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Byju's K3 RP Claims ₹150 Crore Assets Auctioned for ₹16 Crore; NCLT Orders
Bengaluru, – The , has directed the Resolution Professional (RP) of Byju's parent company, , and the successful auction bidder to maintain over assets that were sold amid a deepening ownership dispute. The came on an application by the RP of , who alleged that assets worth approximately ₹150 crore were auctioned for a paltry ₹16 crore.
A Bench of Judicial Member Sunil Kumar Aggarwal and Technical Member Radhakrishna Sreepada also impleaded the winning bidder, , as a party to the proceedings. The tribunal expressed concern that the ownership of several auctioned articles remained “in haze” and ordered their preservation until concrete evidence could be placed before it.
Background: A Tangled Web of Insolvencies
The dispute arises from the parallel of two Byju’s group entities. TLPL, which operated the Byju’s edtech platform, was admitted to CIRP in on a petition by the over unpaid sponsorship dues of about ₹159 crore. Separately, Byju K3 Education is undergoing its own insolvency process after operational creditor filed a petition under .
The present controversy concerns tablets, electronic equipment, and other articles stored in a warehouse used by TLPL, Byju K3, and Aakash. According to the RP of Byju K3, a communication from logistics company specifically identified K3’s assets. Those goods were allegedly handed over to TLPL’s security team and later moved to an warehouse. Despite repeated requests, K3’s RP claimed, inspection of the warehouse was denied.
TLPL’s RP, Shailendra Ajmera, subsequently issued an auction notice on . The auction was conducted on , and Comprint Tech Solutions emerged as the successful bidder. Byju K3’s RP rushed to the NCLT to stop the sale, but by then the auction had already been completed.
Arguments: Ownership vs. Service Provider Status
Before the tribunal, counsel for the Byju K3 RP contended that the applicant had a substantial stake in the auctioned assets and that their further would cripple the CIRP of Byju K3. It was argued that TLPL’s RP had failed to produce any establishing ownership of the articles put up for sale. The applicant also raised red flags about the successful bidder, pointing out that Comprint’s registered address was in an under-construction building that was found locked during repeated visits. “Since the articles worth about Rs.150 crores have been auctioned for about Rs. 16 crores, the bidder is likely to get rid of same to save itself from being entangled in litigation,” the applicant submitted.
Opposing the relief, TLPL’s RP contended that Byju K3 was only a service provider and that the hardware had been procured and supplied by TLPL. The contents of the devices also belonged to TLPL, he argued, and the service relationship did not confer any on Byju K3. Senior counsel for the suspended directors of TLPL supported the applicant, arguing that there was no “tearing hurry” to auction the assets and that the CIRP was meant for revival, not liquidation of assets at meagre value.
Legal Analysis: The Haze of Ownership
The tribunal noted that the applicant had informed it that at least 15 vehicles carrying assets from the warehouse had left for Mumbai in the preceding days. Even if part of the auctioned articles belonged to TLPL, the Bench observed, the ownership of the remaining articles was still unclear.
“Preserving the auctioned articles, in this background, is necessary at least until some concrete evidence comes up. It is not going to irretrievably prejudice anybody including the successful bidder otherwise the altered ground situation cannot be undone,” the order stated.
The NCLT found that the essential elements for granting existed, particularly the need to prevent irreversible changes to the status of the assets while the competing claims were adjudicated.
Court’s Decision: and Directions
The tribunal directed as follows:
- Comprint Tech Solutions is impleaded as Respondent No.2 in the pending application.
- The RP of TLPL and Comprint are directed to maintain over all articles, equipment, and assets auctioned under the August 2 notice until the next hearing.
- Comprint must file, within one week of being served with the order, a detailed inventory of the purchased assets, the complete address where they are stored, and photographs.
- TLPL’s RP must comply with an earlier order dated to provide item-wise details, valuation, and auction procedure documents to the applicant within a week.
- The matter is listed for further hearing on .
The NCLT has not set aside the auction or finally decided who owns the disputed goods. The ensures that the assets remain available for adjudication, preventing any further transfer or disposal that could complicate the already protracted insolvency proceedings of the Byju’s group.
