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Judgment
Per: Justice Rakesh Kumar Jain: (Oral)
This appeal is directed against the order dated 29.01.2025 by which the National Company Law Tribunal, Bengaluru Bench (in short ‘Tribunal’) has allowed two applications. The first application bearing I.A No. 660 of 2024, filed by Aditya Birla Finance Limited under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 r/w Rule 11 and 32 of the NCLT Rules, 2016 with the following prayers:-
“a)set aside the decision made by the Respondent in respect of the Applicant's classification as an Operational Creditor;
b)direct Respondent to exclude the Applicant from Annexure S List of Operational Creditors dated 30th August 2024 and to consider the Applicant's claim as a ‘financial debt’ within the meaning of Section 5(8) of the Insolvency and Bankruptcy Code, 2016;
c)direct the Respondent to appropriately reconstitute the Committee of Creditors with the Applicant classified as a Financial Creditor with the proportionate voting accruing in light of the financial debt owed to it by the Corporate Debtor”
The second application bearing I.A No. 820 of 2024 has been filed under the same provisions, by GLAS Trust Company LLC, in which the following prayers have been made:-
“(i)declare that Respondent No.1 does not have the power to re-constitute to the Committee of Creditors [“CoC”] of the Corporate Debtor;
(ii)Set aside reconstitution of CoC and restore the CoC as on 21.08.2024 and
(iii)Set aside resolutions of the CoC held on 03.09.2024 and all subsequent meetings which may have taken place.”
Both the applications have been disposed of by the impugned order with the following directions:-
“a. The reconstitution of the Committee of Creditors carried out by the Interim Resolution Professional on 31st August 2024 is hereby set aside. The Committee of Creditors constituted on 21st August 2024 is upheld and shall remain in effect.
b. The Interim Resolution Professional is directed to convene a meeting of the Committee of Creditors as constituted on 21st August 2024 and submit their recommendation on appointment of the Resolution Professional.
c. The resolution passed by the reconstituted Committee of Creditors on 3rd September 2024, which appointed the Interim Resolution Professional as the Resolution Professional, is hereby set aside. In addition, any subsequent resolutions, if passed by the reconstituted CoC, are also nullified.
d. The Applicant No. 1, Aditya Birla Finance Limited is hereby restored to the status of a Financial Creditor, with all attendant rights, privileges, and obligations, as envisaged under the Code and letter dated 05/09/2024 re-classifying Applicant No.1 as Operational Creditor is set aside.
e. Accordingly, consequential prayers are dealt with.”
The present appeal, however, is filed by the erstwhile director of the Corporate Debtor, namely, Think and Learn Pvt. Ltd., with the grievance that though the Tribunal has heard together with I.A No. 660 of 2024 and I.A No. 820 of 2024, the application filed by the RP bearing I.A No. 837 of 2024 in which the following prayers have been made:-
a. Pass an order directing allowing the withdrawal of the CIRP of the CD which was admitted into CIRP vide order dated 16.07.2024 passed by this Tribunal.
b. Pass an order direction directing the Respondent No. 1 to furnish the bank guarantee or pay an amount of Rs. 3,26,73,863 towards CIRP costs, under Regulation 30A(2)(a) of the CIRP Regulations.
c. Grant such other and further reliefs as the Hon’ble Tribunal may consider just and necessary in the interest of justice” It has not passed any decision in the application I.A No. 837 of 2024, even though it has passed orders in the other two applications.
It is submitted that the application bearing I.A No. 660 of 2024, 820 of 2024 and 837 of 2024 were heard on the same day i.e. on 08.01.2025 and the orders in all the applications were reserved but the impugned order has been passed only in I.A No. 660 of 2024 and I.A No. 820 of 2024.
It is submitted that in terms of the impugned order passed by the Tribunal, the CoC constituted by the RP on 21.08.2024 has been restored and the IRP has called the first meeting of the CoC on 08.02.2024.
The case of the Appellant is that if any step is taken towards the CIRP including reconstitution of the CoC, in terms of the impugned order, then it shall be prejudicial to the interest of the Appellant because had the application bearing I.A No. 837 of 2024 been decided in favour of the Appellant before the impugned orders, the CIRP proceedings would have been terminated.
