GLAS Trust v. BYJU Raveendran: The Supreme Court Case That Closed the Section 12A Door

An edtech unicorn, $1.2 billion in cross-border debt, and a 61-page Supreme Court judgment that tightened Section 12A withdrawals

GLAS Trust Co. LLC v. BYJU Raveendran & Ors. · SC, 23 October 2024 · Civil Appeal No. 9986 of 2024 · 2024 INSC 811 · Bench: D. Y. Chandrachud, CJI; J. B. Pardiwala, J.; Manoj Misra, J. · 61-page judgment

What was BYJU’s worth, and why did it owe $1.2 billion?

By the late 2010s, Think and Learn Pvt. Ltd. — better known by the trade name BYJU’s — was India’s most valuable private edtech company. Valuation north of $22 billion at peak. Hundreds of millions in cross-border debt, including a $1.2 billion Term Loan B (TLB) issued through US capital markets. Sponsorship contracts with global brands. A complex group structure spanning India, Singapore, the United States.

By 2023, the company was in trouble. Cash burn outstripping growth, governance problems mounting, the TLB lenders restive.

By 2024, three distinct insolvency-related litigations had crystallised — one in the US Bankruptcy Court in Delaware (initiated by the TLB lenders’ collateral agent GLAS Trust); one in the NCLT Bengaluru (a Section 9 application filed by the Board of Control for Cricket in India, BCCI, alleging unpaid sponsorship dues of approximately ₹158 crore); and one in the Karnataka High Court (a separate writ matter filed by Raveendran against General Atlantic, his largest equity investor).

Four orders trace the saga:

The 23 October 2024 ruling is the substantive one. It is a 61-page judgment, authored by then-CJI D. Y. Chandrachud, and it is the most important Section 12A clarification since 2019.

Why did BCCI — not the $1.2 billion TLB lenders — trigger the CIRP?

The Section 9 application that began the BYJU’s CIRP was filed by the Board of Control for Cricket in India (BCCI) — an operational creditor, with a sponsorship-agreement-related claim of approximately ₹158 crore. The case was filed before the NCLT Bengaluru bench, which admitted it on 16 July 2024, declaring the moratorium and appointing an interim resolution professional.

“Raveendran and his brother, Riju Raveendran are former directors of the Corporate Debtor. The second respondent, the Board of Control for Cricket in India (BCCI) is an Operational Creditor who executed a Team Sponsor Agreement dated 25 July 2019 with the Corporate Debtor, which relates to the sponsorship …”

That an operational creditor — and BCCI, of all entities — was the trigger for India’s largest 2024 CIRP was, in itself, notable. The TLB lenders, who collectively held the larger debt and whose lead trustee (GLAS Trust) eventually carried the matter to the SC, had been pursuing remedies offshore. The CIRP path was opened by an operational creditor — and that, in turn, set up the doctrinal question the SC ultimately answered.

How did BYJU’s try to settle out of CIRP — and why did GLAS Trust object?

Within days of the NCLT admission order, BYJU’s and BCCI reached a settlement: ₹158 crore would be paid (₹50 crore upfront, the balance in instalments). The settlement was reached without the CoC being constituted — the moratorium had been declared, the IRP appointed, but the CoC had not yet voted on anything.

BYJU’s filed an application under Section 12A of the IBC to withdraw the admitted Section 9 application in light of the settlement. The NCLAT (Chennai bench), on 2 August 2024, allowed the withdrawal — applying its own inherent jurisdiction under Rule 11 of the NCLAT Rules and Article 142-flavoured reasoning to give effect to the settlement.

The TLB lenders’ collateral agent — GLAS Trust Company LLC — was furious. The settlement, they argued, would leave the TLB lenders holding the bag: a $1.2 billion debt with no CIRP-led resolution to recover from.

They appealed to the Supreme Court.

“Before the NCLAT, the appellant contended that (i) Section 12A of the IBC and Regulation 30A of the CIRP Regulations 2016 deal with the settlement of claims after CIRP is initiated, both before and after constitution of the Committee of Creditors…”

What did the Supreme Court actually rule on 23 October 2024?

