NCLT Defers Order on Riju Ravindran’s Challenge to Glas Trust’s CCD Funding Plan for Aakash Rights Issue
Sangeetha Prathap
The National Company Law Tribunal (NCLT) at Bengaluru on Friday postponed its order on the interim application filed by former Byju’s promoter Riju Ravindran, who has contested the Committee of Creditors’ approval of a Compulsorily Convertible Debenture (CCD) structure proposed by Glas Trust to finance Think and Learn Private Limited’s (TLPL) participation in the ongoing rights issue of Aakash Educational Services Limited (AESL). A Bench comprising Judicial Member Sunil Kumar Aggarwal and Technical Member Radhakrishna Sreepada is now expected to deliver the order on Monday, even as the rights issue closes today.
Under the CoC-approved proposal, Glas Trust has already contributed approximately ₹25 crore out of the ₹100 crore set aside for subscribing to the rights issue, and this amount has been deposited with AESL. The tribunal had reserved orders on the plea for interim relief following extensive submissions made on Wednesday.
Ravindran had approached the tribunal seeking to restrain the CCD structure that the CoC approved on November 5. TLPL, which holds 25.7% in AESL, is entitled to subscribe to ₹25.75 crore worth of shares in the rights issue. Since TLPL lacked funds to exercise this entitlement, Glas Trust—holding 99.25% of the CoC’s voting share—proposed that one of its subsidiaries would subscribe to CCDs issued by TLPL to enable the latter to participate in the issue.
Senior Advocate Navin Pahwa, appearing for Ravindran, argued that although the instrument was presented as compulsorily convertible, it in fact contained clauses allowing the holder to demand conversion only at the end of the term, thereby creating optionality. According to him, this brought the instrument within the External Commercial Borrowing (ECB) regime and triggered concerns under FEMA, since ECB proceeds cannot be used for equity subscriptions under RBI rules. He further asserted that the CoC’s decision was based on incomplete information, contending that only indicative terms were shared at the meeting, while full drafts and final executed documents were circulated subsequently. He also maintained that the executed papers revealed that the subscriber was Byju’s Alpha Inc., a Delaware corporation that was earlier a subsidiary of TLPL, and alleged that this fact was not disclosed to the CoC.
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Opposing the plea, Senior Advocate C.A. Sundaram, representing Glas Trust, submitted that the petitioner had failed to disclose a recent NCLAT order which refused to stay the rights issue and affirmed the CoC’s authority. He insisted that the CCDs were fully and compulsorily convertible, referring to the definition of the securities and the need to file FC-GPR with the RBI. According to him, the clause relied on by Ravindran was merely an amendment provision and could not alter the conversion terms without the approval of both the CoC and the RBI. He further stated that Byju’s Alpha Inc. is now wholly owned by Glas Trust, as reflected in U.S. bankruptcy filings, and accused the petitioner of attempting to obstruct TLPL’s efforts to retain its stake in AESL.
Senior Advocate Abhinav Vashisht, appearing for the Resolution Professional, supported the CoC’s decision, arguing that the RP was duty-bound to preserve TLPL’s value. He pointed out that TLPL’s 25.7% holding in AESL was its only major asset and warned that allowing this to shrink to 4.99% would result in substantial value erosion. He also submitted that the CCDs lacked any redemption feature and therefore represented equity rather than debt or ECB, adding that the funds had already been infused into AESL. Senior Advocate Arvindh Pandian also contended that the plea lacked bona fides.
Although the matter was scheduled for orders today, the tribunal informed counsel around 4 p.m. that the ruling would instead be pronounced on Monday. With the rights issue concluding today and the subscription amount already deposited with AESL, the request for interim relief may effectively become redundant when the order is pronounced.
Appearance
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
Cause Title: Riju Ravindran Vs Resolution Professional and Ors.
Case No: IA(IBC) 1032/2025
Coram: Judicial Member Sunil Kumar Aggarwal, Technical Member Radhakrishna Sreepada
