NCLT declines relief to Byjus, refuses to stay Aakash from convening EGM on rights issue

New Delhi: The National Company Law Tribunal has declined to grant any interim relief to insolvency-bound edtech firm Byju’s, which sought to restrain Aakash Educational Services Ltd (AESL) from convening its extraordinary general meeting (EGM) for a rights issue.

It rejected Byju’s plea to stay the EGM to be held on October 29, 2025, observing “acceptance of such plea would lead to an incoherent proposition undermining the independent rights of the company”.

“As a shareholder, the Petitioner (Byju’s) may validly seek financial documents to be aware of the health of the Respondent No 1 (AESL), but the proposed rights issue infusing funds cannot be termed to be unequitable,” said the National Company Law Tribunal (NCLT).

The tribunal’s order mentioned that this is the second petition by Think & Learn Pvt Ltd, which operates under the brand name Byju’s, filed through its Resolution Professional before the Bengaluru bench of the NCLT on the same issue.

Byju’s had requested the proposed EGM to be kept on hold, as the rights issue would reduce its shareholding in Aaskash from 25 per cent to less than 5 per cent.

A two-member bench observed that another petition on a similar issue is pending before it, and detailed arguments are continuing as per the dates scheduled with the consent of the parties.

The fact that the petitioner may or may not be able to exercise rights cannot form the basis to assess the efficacy of the board resolution, said the NCLT.

“We have considered the relevant materials without delving further, given the piquant situation, we do not think that the Petitioner (Byju’s) should be favoured with the interim order,” said the NCLT bench, comprising members Radhakrishna Sreepada and Sunil Kumar Aggarwal.

The tribunal has directed to list the case for November 12, 2025, when other petitions, on a similar issue, are scheduled for the hearing next month.

“In the meanwhile, let the notice of the petition be issued to the Respondents No 1 to 22 (Aaskash and others),” said the three-page NCLT order passed on October 17.

In its petition, Byju’s has submitted that EGM is in gross violation of the Articles of Association. It is against the order passed by the NCLT on November 19, 2024, as it ignores the participating/veto rights of Think & Learn.

Byju’s had further submitted that, as it is undergoing insolvency proceedings, it is not in a position to comply with the same, and it will effectively dilute its shareholding from 25 per cent to less than 5 per cent.

It argued that Byju’s shareholding in AESL constitutes its major asset and its depletion will seriously prejudice.

Moreover, the Committee of Creditors of Byju’s also supported RP’s petition, saying their rights are also involved and need to be protected.

Opposing it, AESL’s counsel submitted that its AOA are not workable after expiry of the timelines of the major framework and swap completion arguments.

Moreover, banks are not willing to extend further loans to AESL, given the dispute among shareholders and its precarious financial health, its Board has decided to generate funds by increasing equity through a rights issue. Moreover, Byju’s is not going to be excluded from participating in it.

BYJU’s is currently going through the Corporate Insolvency Resolution Process.