NCLT Defers Order On Riju Ravindran's Plea Against Glas Trust's Aakash Rights Issue Funding Plan; Subscription Closes Today

The National Company Law Tribunal at Bengaluru on Friday deferred its order on former Byju's promoter Riju Ravindran's interim plea challenging the Committee of Creditors' approval of a Compulsorily Convertible Debenture structure proposed by Glas Trust to fund Think and Learn Private Limited's (Byju's) participation in Aakash Educational Services Limited's ongoing rights issue.

A coram of Judicial Member Sunil Kumar Aggarwal and Technical Member Radhakrishna Sreepada will now pronounce the order on Monday, although the rights issue concludes today.

Under the arrangement approved by the CoC, Glas Trust has already paid about Rs 25 crore of the  Rs 100 crore earmarked for the subscription, and this sum has been deposited with Aakash Educational Services Limited.

The tribunal had reserved its plea on interim relief after hearing extensive arguments on Wednesday

Ravindran had sought to block the CCD arrangement approved by the CoC on November 5. TLPL holds 25.7 percent in AESL and is entitled to subscribe to shares worth Rs 25.75 crore in the rights issue.

As TLPL lacked funds, Glas Trust, which commands 99.25 percent of CoC voting rights, proposed that its subsidiary would subscribe to CCDs issued by TLPL so TLPL could take up its entitlement.

Senior Advocate Navin Pahwa, for Ravindran, argued that the instrument presented to the CoC as compulsorily convertible actually contained clauses allowing the holder to demand conversion only at the end of the term, creating optionality.

He said this brought the instrument within the External Commercial Borrowing framework and raised FEMA concerns because ECB proceeds cannot be used for equity subscription under RBI regulations.

He added that the CoC voted on incomplete information because only indicative terms were shared during the meeting and that the full draft and executed agreements were circulated later. He also submitted that the executed documents revealed the subscriber to be Byju's Alpha Inc., a Delaware corporation that was formerly a subsidiary of TLPL which he said was never disclosed to the CoC.

Senior Advocate C A Sundaram, for Glas Trust, opposed the plea and said the petitioner had withheld a recent NCLAT order refusing to stay the rights issue and affirming the CoC's authority. He maintained that the CCDs were fully and compulsorily convertible, pointing to the definition of the securities and the requirement of filing FC GPR with the RBI.

The clause cited by Ravindran, he said, was merely an amendment clause and had no bearing on the conversion terms unless both the CoC and the RBI approved future changes. He also said Byju's Alpha Inc. is now wholly owned by Glas Trust, as reflected in US bankruptcy filings, and accused the petitioner of attempting to prevent TLPL from protecting its stake in AESL.

Senior Advocate Abhinav Vashisht, for the Resolution Professional, supported the CoC decision and said the RP is obligated to preserve TLPL's value. He said the company's 25.7 percent stake in AESL is its only substantial asset and that allowing it to fall to 4.99 percent would significantly erode value.

He added that the CCDs contained no redemption feature and therefore constituted equity rather than debt or ECB. He also noted that the funds had already been infused into AESL. Senior Advocate Arvindh Pandian said the plea lacked bona fides.

Although the matter was listed for orders today, the tribunal informed counsels around 4 p.m. that the ruling will now be delivered on Monday. With the rights issue ending today and the funds already deposited with Aakash, the request for interim relief may not survive when the order is passed.

Case Title: Riju Ravindran Vs Resolution Professional and Ors.

Case Number: IA(IBC) 1032/2025

For Applicant: Senior Advocate Navin Pahwa with Advocates Shyamohan V, Rishabh Gupta, Sradhaxna M, Anshika B. and Anirud C instructed by KMNP Law Advocates.

For Resolution Professional: Senior Advocates Abhinav Vasisht, P H Arvind Pandian with Advocates Pooja Mahajan, Arveena Sharma, Ichchha Kalash, Samridhi Shrimali, Sparsh Jain, Harikrishna Pramod, Aishwarya Ravindranath, Lakshana Viravalli and Advocate Madhusmitha