NCLT Bengaluru Admits BCCI's Insolvency Plea Against Think And Learn Pvt. Ltd. With Default Of Rs. 158 Crores

The National Company Law Tribunal (“NCLT”) Bengaluru bench comprising Justice K. Biswal (Judicial Member) and Mr. Manoj Kumar Dubey (Technical Member) admitted the Board of Control for Cricket in India's (“BCCI”) petition for Corporate Insolvency Resolution Process (“CIRP”) against Think & Learn Private Limited (Corporate Debtor) under Section 9 of Insolvency and Bankruptcy Code, 2016 (“IBC”) for default of Rs. 158.90 crores. Background Facts: On 25.07.2019, BCCI and Think & Learn Pvt. Ltd. entered into a 'Team Sponsor Agreement' granting the Corporate Debtor the exclusive rights to market their brand as the sponsor of the Indian cricket teams, use video footage for advertising, engage players in campaigns, use the Operational Creditor's intellectual property, and receive hospitality tickets in exchange of a 'fee'. The terms of payment included 50% of the payment to be made 30 days prior to the series and the remaining amount to be paid after the last match. For the year 2022-2023, Think & Learn Pvt. Ltd. fully paid only one invoice, other invoices remained unpaid, leading to an outstanding amount of Rs 158.90 crores. Despite acknowledging the debt and requesting extensions via emails in April and May 2023, Think & Learn Pvt. Ltd. failed to pay the outstanding amount. BCCI issued a Demand Notice dated 19.07.2023 which was responded to by Think & Learn Pvt. India via reply dated 29.07.2023, claimed that no contract was in force and disputed the validity of the debt. BCCI filed a CIRP petition under Section 9 dated 23.09.2023 against Think & Learn Pvt. India for an outstanding debt of Rs. 158.90 crores before NCLT Bengaluru. NCLT Verdict: The NCLT Bengaluru allowed the application and determined that the 'rights fee' owed by Think & Learn Pvt. Ltd. to BCCI is 'Operational Debt' under Section 5(21) of IBC. It noted that the exclusive Sponsorship Right was granted in exchange for a rights fee, and the invoices included Goods and Services Tax (“GST”) for the services provided. The Tribunal referenced the NCLAT decisions in Somesh Choudhary, Suspended Director at M/s. Global Fragrances Pvt. Ltd. Vs. Knight Riders Sports Pvt. Ltd. and Jaipur Trades Export Centre Pvt Ltd vs M/s Metro Jet Airways Training Pvt Ltd, which acknowledged that GST applies to 'goods' and 'services.' It noted that since the Agreement specified that fees were subject to GST, it indicated the provision of 'services.' The bench disregarded Think & Learn Pvt. Ltd.'s request to refer the dispute to arbitration under Section 8 of the Arbitration and Conciliation Act, 1996. The Applicant had argued that the matter should be referred to Arbitration since BCCI's claims arise from an Agreement that includes an arbitration clause. The Tribunal citing the Supreme Court's decision in Indus Biotech Private Limited v. Kotak India Venture (Offshore) Fund and Ors., ruled: It is abundantly clear as laid down by the Hon'ble Apex Court that the Adjudicating Authority has to either reject or Admit the Application and cannot postulate a third option. In this matter, the application U/s 9 of the IBC has been admitted by the Order passed today, therefore, the application for referring the matter for Arbitration is not maintainable. In conclusion, NCLT Bengaluru admitted the CIRP petition against Think & Learn Pvt. Ltd. with the existence of a debt and a default in the payment of debt of Rs. 158.90 crores. It ordered the appointment of Mr. Pankaj Srivastava as the Interim Resolution Professional (subject to his consent) and requested progress reports to be submitted every two weeks. Case Title: The Board of Control for Cricket in India vs. Think & Learn Private Limited Case No.: CP (IB) No.149/BB/2023 Counsel for the Petitioner: Shri C.K. Nandakumar, Sr. Adv, Adv. Bhavya Mohan & Adv. Ann Pereira Counsel for the Respondent: Shri Pramod Nair, Sr. Adv, Adv. Waseem Pangarkar, Adv. Nadiya Sarguroh, Adv. Yashowardhan Dixit, Adv. Aditi Tiwari, Adv. Arunima Kumari i/b MZM Legal LLP Date of Judgment: 16th July, 2024 Click here to Read/Download Order

NCLT Bengaluru Admits BCCI's Insolvency Plea Against Think And Learn Pvt. Ltd. With Default Of Rs. 158 Crores

Sachika Vij

This is a premium content
Available exclusively to
Our subscribers

INR 1099+GST

Tags

Sachika Vij

NCLT Bengaluru Admits BCCI's Insolvency Plea Against Think And Learn Pvt. Ltd. With Default Of Rs. 158 Crores

Sachika Vij

This is a premium content Available exclusively to Our subscribers

INR 1099+GST

Tags

Sachika Vij

This is a premium content
Available exclusively to
Our subscribers