NCLAT Chennai Refuses To Stay Aakash's EGM To Approve Rights Issue, Declines Plea By US-Based Lender

The National Company Law Appellate Tribunal at Chennai has rejected a plea by GLAS Trust Company LLC, the U.S.-based lender representing the creditors of crisis hit ed-tech Byju's, to stay the Extraordinary General Meeting (EGM) of Aakash Educational Services Ltd (AESL) scheduled for October 29, 2025.

The EGM aims to approve a rights issue that would dilute Byju's 25.75% stake in AESL to approximately 5%, as the company, currently under insolvency proceedings, cannot participate in the issuance of new shares.

A two-member bench comprising Justice N. Seshasayee and Technical Member Jatindranath Swain heard arguments from GLAS Trust, Aakash, and the Resolution Professional (RP) overseeing Think & Learn Pvt Ltd (TLPL), the parent company of Byju's, which is currently undergoing corporate insolvency resolution.

A detailed order is yet to be made available.

GLAS Trust, which represents Byju's overseas lenders and holds over 90% of the voting rights in its Committee of Creditors, argued that the Aakash shareholding is a key asset of the corporate debtor TLPL.

Senior advocate C Aryama Sundaram, appearing for GLAS Trust, said the Articles of Association of Aakash grant overriding rights to Think & Learn, including a veto over board resolutions and the requirement that at least one TLPL nominee director be present for any valid decision.

Sundaram alleged that Aakash's board, at a meeting on October 21, 2024, attended by Byju Raveendran without the RP's consent, removed these protective clauses and later amended the Articles in defiance of an NCLT order dated November 19, 2024, which had restrained the company from giving effect to such resolutions.

He said the board subsequently increased the authorized share capital from Rs 57 crore to Rs 297 crore without notice to the RP, a move aimed at diluting TLPL's stake. Sundaram also pointed to Aakash's failure to file financial statements for FY 2023–24 arguing that the claimed urgency for the rights issue was unsubstantiated.

Senior advocate Gopal Subramanium, representing Aakash, countered that the company is a separate legal entity not subject to insolvency proceedings. He said the EGM is being convened to meet urgent funding needs, with Aakash serving over 3.5 lakh students and employing 10,000 people.

Subramanium maintained that the rights issue is fully compliant with the Companies Act and allows all shareholders to participate equally. He added that the November 2024 NCLT order had ceased to operate after related oppression and mismanagement petitions were withdrawn in February 2025, and accused Byju's and its creditors of forum shopping through multiple petitions.

The bench questioned how far the IBC can be used to interfere with the commercial decisions of a solvent company in which the corporate debtor holds shares.

Referring to the multiple overlapping cases, the bench observed that “this matter appears to be an octopus with several tentacles,” while noting that the company's funding urgency could not be ignored, yet the interests of the Committee of Creditors and the corporate debtor also needed protection.

Case Title: GLAS Trust Company LLC Vs Shailendra Ajmera, RP of Think & Learn Pvt Ltd & 3 Ors

Case Number: Comp App (AT) (CH) (Ins) No. 139/2025