TaxTMI 
TaxTMI 
TaxTMI 
2024 (8) TMI 1600
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....hta, Sr. Adv., Mr. Satish Parasaran, Sr. Adv., for Mr. Krishnava Dutt, Advocate, Ms. Aditi Chaudhury, Advocate, Ms. Bhavya Mohan, Advocate, Mr. Ann Finiya Pereira, Advocate, Ms. Mili Baxi, Advocate, Mr. Tanmay Mehta, Advocate, Mr. Kanu Agarwal, Advocate, Mr. Ashwini Vaidlialingam, Advocate, Mr. Gowri MS Advocate for R2 (BCCI), Mr. Mukul Rohatgi, Sr. Advocate, Mr. Krishnendu Datta, Sr. Advocate, Mr. P.H. Arvindh Pandian, Sr. Advocate, For Mr. Avinash Balakrishna, Advocate, Mr. Prateek Kumar, Advocate, Mr. Ashwin Bishwi, Advocate, Mr. Nikhilesh Rao, Advocate, Mr. Thriyambak Kannan, Advocate, Mr. Raveena Rai, Advocate, Mr. Gautam Mudgal, Advocate, Mr. Kevin Joseph, Advocate, Ms. Tejas Shetty, Advocate, Ms. Smrithi Nair, Advocate, Mr. Abhishek, Advocate for Intervenor, For Applicant in I.A.7 27/2024, ORDER (HYBRID MODE) PER: JUSTICE RAKESH KUMAR JAIN (ORAL) The Board of Control for Cricket in India (in short 'BCCI") filed a Company Petition (IB) No. 149/BB/2023 on 23.09.20223 under Section 9 of the Insolvency and Bankruptcy Code, 2016 (in short 'Code') against Think and Learn Pvt. Ltd. (Corporate Debtor) before the Adjudicating Authority (National Company Law Tribunal, Ben....
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.... appointing the IRP, the instant C.P is disposed of by granting liberty to the Petitioner herein to put-forth their claim before the IRP appointed in C.P (IB) No. 149/BB/2023 in accordance with the provisions of the IBC 2016 and the Regulation made thereunder. 4. However, at the request of the Learned Senior Counsel for the Petitioner, we hereby grant liberty to the Petitioner to seek restoration/revival of the said petition bearing C.P (IB) No. 55/BB/2024 depending on the subsequent developments in the matter at the Appellate level; if any. 5. Accordingly, C.P (IB) No. 55/BB/2024 is disposed of and all the pending IAs in the present case stands closed." 6. As per the above order, the Applicant has been given liberty to put forth their claim before the IRP, appointed in the present case, in terms of the provisions of the Code and has also been given liberty to seek restoration/revival of the petition bearing CP (IB) No. 55/BB/2024 depending upon the subsequent developments in the matter at the Appellate level. 7. The Applicant has also challenged the order dated 16.07.2024 passed by the Adjudicating Authority by way of an appeal bearing CA (AT) (CH) (Ins) ....
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.... issue discount of USD 18,000,000. 16. As per the credit agreement, the Corporate Debtor issued a guarantee deed dated 24.11.2021 (the Onshore Guarantee) in favour of the Applicant for the benefit of the secured parties pursuant to its approval by the Reserve Bank of India on 29.03.2022. 17. The parties also executed forbearance agreement on 06.01.2023 whereby the Corporate Debtor acknowledged and agreed that the amount due under the term loan constitutes a financial debt and the Applicant is a Financial Creditor for the purposes of the Code. This Forbearance agreement came into effect from 13.01.2023 as stated. 18. The borrower of the Applicant made default in payment and after the expiration of the forbearance period, the Applicant issued a notice of default and acceleration, inter alia, to the Borrower and the Corporate Debtor on 03.03.2023. The issuance of the default and acceleration notice also constituted a Trigger event which entitled the Applicant immediately to enforce the security provided by parties under the loan documents after which the Applicant removed all preexisting director(s) and officer(s) of the Borrower including Riju Raveendran and appointed of Mr. Timot....
