The Supreme Court docket on Friday issued discover and mandated established order within the dispute over the authorized standing of Byju’s Committee of Collectors (CoC), in response to a Bar and Bench report.
“We’ve to listen to this matter. Problem discover. Let established order be maintained,” stated a bench of justices JB Pardiwala and KV Viswanathan.
The order intervenes in a fancy authorized battle after the Nationwide Firm Legislation Appellate Tribunal (NCLAT) dominated {that a} CoC, although not a conventional juristic particular person, is competent to litigate its personal identify underneath the Insolvency and Chapter Code (IBC).
The established order order signifies that the prevailing place concerning the CoC and the underlying proceedings will stay unchanged till the Supreme Court docket of India hears the case intimately.
What’s the controversy?
The controversy arises from the continuing company insolvency decision course of (CIRP) of the ed-tech large, which was admitted underneath Part 9 of the IBC.
In August 2024, the decision skilled constituted a four-member CoC. Inside 10 days, nonetheless, the CoC was reconstituted, with GLAS Belief Firm LLC, which held 99.41% voting share, and Aditya Birla Capital Restricted being dropped from the panel.
Each collectors challenged their exclusion earlier than the Nationwide Firm Legislation Tribunal and succeeded in January 2025, securing their reinstatement to the CoC. Subsequently, a suspended director of the company debtor filed a contemporary plea looking for the elimination of GLAS Belief from the CoC.
What’s the CoC’s demand?
Throughout these proceedings, the CoC sought to implead itself as a celebration, contending that the dispute immediately impacted its composition and functioning. The NCLT rejected the impleadment plea, observing that the CoC didn’t possess the authorized character and that the controversy involved solely the creditor whose membership was underneath problem.
After its plea bought rejected by NCLT, the CoC appealed to the NCLAT, which delivered a serious ruling on the authorized character of the CoC.
In accordance with Bar and Bench, the Appellate Tribunal held that the CoC is a statutory creation and never a juristic particular person within the conventional sense. Nonetheless, adopting a practical strategy, it allowed the CoC to litigate in its personal identify for disputes arising throughout the IBC framework.
On the identical time, the NCLAT upheld the NCLT’s refusal to implead the CoC within the particular proceedings in regards to the membership of GLAS Belief Firm.
The 24 February 2026 judgement of the NCLAT’s Chennai bench has now been challenged earlier than the apex court docket by the CoC of Suppose & Be taught Personal Ltd, the mum or dad firm of Byju’s.
Byju’s rose to fame through the Covid-19 pandemic when on-line training companies have been in excessive demand, making it one of many nation’s most useful startup. Nonetheless, it witnessed a pointy reversal in its fortunes after a collection of authorized setbacks, together with alleged accounting irregularities and purported mismanagement.