Byju’s insolvency case: Supreme Court issues notice, orders status quo in CoC dispute over impleadment rights
According to the Bar and Bench report, the Supreme Court on Friday issued notice in the dispute regarding the legal status of Byju Committee of Creditors (CoC) and enforced the status quo.
“We need to hear this matter. Issue notice. Let status quo be maintained,” said a bench of justices JB Pardiwala and KV Viswanathan.
The order intervenes in a complex legal battle after the National Company Law Appellate Tribunal (NCLAT) ruled that a CoC, though not a conventional lawyer, is competent to file suit in his own name under the Insolvency and Bankruptcy Code (IBC).
The status quo order means that the current position on the Supreme Court and substantive proceedings will not change until the Supreme Court of India hears the case in detail.
What is the controversy?
The controversy arises from the education technology giant’s ongoing corporate insolvency resolution process (CIRP), which has been deemed under Chapter 9 of the IBC.
In August 2024, the solution specialist formed a four-member CoC. However, within 10 days, the CoC was reconstituted and GLAS Trust Company LLC and Aditya Birla Capital Limited, which had 99.41% voting rights, were removed from the panel.
Both creditors challenged their expulsion before the National Company Law Tribunal and successfully secured their reinstatement into the CoC in January 2025. Subsequently, a suspended director of the corporate debtor filed a fresh lawsuit to remove GLAS Trust from the CoC.
What is YÖK’s request?
During these proceedings, the Supreme Court tried to defend itself as a party, arguing that the dispute directly affected its structure and functioning. The NCLT rejected the impeachment plea, observing that the CoC did not have legal character and the dispute concerned only the creditor whose membership was being challenged.
After his plea was rejected by the NCLT, the CoC approached the NCLAT and the CoC passed an important decision regarding the legal nature of the CoC.
According to Bar and Bench, the Court of Appeal held that the CoC was a statutory body and not a legal person in the traditional sense. However, it adopted a pragmatic approach, allowing the CoC to litigate on its own behalf disputes arising under the IBC.
At the same time, the NCLAT also upheld the NCLT’s refusal to impeach the CoC in private proceedings regarding the membership of GLAS Trust Company.
The February 24, 2026 order of NCLAT’s Chennai bench was challenged before the top court by the CoC of Think & Learn Private Ltd, the parent company of Byju’s.
Byju rose to fame during the Covid-19 pandemic when its online education services were in high demand, making it one of the most valuable startups in the country. However, it witnessed a sharp reversal in fortunes following a series of legal setbacks, including alleged accounting irregularities and alleged mismanagement.