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....(ii) by 5:00 P.M.E.T. on March 21, 2024, take all necessary steps to determine the location, amount, and composition of the Alpha Funds, including but not limited to(a) the identity, address and domicile of the entity that is the beneficial owner of the Alpha Funds(whether a "non-US based 100% subsidiary of BYJU"S" or otherwise). (b) the identity, address, and domicile of each bank, institution or other entity in which the Alpha Funds are deposited held or otherwise located and (c) a line-item breakdown of the assets (whether cash or cash equivalents, securities, loans, derivatives, or otherwise) composing the Alpha Funds; and (iii) by 5:00 P.M. E.T. on March 21.2024. disclose the information required by Section 2(ii) of this Order to the Debtor and GLAS Trust Company LLC ("GLAS"). 3. By 5:00 P.M. E.T. on March 21,2024 counsel for Defendant Ravindran shall file in the Adversary Proceeding a certification of counsel attesting to the compliance of Ravindran with Sections 1 and 2 of this Order, and enclosing (under seal as appropriate) the information disclosed to the Debtor and GLAS. 4. This Order shall promptly be filed in the Clerk's office and entered in the record. The te....
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....s Hon'ble Tribunal as under: 1. I say that on 31 July 2024, I tendered before the Hon'ble National Company Law Appellate Tribunal, Chennai an undertaking (the "Undertaking"） stating a settlement has been arrived at with the Board of Cricket Control of India (the "BCCI"） and that I would discharge the entire amount of INR 158 crores (the "Settlement Amount"） claimed by BCCI. The Undertaking reads as follows: "I shall in discharge of the entire amount in the sum of Rs. 158,00,00,000/-[Rupees One Hundred and Fifty Eight Crore Only], due and payable by Respondent No. 1 to Respondent No. 2 i.e. The Board of Control for Cricket in India ("BCCI"), in terms of the settlement arrived at, pay to BCCI the same in the following manner- (a) Rs. 50,00,00,000/- [Rupees Fifty Crore Only] paid on 30.06.2024 by way of RTGS bearing the UTR No. ICICR52024073000412272; (b) Rs. 25,00,00,000/- [Rupees Twenty-Five Crore Only] to be paid on 02.08.2024 through RTGS; and (c) Rs. 83,00,00,000/- [Rupees Eighty-Three Crore Only] to be paid on or before 09.08.2024 through RTGS. 2. In order to secure the balance payment of Rs. 83,00,....
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....ding in TLPL in January and November 2022 totalling approximately USD 109 million, as demonstrated by the SH-4 annexed hereto at pages and respectively. 7. I further confirm that Byju Raveendran has not transferred any money or extended any security of his assets towards raising the sums for payment of the Settlement Amount to the BCCI. 8. I further state and confirm that the Settlement Amount comprises funds raised by me personally: a. from the sale and the gains/income on such sale of shares held personally by me in TLPL between May 2015 and January 2022. By way of these sales, I had accumulated approximately INR 3600 crores. The forms SH-4 evidencing these sales are hereto annexed and marked Exhibit A. Out of the aforementioned amount, approximately INR 1050 crores was paid as income tax. The IT returns filed by me over the relevant period and which would reflect these amounts are hereto annexed and marked Exhibit B. The remaining amounts of approximately INR 2600 crores was infused back into TLPL due to its operational needs and to ensure that TLPL continues to carry on business as a going concern, including paying salaries to its 27000 employees and sustaining the platfo....
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....given herein and in the event of any default, the order of admission dated 16.07.202f passed by the Hon'ble National Company Law Tribunal, Bengaluru in Company Petition (IB) No. 149/BB/2023 shall stand restored with immediate effect and without any further recourse." Riju states that the BCCI has agreed to and accepted the Undertaking. Riju states and confirm that no part of the Settlement Amount is being paid in violation of any order passed by any court or tribunal, including orders passed by the Delaware Bankruptcy Court. Riju states that he has not received any portion of the USD 533 million that are the subject matter of the proceedings before the Delaware Bankruptcy Court and, accordingly, no part of those funds have been, or will be, used to pay the BCCI. In fact, the funds forming part of the Settlement Amount are being paid out from his personal funds, as explained in paragraph 8 below. To clarify, under the terms of the Credit Agreement dated 24 November 2021 (the "Credit Agreement"), a group of lenders represented by GLAS Trust LLC (GLAS) disbursed an amount of USD 1.2 billion to Byju's Alpha, Inc. (a step-down subsidiary of Think & Learn Pvt. Ltd. (TL....