The brief facts of this case are that an application bearing CP No. 149 of 2023, under Section 9 was filed by the BCCI against the CD which was admitted on 16.07.2024 and Mr. Pankaj Srivastava was appointed as the IRP. The IRP made the public announcement on 17.07.2024 pursuant to which both the Applicants in I.A No. 660 of 2024 and I.A No. 820 of 2024, namely, Aditya Birla Finance Pvt. Ltd. and GLAS Trust Company LLC respectively, filed their claims in Form C.
The admission order was challenged by one of the suspended directors (Mr. Byju Raveendran) of the CD by way of CA (AT) (Ins) No. 262 of 2024 before this Tribunal.
During the pendency of this appeal, the Appellant and BCCI entered into a settlement on the basis of which the appeal was allowed and the CIRP was set aside on 02.08.2024 by this Tribunal. However, the order dated 02.08.2024, passed by this Court, was challenged by way of an appeal before the Hon’ble Supreme Court by GLAS Trust Company LLC. It was initially registered as Civil Appeal Diary No. 35406 of 2024 in which stay was granted by the Hon’ble Supreme Court on 14.08.2024. The order of stay read as under:-
“1 IA No 175985 of 2024 for permission to file the appeal and IA No 175989 of 2024 for permission to file the appeal without certified/plain copy of the impugned order are allowed
2 Issue notice, returnable on 23 August 2024.
3 Pending further orders, there shall be a stay of the operation of the impugned judgment and order dated 2 August 2024 of the National Company Law Appellate Tribunal, Chennai in Company Appeal (AT) (CH) (Ins) No 262 of 2024.
4 The Board of Control for Cricket in India (BCCI) shall maintain the amount of Rs 158 crores which has been realized in pursuance of the settlement, in a separate escrow account, to abide by further directions of this Court.
5 A short list of dates together with written submissions not exceeding three pages shall be filed by the respective parties and be emailed to [email protected].
6 List the Civil Appeal on 23 August 2024 for final disposal.”
According to the Appellant, before the order dated 02.08.2024 passed by this court could have been approved or set aside, the BCCI approached the IRP on 16.08.2024 for filing the application under Section 12A of the Code before the Tribunal. In the said application, it was mentioned by the BCCI that :-
The IRP, on the basis of claim submitted by the Financial Creditors, constituted the CoC on 21.08.2024 in the following manner:-
“That on the basis of verification of available information, the Applicant has constituted the Committee of Creditors in the matter of Think & Lear Private Limited on 21.08.2024 in accordance with Section 18(c) and Section 21(2) of the Code as follows:
| Name of The Creditor | Amount Claimed | Amount Verified | Voting Share (%) |
| Glas Trust Company LLC | 11,432,98,87,753/- | 11,432,98,87,753/- | 99.41% |
| Aditya Birla Finance Limited | 47,12,00,000/- | 47,12,00,000/- | 0.41% |
| Incred Financial Services Limited | 20,34,52,440/- | 20,34,52,440/- | 0.18% |
| ICICI Bank Limited | Nil | Nil | 0.00% |
| Total | 11,500,45,40,193 | 11,500,45,40,193 | 100% |
However, the IRP reconstituted the CoC on 31.08.2024 with only one Financial Creditor. The reconstitution of CoC is as under:-
| Name of The Creditor | Amount Claimed | Amount Verified | Voting Share (%) |
| Incred Financial Services Limited | 20,34,52,440/- | 20,34,52,440/- | 100% |
| Total | 100% |
The decision of the IRP dated 31.08.2024 was challenged by Aditya Birla Finance Limited by way of I.A No. 660 of 2024 on 09.09.2024 and by GLAS Trust Company LLC by way of I.A No. 820 of 2024 on 24.10.2024.
In the meanwhile, on 23.10.2024, the Hon’ble Supreme court allowed CA No. 9986 of 2024 and set aside the order passed by this Court on 02.08.2024 with the following conclusions:-
“F. Conclusion
86.For the above reasons, we allow the present appeal and set aside the impugned judgment of the NCLAT dated 2 August 2024 in the above terms. At this stage, it would not be appropriate for this Court to adjudicate on the objections of the appellant to the settlement agreement on merits. The issues raised are the subject matter of several litigations in different fora, including the Delaware Court and investigation by various authorities, including the Enforcement Directorate, which are pending.
