By stating that “approval of such plea would lead to an incoherent proposal damaging the autonomous rights of the corporation,” it denied Byju’s request to postpone the October 29, 2025, EGM.
The insolvent edtech company Byju’s requested that the National Company Law Tribunal (NCLT) prevent Aakash Educational Services Ltd (AESL) from holding an extraordinary general meeting (EGM) for a rights issue, but the NCLT denied it any temporary relief.
By stating that “approval of such plea would lead to an incoherent proposal damaging the autonomous rights of the corporation,” it denied Byju’s request to postpone the October 29, 2025, EGM.
In order to understand the health of Respondent No 1 (AESL), the Petitioner (Byju’s) may legitimately request financial information as a shareholder. However, the National Company Law Tribunal (NCLT) stated that the planned rights issue injecting funds could not be considered unequitable.
According to the tribunal’s ruling, Think & Learn Pvt Ltd, doing business under the Byju’s brand, has filed a second petition on the identical matter before the NCLT’s Bengaluru bench via its Resolution Professional.
Because the rights offer would lower Byju’s stake in Aakash from 25% to less than 5%, the company has asked that the scheduled EGM remain on hold.
A two-member bench noted that, with the parties’ cooperation, detailed arguments are proceeding on the dates set forth and that another petition on a related matter is still pending before it.
According to the NCLT, evaluating the effectiveness of the board decision cannot be based on the petitioner’s ability to exercise their rights.
The NCLT panel, which included members Radhakrishna Sreepada and Sunil Kumar Aggarwal, said, “Given the current circumstances, we do not believe that the petitioner (Byju’s) should be favored with the interim decision. We have examined the pertinent papers without going further.”
When additional petitions on a related topic are set for consideration next month, the tribunal has ordered that the case be listed for November 12, 2025.
The three-page NCLT judgment published on October 17 said, “In the meanwhile, let the notice of the petition be served to the Respondents No 1 to 22 (Aakash and others).”
EGM is in flagrant breach of the Articles of Association, according to Byju’s appeal. It violates the NCLT’s November 19, 2024, order as it disregards Think & Learn’s veto and participation rights.
Byju’s further argued that it is unable to comply with the same since it is going through bankruptcy processes, which would essentially reduce its stake from 25% to less than 5%.
It contended that Byju’s primary asset is its ownership of AESL, and that its loss would be detrimental.
Additionally, the Byju’s Committee of Creditors endorsed RP’s plea, stating that their rights must be upheld as well. The counsel for AESL opposed it, arguing that its AOA is unworkable after the key framework and swap completion issues have passed.
Furthermore, because of the conflict among shareholders and AESL’s unstable financial situation, banks are unwilling to provide the company any further loans. As a result, the company’s board has chosen to raise money by issuing rights to increase equity.
Furthermore, it will not prevent Byju’s from taking part. Byju’s is now going through the Corporate Insolvency Resolution Process.