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....30 June 2024; and b. from liquidation of Riju's personal assets in India, which will be used to pay the balance amount of the Settlement Amount. 9. The content of the present Affidavit-cum-Undertaking is true and correct. Place: Chennai Date: 1 August 2024 25. Mr. Tushar Mehta, Ld. Sr. Counsel appearing on behalf of Respondent No. 2 has submitted that Respondent No. 2 would not accept any tainted money for settlement but since the money being offered by Riju Raveendran, former Promoter Director, is generated in India on which income tax has duly been paid and is coming through banking channel, therefore, the same shall be accepted. Mr. Arun Kathpalia, Sr. Counsel appearing on behalf of the Appellant also submitted that the issue of round tripping is not pleaded in the application and now Respondent No. 2 has also not raised any objection in accepting this money. 26. Mr. Mukul Rahtogi, Ld. Sr. Counsel for the Applicant has vehemently argued that Section 12A of the Code and Regulation 30A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (in short 'Regulations') deals with the settlemen....
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.... stage where the committee of creditors is not yet constituted, a party can approach the NCLT directly, which Tribunal may, in exercise of its inherent powers under Rule 11 of the NCLT Rules, 2016, allow or disallow an application for withdrawal or settlement. This will be decided after hearing all the concerned parties and considering all relevant factors on the facts of each case." 30. As a matter of fact, it is sought to be argued that the Appellant should have approached the NCLT instead of invoking the inherent powers of the Appellate Tribunal under Rule 11 of the Rules. 31. Mr. Krishnendu Datta, Ld. Sr. Counsel also appearing on behalf of the Applicant too has referred to Para 27 and 28 of the same judgment i.e. Swiss Ribbons (Supra) which are reproduced as under:- "27. As is discernible, the Preamble gives an insight into what is sought to be achieved by the Code. The Code is first and foremost, a Code for reorganization and insolvency resolution of corporate debtors. Unless such reorganization is effected in a time-bound manner, the value of the assets of such persons will deplete. Therefore, maximization of value of the assets of such persons so that they are efficient....
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....e debtor's assets from further dilution, and also protects all its creditors and workers by seeing that the resolution process goes through as fast as possible so that another management can, through its entrepreneurial skills, resuscitate the corporate debtor to achieve all these ends." 32. It is argued by him that the interest of all stakeholders should be looked into and since the Applicant has a substantial interest in so far as the CD is concerned, who stood as parent guarantor, invocation of Rule 11 should be avoided. 33. He has referred to certain news items appended with the application to contend that the senior functionaries of the CD have either left or been removed, offices have been vacated, auditor resigned and financial statements have not been filed for the year 2022-23. 34. He has further referred to two decisions of this Court rendered in the cases of Bhaskar Biswas Vs. M/s Devi Trading and Holding Pvt. Ltd. CA (AT) (Ins) No. 823 of 2019 decided on 03.01.2019 and Sintex Plastics Vs. Mahatva Plastic Products and Building Material Pvt. Ltd., CA (AT) (Ins) No. 729 of 2022 to contend that this Court had declined to exercise jurisdiction under Rule 11 of t....
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....deserves to be dismissed. He has further submitted that Rule 11 of the Rules is akin to Section 151 of the CPC which gives power to the Court to make such orders as may be necessary for meeting the ends of justice or to prevent the abuse of the process. He has further submitted that the judgment relied upon by Mr. Krishnendu Datta, Ld. Sr. Counsel for the Applicant, in the case of Bhaskar Biswas (Supra) is of the year 2019 whereas there is a change in law of settlement which has been gradually evolved by the Courts. It is submitted that initially there was no provision for settlement in the Code but Section 12A of the Code was inserted by Act No. 26 of 2018 w.e.f. 06.06.2018 and Regulation 30A of the Regulations was inserted by IBBI/2018-19/GN/Reg048 w.e.f 25.07.2019 and the Courts are now inclined to invoke Rule 11 of the Rules for the purpose of settling the dispute between the parties before the CoC is constituted. In this regard, he has relied upon a decision of the Hon'ble Supreme Court in the case of Abhishek Singh Vs. Huhtamaki PPL Ltd. &Ors. Civil Appeal No. 2241 of 2023 decided on 28.03.2023 and referred to Paras 27, 35 to 37, 43 and 44 which are reproduced as un....