87.During the course of the proceedings before this Court, the CoC has been constituted. The parties are at liberty to invoke their remedies, to seek a withdrawal or settlement of claims, in compliance with the legal framework governing the withdrawal of CIRP. Nothing in this judgment should be construed as a finding on the conduct of any of the parties or other stakeholders involved in the insolvency proceedings.
88.The amount of Rs 158 crore, along with accrued interest, if any, which has been maintained in a separate escrow account pursuant to the Order of this Court dated 14 August 2024, is to be deposited with the CoC. The CoC is directed to maintain this amount in an escrow account until further developments and to abide by the further directions of the NCLT.
89.The civil appeal and special leave petition shall stand disposed of accordingly.
90.Pending applications, if any, stand disposed of.”
Since, the proceeding in I.A No. 819 of 2024 and I.A No. 820 of 2024 was not making any head way, therefore, GLAS Trust Company LLC, who had filed the said application, filed a writ petition before the Hon’ble Karnataka High Court bearing Writ Petition No. 28827 of 2024 for the issuance of a writ of mandamus directing the Tribunal to adjudicate upon its interim application within two weeks. The said writ petition was disposed of on 30.10.2024 with the direction to the Tribunal to dispose of the applications pending before it. Thereafter, the Tribunal heard the applications bearing I.A No. 660 of 2024, 820 of 2024 and 837 of 2024 on 08.01.2025 and reserved the orders. Thereafter, the impugned order has been passed only in respect of two applications i.e. I.A No. 660 of 2024 and 820 of 2024 but I.A No. 837 of 2024 is still pending for decision.
Mr. Arun Kathpalia, Sr. Counsel for the Appellant has vehemently argued that once the Tribunal has reserved all the three applications on the same day then it should have decided all the three applications together and should not have kept the application bearing IA No. 837 of 2024 for orders after the applications I.A No. 660 of 2024 and 820 of 2024 were decided.
Mr. Kapil Sibal, Sr. Adv. duly assisted by Mr. Datta, Sr. Adv. appearing on behalf of the Respondent has submitted that the application was not filed before the constitution of CoC rather it was filed somewhere in November, 2024 after the constitution of CoC. He has further submitted that the first CoC meeting about which there is a great hue and cry raised by the appellant is only with regard to approval for transfer of settlement of funds to CoC, approval for appointment of IRP as the RP and any other matter with the permission of the chair. He has further submitted that this meeting had been called in regard to the agenda qua the orders passed by the Hon’ble Supreme Court on 23.10.2024 in which it has been held that “the amount of Rs 158 crore, along with accrued interest, if any, which has been maintained in a separate escrow account pursuant to the Order of this Court dated 14 August 2024, is to be deposited with the CoC. The CoC is directed to maintain this amount in an escrow account until further developments and to abide by the further directions of the NCLT” and that the said proceedings are totally innocuous which is not going to harm the Appellant. He has also submitted that the Appellant does not have the locus to maintain this appeal. As against this, Counsel for the appellant has submitted that the Appellant has the locus because settlement application was filed pre-CoC whereas stand taken by the Respondent is that the application for settlement has been filed after the CoC.
We have heard Counsel for the parties in detail and are of the considered opinion that the grievance of the Appellant shall be addressed by issuing a direction to the Tribunal, seized of the application bearing I.A No. 837 of 2024, in which the order has already been reserved, to decide the said application as early as possible but preferably within a period of one week. Therefore, we order accordingly.
It is however made clear to the parties as well as to the Tribunal that while disposing of this appeal we have not made any observation anywhere in the order on the merit of the case.
The Tribunal has to take the decision independently about the application in question pending before it for adjudication.
With these observations, the present appeal is hereby disposed of. No costs.
It is needless to mention that in case any order is passed adverse to the interest of the Appellant, the Appellant shall have the liberty to take its legal recourse in accordance with law.
I.As, if any pending, are hereby closed.