Supreme Court Backs Byju's, rejects US Lender Glas Trust's Plea against NCLT’s Order on Aakash’s Equity Rights Issue

In a recent ruling, the Supreme Court of India has dismissed appeals filed by US-based lender GLAS Trust Company LLC and the Insolvency Resolution Professional of Byju's, upholding an NCLAT order that permitted Aakash Educational Services Ltd. to proceed with its proposed rights issue of equity shares.

The appeals challenged the NCLAT, Chennai Bench's order dated October 28, 2025, which had dismissed GLAS Trust's application for an injunction to restrain Aakash from convening an EGM to approve the rights issue and increase its authorised share capital. The application arose from the Corporate InsolvencyResolution Process (CIRP) of Think and Learn Pvt. Ltd. (Byju's).

Counsel for GLAS Trust contended that the resolutions passed at Aakash's EGM and the subsequent rights issue were part of a plan to erode the value of Byju's 25.41% stake in the profitable subsidiary. They argued that the rights issue violated a status quo order passed by the NCLT.

A bench of the NCLAT observed that Aakash's decision to amend its Articles of Association and raise funds through a rights issue flowed directly from a Debenture Trust Deed executed in April 2023, over a year before Byju's insolvency. The Tribunal noted that the IBC does not authorise the Resolution Professional or the Committee of Creditors to control the internal management of a solvent company in which a corporate debtor holds shares.

The NCLAT found that the capital restructuring "appears more as a direct sequel to the Debenture Trust Deed and does not appear to be an independent decision aimed solely to affect the value of the shares that TLPL has in it." The Tribunal emphasised that Aakash, being a distinct juristic entity, retained its independent right to function commercially, observing that "the value of TLPL's shares in Aakash can never be preserved if Aakash is commercially killed."

Before the Supreme Court, a bench of Justice PS Narasimha and Justice Atul Chandurkar refused to interfere with the NCLAT's interlocutory order. The Court held that it was "not inclined to admit the appeal as the NCLAT passed the order only for the purpose of disposing of an interlocutory application."

The Supreme Court dismissed the appeals, finding them without merit for the present interlocutory stage. However, the Court made it clear that "the observations made by the Tribunal are intended only for the purpose of disposing of the interlocutory application and these observations will not have a bearing on the final disposal" of the main appeal, which remains pending before the NCLAT.

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