Case Law Details
Byju Raveendran Vs Aditya Birla Finance Limited & Ors. (Supreme Court of India)
The Supreme Court dismissed the appeal filed by the suspended director and promoter of M/s Think and Learn Pvt. Ltd. against the order dated 12 August 2025 passed by the National Company Law Appellate Tribunal (NCLAT), Chennai, and held that there was no ground to interfere with the impugned order. The Supreme Court also directed that the enquiry against the Interim Resolution Professional (IRP) should proceed expeditiously in accordance with law.
The dispute arose from proceedings under the Insolvency and Bankruptcy Code, 2016 concerning the constitution and later reconstitution of the Committee of Creditors (CoC) of the corporate debtor. The NCLT, Bengaluru Bench, by order dated 29 January 2025, had set aside the reconstitution of the CoC carried out by the IRP on 31 August 2024 and restored the original CoC constituted on 21 August 2024. The NCLT also restored the status of Aditya Birla Finance Limited as a financial creditor and nullified resolutions passed by the reconstituted CoC, including the appointment of the IRP as Resolution Professional.
The original CIRP proceedings commenced after an insolvency petition filed by the Board of Control for Cricket in India was admitted on 16 July 2024 and the IRP was appointed. Aditya Birla Finance Limited submitted a claim of Rs. 47.12 crore as a financial creditor, while Glass Trust Company LLC submitted a claim exceeding Rs. 11,432 crore. The IRP initially constituted the CoC on 21 August 2024 with four financial creditors, namely Glass Trust Company LLC, Aditya Birla Finance Ltd., Incred Financial Services Ltd., and ICICI Bank Ltd.
Subsequently, the IRP reclassified Aditya Birla Finance Limited as an operational creditor and treated the claim of Glass Trust Company LLC as contingent. On 31 August 2024, the IRP reconstituted the CoC by excluding both these entities, leaving Incred Financial Services Ltd. as the sole financial creditor with 100% voting share. This led to applications being filed challenging the IRP’s actions.
The NCLT examined whether the IRP had the authority to reconstitute the CoC without permission of the adjudicating authority and whether the IRP had exceeded powers under the Code. The Tribunal referred to earlier decisions holding that the Resolution Professional has no adjudicatory power and cannot alter the CoC once constituted. The Tribunal relied on decisions including K. N. Rajkumar v. V. Nagarajan and Union Bank of India v. Rajdeep Clothing & Advisory Pvt. Ltd. to hold that there is no provision permitting review of the status of a creditor after constitution of the CoC.
The Tribunal held that the IRP’s role under the IBC is administrative and facilitative, not adjudicatory. It observed that there is no provision in the Code permitting provisional constitution of the CoC. Once the CoC is constituted, it is final unless altered by the adjudicating authority. The Tribunal further held that while an IRP or RP may update claims or determine the quantum of claims, they cannot review or reverse the status of a creditor from financial creditor to operational creditor or vice versa without approval of the adjudicating authority.
The Tribunal found that the IRP had deliberately pursued a second application regarding the reconstituted CoC while not curing defects in the earlier application relating to the first CoC. It observed that the IRP had excluded two major financial creditors holding 99.82% combined voting share and replaced them with a creditor who originally held only 0.18% voting share. The conduct of the IRP was strongly criticised, and the Tribunal directed the Insolvency and Bankruptcy Board of India to conduct disciplinary proceedings.
Before the NCLAT, the appellant argued that the first CoC was only provisional and that the IRP was justified in reconstituting it after examining additional documents. It was also argued that the Tribunal had violated principles of natural justice. However, the NCLAT rejected these arguments and held that neither the Code nor precedent permitted the IRP to review the status of creditors after constituting the CoC. The Appellate Tribunal reaffirmed that the IRP cannot independently alter the composition of the CoC or reclassify creditors once admitted as financial creditors.
The NCLAT concluded that the reconstitution of the CoC excluding major financial creditors was improper and upheld the NCLT order restoring the original CoC constituted on 21 August 2024. It dismissed the appeal, finding no reason to interfere with the well-considered order of the Tribunal.
The Supreme Court thereafter affirmed the NCLAT order and dismissed the appeal, while directing that the enquiry against the IRP proceed expeditiously.
Read Also NCLAT Order in this case: Byju Raveendran Vs Aditya Birla Finance Ltd (NCLAT Chennai)
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
1. Delay condoned.
2. Having heard Mr. Navin Pahwa, the learned Senior counsel appearing for the appellant and having gone through the materials on record, we find no good ground to interfere with the impugned Order dated 12-8-2025 passed by the National Company Law Appellate Tribunal, Chennai in Company Appeal CATHCH)(Ins.) No.120 of 2025.
3. The Appeal is, accordingly, dismissed.
4. The enquiry against the IRP shall proceed further expeditiously in accordance with law.
5. Pending applications, if any, also stand disposed of.
1. Delay condoned.
2. The Appeal is dismissed, in terms of the signed order.
3. Pending applications, if any, also stand disposed of.
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