GLAS TRUST COMPANY LLC Vs. BYJU RAVEENDRAN

JUDGEMENT

(1.) This appeal arises from a judgment of the National Company Law Appellate Tribunal, Chennai ["NCLAT"] dtd. 2/8/2024. ["Impugned Judgement"] The National Company Law Tribunal, Bengaluru, ["NCLT"] admitted the application instituted by the second respondent under Sec. 9 of the Insolvency and Bankruptcy Code ["IBC"] and initiated the corporate insolvency resolution process ["CIRP"] against the third respondent. In the exercise of its powers under Rule 11 of the National Company Law Appellate Tribunal Rules, 2016 ["NCLAT Rules"], the NCLAT approved a settlement in relation to the dues payable to the third respondent by the second respondent and set aside the order of the NCLT.

(2.) The appellant, who claims to be a Financial Creditor, had moved an application before the NCLAT objecting to the approval of the settlement and questioned the source of the funds for the settlement. The objections of the appellant were rejected by the NCLAT in the Impugned Judgement. The present appeal raises substantial questions about the legal framework governing the withdrawal of a CIRP; the settlement of claims after the admission of an application instituted by a debtor; and the scope of the inherent powers vested in the NCLAT under Rule 11 of the NCLAT Rules.

(3.) The third respondent, Think and Learn Pvt Ltd, a company engaged in the business of providing online educational services, is the Corporate Debtor. ["Corporate Debtor"] The first respondent, Byju Raveendran and his brother, Riju Raveendran are former directors of the Corporate Debtor.