjudicating Authority has to either reject or Admit the Application and cannot postulate a third option. In this matter, the application U/s 9 of the IBC has been admitted by the Order passed today, therefore, the application for referring the matter for Arbitration is not maintainable,” it said.
Full order:
BCCI – NCLT ORDER by Express Web on Scribd
© The Indian Express Pvt Ltd
First uploaded on: 16-07-2024 at 11:23 IST
