Byju's Insolvency: Supreme Court Upholds CoC Supremacy, Dismisses BCCI's Plea for Withdrawal Without Creditor Vote

New Delhi, July 21 – The Supreme Court of India today delivered a significant judgment in the high-profile insolvency case of ed-tech giant Think and Learn Pvt. Ltd., the parent company of Byju's. By dismissing appeals filed by the Board of Control for Cricket in India (BCCI) and promoter Riju Ravindran, the apex court has decisively upheld the procedural sanctity of the Insolvency and Bankruptcy Code (IBC), ruling that any application to withdraw a Corporate Insolvency Resolution Process (CIRP) must secure the approval of 90% of the Committee of Creditors (CoC) if filed after the CoC has been constituted.

A bench comprising Justice J.B. Pardiwala and Justice R. Mahadevan affirmed the concurrent findings of the National Company Law Appellate Tribunal (NCLAT) and the National Company Law Tribunal (NCLT), Bengaluru. The decision closes a crucial chapter in the complex legal battle, reinforcing the CoC's central role in insolvency proceedings and clarifying a contentious point regarding the timing and requirements for withdrawal under Section 12A of the IBC.

The appellants, represented by a formidable legal team including Solicitor General Tushar Mehta for the BCCI and Senior Advocates K.K. Venugopal and Guru Krishna Kumar for Riju Ravindran, had sought to bypass the CoC vote. They argued that their settlement and initial request for withdrawal predated the CoC's formation, thus exempting them from the stringent 90% approval threshold. However, the Court was not persuaded, effectively endorsing the principle that the formal filing date of the withdrawal application is the determinative factor.

The Genesis of the Dispute: A Sponsorship Deal Gone Sour

The case originated from a default by Byju's on payments related to a lucrative jersey sponsorship agreement with the BCCI. This led the BCCI, as an operational creditor, to file a Section 9 petition under the IBC. On July 16, 2024, the NCLT admitted the petition, triggering the CIRP against Think and Learn Pvt. Ltd. and appointing an Interim Resolution Professional (IRP).

Shortly thereafter, Byju's and the BCCI reached a settlement. Based on this agreement, the NCLAT, on August 2, 2024, set aside the CIRP. This, however, was not the end of the matter. GLAS Trust, another major creditor of Byju's, swiftly appealed the NCLAT's order to the Supreme Court. On August 14, 2024, the Supreme Court stayed the NCLAT's order, directing that the settlement amount of Rs. 158 crore be held in an escrow account. Crucially, this intervention kept the CIRP alive.

Following this, the IRP proceeded with his duties, and the CoC was officially constituted on August 21, 2024, with various financial creditors, including GLAS Trust and Aditya Birla Finance, becoming its members.

The Core Legal Conundrum: Timing is Everything

The central legal question revolved around the interpretation of Section 12A of the IBC and Regulation 30A of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

• Section 12A of the IBC allows for the withdrawal of an admitted insolvency application with the approval of 90% of the CoC by voting share.
• Regulation 30A provides the procedural mechanism. Regulation 30A(1)(a) applies if the withdrawal application (Form FA) is submitted before the CoC is constituted. In this scenario, the IRP submits the application to the Adjudicating Authority (NCLT) on behalf of the applicant.
• Regulation 30A(1)(b) applies if the application is submitted after the CoC is constituted. Here, the IRP must present the application to the CoC for its consideration, and it can only proceed to the NCLT if it secures the requisite 90% approval.

The appellants' entire case was built on the argument that their situation fell under Regulation 30A(1)(a). They contended that their settlement with the BCCI was finalized and the withdrawal request was made to the IRP on August 16, 2024—five days before the CoC's constitution on August 21, 2024. They argued that any subsequent delay in the formal filing of Form FA by the IRP should not prejudice their position.

However, the timeline of events that followed the Supreme Court's intervention proved fatal to this argument. After the Supreme Court reinstated the CIRP on October 23, 2024, the BCCI formally instructed the IRP to file the withdrawal application on November 11, 2024. The IRP subsequently filed Form FA with the NCLT on November 14, 2024, nearly three months after the CoC had been formed.

The Journey Through the Tribunals: A Consistent Stance

When the matter came before the NCLT, it was met with objections from other creditors, primarily GLAS Trust and Aditya Birla Finance. They argued that since the CoC was now in place, the process had fundamentally changed. It was no longer a bilateral dispute between Byju's and the BCCI; it was a collective proceeding involving all verified creditors.

On February 10, 2025, the NCLT delivered a clear verdict:

"Since the CoC had been constituted on 21 August 2024, the withdrawal application must be placed before the CoC as per Regulation 30A(1)(b)."

The NCLT held that the date of formal filing of Form FA was the legally relevant event, and as this occurred on November 14, 2024, CoC approval was mandatory.

Undeterred, the BCCI and Riju Ravindran appealed to the NCLAT. They reiterated their arguments about the pre-CoC settlement and also pointed to Regulation 30A(3), which mandates the IRP to file Form FA within three days of receipt, suggesting the IRP was at fault for the delay.

GLAS Trust countered effectively, noting that the BCCI itself had instructed the IRP to await the Supreme Court's final decision before proceeding. The NCLAT, in its judgment on April 17, 2025, sided with the objectors and upheld the NCLT's order. The appellate tribunal dismissed the appellants' contentions, stating:

"Since Form FA was filed on 14 November 2024, after the CoC's constitution on 21 August 2024, the provisions of Section 12A and Regulation 30A(1)(b) would apply... The IRP could not be blamed for delay in filing Form FA, as BCCI had itself asked the IRP to wait until the Supreme Court's decision."

The NCLAT found no flaw in the NCLT's reasoning, leading to the final appeal before the Supreme Court.

Supreme Court's Stamp of Approval and Its Implications

The Supreme Court's dismissal of the civil appeals solidifies the legal position established by the NCLT and NCLAT. While the court has not yet released a detailed order, its summary dismissal indicates a complete agreement with the lower tribunals' interpretation of the law.

The key takeaways from this judicial saga are profound for insolvency law practitioners:

1. Supremacy of the CoC: The judgment is a powerful reinforcement of the "commercial wisdom" of the CoC. Once constituted, the CoC becomes the primary decision-making body, and its authority cannot be circumvented by pre-existing bilateral settlements between the debtor and the initiating creditor.
2. Formal Filing is Determinative: The ruling clarifies that for the purpose of Regulation 30A, the "submission" of a withdrawal application is not the informal communication of a settlement but the formal filing of the prescribed Form FA with the adjudicating authority. This places a clear, objective timestamp on the process, removing ambiguity.
3. CIRP as a Collective Proceeding: The decision underscores that once a CIRP commences, it is a proceeding in rem (against the world) and not in personam (between parties). The interests of all creditors are paramount, and a settlement with one creditor cannot unilaterally end the process if other creditors remain unpaid.
4. No Bypassing the Code: The Supreme Court's initial intervention on GLAS Trust's appeal and its final judgment today send a clear message: all parties must operate within the legal framework of the IBC. Attempts to use out-of-court settlements to sidestep the collective resolution process after a CoC is formed will not be entertained.

For Byju's, this means the path to exiting insolvency now runs squarely through its Committee of Creditors. The company and the BCCI must now convince creditors holding at least 90% of the voting share to approve the withdrawal. Given the presence of objectors like GLAS Trust, this will be a challenging negotiation, likely requiring a broader settlement that addresses the concerns of all major financial creditors, not just the BCCI. This ruling ensures that the fate of the embattled ed-tech company will be decided not by one creditor, but by the collective.