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Informist, Tuesday, Jul 16, 2024

 

NEW DELHI – The Bengaluru bench of the National Company Law Tribunal today admitted the Board of Control for Cricket in India's insolvency plea against BYJU's parent company Think & Learn Pvt Ltd for defaulting on dues amounting to 1.59 bln rupees. The tribunal appointed Pankaj Srivastava as the interim resolution professional of the online education services company to carry out the functions mentioned under the Insolvency and Bankruptcy Code, 2016.

 

"Accordingly, this adjudicating authority is of the considered opinion that there is no reason to deny the petition filed under section 9 of the IBC, 2016 by the Operational Creditor to initiate CIRP (corporate insolvency resolution process) against the corporate debtor (Think & Learn), since the existence of a debt and a default in the payment of debt is clearly established," the tribunal said. It also ordered a moratorium against Think & Learn under section 14 of the Insolvency and Bankruptcy Code, 2016.

 

The bench of judicial member K. Biswal and technical member Manoj Kumar Dubey rejected Think & Learn's plea to refer the parties to arbitration. It said that it was clear from the Supreme Court's earlier verdicts that the tribunal had to either reject or admit the insolvency application and couldn't postulate a third option. "In this matter, the application U/s(under section) 9 of the IBC (insolvency and bankruptcy code) has been admitted by the order passed today, therefore, the application for referring the matter for arbitration is not maintainable," the bench said.

 

The tribunal rejected Think & Learn's contention of there being a pre-existing dispute between the parties. It said it did not find any document furnished by Think & Learn that might show any conflict between the parties for the existence of a dispute prior to the receipt of the demand notice. It said Think & Learn had, through emails and communications, accepted the liability and commitment to clear its outstanding invoices to the cricketing board.

 

In 2019, Think & Learn and the cricketing board entered into a team sponsorship agreement. Under this, the cricketing board provided Think & Learn the exclusive right to marketing related services by way of the exclusive rights to be the team sponsor of the Indian cricket team. The agreement also included advertising related services, promotional services and hospitality and non-hospitality tickets to Think & Learn for every ticketed match organised by the cricketing board.

 

Under the agreement, Think & Learn had to pay a fee to the cricketing board. It was the sponsor of the Indian cricket team, as per the arrangements, and availed the services till March 2023. The order stated that after March 2022, Think & Learn had made payment in full only against one invoice for 2022-23, amounting to 253.55 mln rupees. However, it failed to make payments against the remaining invoices raised by the cricketing board for 2022-23. 

 

After some communications between the parties, Think & Learn had, in January 2023, given its consent to the cricketing board to encash a bank guarantee of 1.43 bln rupees for dues till the International Cricket Council's 2022 World Cup, which was encashed subsequently. However, the amount was insufficient to cover the entire debt, and the bank guarantee was adjusted against some invoices. Even after the encashment of the bank guarantee, invoices aggregating to 1.59 bln rupees remained unpaid. Consequently, the cricketing board moved the tribunal to start insolvency proceedings against the company.  End

 

Reported by Surya Tripathi

Edited by Avishek Dutta

 

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