The Supreme Court, in a 61-page judgment by Chief Justice Chandrachud and bench, set aside the NCLAT’s withdrawal order and reaffirmed a clear rule:

After the constitution of the CoC, a Section 12A withdrawal of an admitted CIRP requires the approval of 90% of the CoC’s voting share. Before the CoC is constituted, the withdrawal can be allowed by the AA on an application by the applicant, but it cannot be short-circuited by a bilateral settlement between the corporate debtor and a single creditor.

The text on the 90% rule:

“admitted under section 7 or section 9 or section 10, on an application made by the applicant with the approval of ninety per cent. voting share of the committee of creditors, in such manner as may be specified.”

The Court further held that:

• The NCLAT’s invocation of Rule 11 inherent powers to give effect to a settlement that bypassed the Section 12A procedure was incorrect. Inherent powers cannot be used to override substantive procedural requirements.
• The TLB lenders, through their collateral agent GLAS Trust, had locus to appeal — even though GLAS Trust was not formally a creditor at the time of the NCLT admission, it was the representative of creditors with a substantial economic stake in the proceedings.
• The matter was sent back to the NCLT Bengaluru to resume the CIRP in its admitted state — the moratorium would continue, the CoC would be constituted, the resolution process would proceed.

In practical terms, the ruling unwound BYJU’s escape attempt. The CIRP would proceed. The TLB lenders — now able to assert their claims through the CoC — would have voting share in any subsequent settlement.

How dramatically did Section 12A withdrawals drop after this ruling?

This ruling matters because Section 12A withdrawals, until October 2024, had become a common exit route for corporate debtors who wanted to settle bilaterally with the triggering creditor after CIRP admission. The data shows the practice:

The 2024 collapse — to 59 from 296 in 2022 — is almost entirely attributable to the GLAS Trust v. BYJU ruling and the anticipation of it. Practitioners stopped relying on the inherent- powers route. Bilateral settlements between debtor and a single creditor stopped producing 12A exits.

The result, in operational terms: CIRPs in 2024 had a much harder time being withdrawn. Either the CoC voted by the requisite 90% to allow withdrawal (rare), or the CIRP proceeded to resolution.

What does the corpus not — yet — show?

What this magazine’s data does not show, and what the BYJU’s saga posed but did not answer, is whether the IBC’s domestic CIRP machinery can adequately deal with a corporate debtor of BYJU’s cross-border complexity. Think and Learn has:

• Indian operating subsidiaries (in moratorium under Section 14)
• US subsidiaries (in Chapter 11 in Delaware, with the TLB lenders asserting collateral)
• Singapore holding-company structures (subject to local creditor remedies)
• An estranged Founder-CEO (Raveendran) whose personal guarantee exposure to the TLB lenders is a separate proceeding entirely

The Indian CIRP, post-GLAS Trust, is one piece of a five-jurisdiction insolvency puzzle. The IBC has no formal cross-border insolvency framework. The Section 234/235 letters-of-request route remains unactivated. The ad-hoc protocol approach used in Jet Airways-Dutch trustee coordination is the only available template.

Whether the BYJU’s CIRP eventually produces a coordinated cross- border resolution — or, more likely, a fragmented set of jurisdiction-specific liquidations — is the unanswered question of 2025. This corpus shows the doctrinal moment (the Section 12A clarification). The substantive resolution, if it comes, comes after the cutoff.

Why this story matters for India’s IBC at eight

The IBC was built on a simple premise: a defaulting Indian corporate debtor can be brought into a structured resolution process before a domestic forum. GLAS Trust v. BYJU Raveendran tests every part of that premise.

The corporate debtor is an Indian operating company but with substantial offshore debt structure. The settlement attempt was domestic and bilateral; the loss it imposed was on foreign creditors. The forum (NCLT Bengaluru) and the appellate forum (NCLAT Chennai) were both Indian; the substantive financial stakes (TLB outstanding ~$1.2 billion) were international.

The Supreme Court, in October 2024, closed the bilateral exit route. Whether that closure produces a successful CIRP, or merely forces the cross-border conflict into a more conflictual phase, will define the next chapter of BYJU’s — and, more generally, the next chapter of how India’s IBC handles edtech, fintech, and digital-era corporate distress.