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....he parties on 08.08.2021, after the NCLT had admitted the application under section 7 of IBC vide order dated 03.08.2021. On appeal, the NCLAT vide order dated 18.08.2021 stayed the formation of CoC but declined to exercise its powers under Rule 11 of the NCLAT Rules. The said order was challenged before this Court. This Court in its order in paragraphs 29 and 30 gave reasons as to why the applications for withdrawal cannot be stifled before the constitution of CoC by third parties. The said paragraphs are reproduced below: "29. Considering the investments made by the Corporate Debtor and considering the number of people dependant on the Corporate Debtor for their survival and livelihood, there is no reason why the applicant for the CIRP, should not be allowed to withdraw its application once its disputes have been settled. 30. The settlement cannot be stifled before the constitution of the Committee of Creditors in anticipation of claims against the Corporate Debtor from third persons. The withdrawal of an application for CIRP by the applicant would not prevent any other financial creditor from taking recourse to a proceeding under IBC. The urgency to abide by the timelines fo....
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....8.2021, after the NCLT had admitted the application under section 7 of IBC vide order dated 03.08.2021. On appeal, the NCLAT vide order dated 18.08.2021 stayed the formation of CoC but declined to exercise its powers under Rule 11 of the NCLAT Rules. The said order was challenged before this Court. This Court in its order in paragraphs 29 and 30 gave reasons as to why the applications for withdrawal cannot be stifled before the constitution of CoC by third parties. The said paragraphs are reproduced below: "29. Considering the investments made by the Corporate Debtor and considering the number of people dependant on the Corporate Debtor for their 30 survival and livelihood, there is no reason why the applicant for the CIRP, should not be allowed to withdraw its application once its disputes have been settled. 30. The settlement cannot be stifled before the constitution of the Committee of Creditors in anticipation of claims against the Corporate Debtor from third persons. The withdrawal of an application for CIRP by the applicant would not prevent any other financial creditor from taking recourse to a proceeding under IBC. The urgency to abide by the timelines for completion of....
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....T Rule, 2016. The Financial Creditor having settled the matter with the Corporate Debtor and Settlement letter dated 08th May, 2023 having been brought on record, we find it a fit case to exercise jurisdiction under Rule 11 of NCLAT Rules, 2016 to close the CIRP. We are of the view that on account of objection raised by the intervener of his filing claim before the IRP, the CIRP cannot be allowed to proceed since the debt for which CIRP has been initiated, has been settled with the Financial Creditor. The Intervener is free to take such legal proceedings as may be advised to protect his interest. 22. In view of the foregoing discussions, we take the settlement letter dated 08th May, 2023 on record, close the CIRP against the Corporate Debtor setting aside the Order dated 23.12.2022. Intervener is at liberty to take its own proceeding in accordance with law to protect its interest. The Appeal is disposed of, accordingly." 38. He has also relied upon a decision of the Hon'ble Supreme Court in the case of Ashok G. Rajani Vs. Beacon Trusteeship Ltd. & Ors., 2022 SCC OnLine SC 1275 and has referred to para 30 which is reproduced as under:- "30. The settlement cannot be stifled befo....
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....so withdrawal from the account of the CD. They have thus violated the directions contained in the admission order dated 01.03.2021; iii. Although the IRP had made submissions that the suspended director having transferred huge amount from the account of the company to his personal account and from there having made the payment to the OC under the settlement but the same was not conclusively proved; iv. The suspended director and their counsel made frivolous arguments before the NCLT which were contrary to record in order to obtain favourable orders; v. As many as 35 claims of creditors both operational and financial have been filed in the meantime. As such withdrawal of the proceedings would adversely affect their rights; vi. The proceedings once admitted and IRP having initiated, such proceedings are in rem and all stake holders can participate in the proceedings with their respective claims; and vii. Regulation 30A of IBBI Regulations was not binding upon it and such provision would not be of any help to the CD or its suspended Directors; 21. The finding recorded by the Ld. Tribunal was that there were 35 claims of the creditors both operational and financial have been filed in....
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.... 240 of IBC for the subjects covered therein had accordingly substituted Regulation 30A dealing with the procedure for disposal of application for withdrawal filed Under Section 12A of IBC. The substituted Regulation 30A of IBC as it stands today clearly provided for withdrawal applications being entertained before constitution of CoC. It does not in any way conflicts or is in violation of Section 124 of IBC. There is no inconsistency in the two provisions. It only furthers the cause introduced vide Section 12A of IBC. Thus, NCLT fell in error in taking a contrary view". 23. Ultimately, the following findings have been recorded at para 40 to 44 which are reproduced as under: "40. Both the parties have relied upon paragraph 82 of the judgment in the case of Swiss Ribbons (supra). According to the Appellant, the NCLT ought to have exercised its inherent powers Under Rule 11 of the NCLT Rules whereas for the intervenors it is submitted that this Court had observed that power Under Rule 11 would be exercised after hearing all concerned parties. It may be noted that at the time when the application for withdrawal of the proceedings was filed the CoC was not constituted as such there c....
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....the case of the Abhishek Singh (supra). 25. Consequently, in view of the settlement arrived at and the money having been paid, duly received by the creditor (Omkara asset Reconstruction Company Pvt. Ltd.), order of admission passed against the CD in CP (IB) No. 1089 of 2022 does not survive and hence CA (AT) (Ins) No. 711 of 2023 is hereby allowed. CP (IB) No. 439 of 2022 has been disposed of as infructuous because of the admission of CP (IB) No. 1089 of 2022, can be revived for pursuing their remedy against the corporate debtor for the resolution of their claim/debt. In so far as, issue regarding the dues of the IRP are concerned, it can be taken care of by the Adjudicating Authority, if 18 CA (AT) (Ins) Nos. 711, 478 of 2023 and when the IRP file an application on form FA and put up his claim for the CIRP cost." 40. He has also relied upon a decision of the Hon'ble Supreme Court in the case of Kamal K. Singh Vs. Dinesh Gupta, (2022) 8 SCC 330 which is reproduced as under:- "Leave granted. (2) This appeal arises out of a judgment and order dated 06.08.2021 passed by the National Company Law Tribunal, Mumbai Bench, in I.A. NO.1196 of 2021 in Company ....
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....en the Corporate debtor and the applicant-respondent no. 1. (5) Having heard learned counsel for the parties and having regard to the facts and circumstances of the case, we are of the view that the applicant-respondent no. 1 was justified in filing the application under Rule 11 of the NCLT Rules for withdrawal of the company petition on the ground that the matter has been settled between the parties. (6) The appeal is accordingly allowed. The order of the NCLT dated 06.08.2021 is hereby set aside and the company petition, for which withdrawal application was filed under Rule 11 of the NCLT Rules, is ordered to be withdrawn. No costs." 41. It is pertinent to mention that since the hearing of this case could not conclude on 01.08.2024, therefore, on the request of Counsel for the parties, it was adjourned for today and the constitution of CoC was stayed. 42. We have heard Counsel for the parties and perused the record with their able assistance. 43. From the narration of the aforesaid facts and the law which we are not repeating for the sake of brevity it becomes clear that after the order was passed on 16.07.2024 by the Adjudicating Authority against the Corporate Debtor, th....
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....ed to the borrower in terms of credit agreement or has been taken out of the coffers of the CD. 45. Mr. Tushar Mehta, Ld. Sr. Counsel appearing on behalf of Respondent No. 2 today as well has categorically argued that Respondent No. 2 would be the last authority to receive any tainted money but now this money offered by Riju Raveendran is being accepted by Respondent No. 2 because it is generated in India, coming from proper channel, source is disclosed, tax has been paid and it is coming through banking transactions. 46. In view of the aforesaid facts and circumstances, the only issue which remains to be addressed to as to whether this Court should invoke Rule 11 of the Rules for the purpose of accepting the settlement? 47. It is needless to mention that borrower has already approached the Bankruptcy Court in US and obtained a prohibitory injunction against the Companies to whom the borrowed money stated to have been transferred. It is altogether a different situation that the US Court has imposed a cost of USD 10,000 per day upon Riju Raveendran for the not cooperating with the order passed by it on 18.03.2024 because it is not relevant for the purpose of decisi....