Industry Updates

NCLAT dismisses appeal filed by foreign investors, in a win for BYJU’S

Published: June 17, 2024
Author: Fashion Value Chain

Today, the Chennai bench of the National Company Law Appellate Tribunal (NCLAT) dismissed a petition filed by certain foreign investors of BYJU’S. These investors had sought an order against the ongoing proceedings in the Bengaluru bench of the National Company Law Tribunal (NCLT).

The learned judges of NCLAT informed the investors’ counsel this that as an appellate court, they cannot intervene in matters that are “yet to mature” in NCLT. “We cannot issue an order on a matter that is yet to be decided by NCLT,” the bench observed, further adding, “We cannot substitute the actions of NCLT.” 

Despite this clarification, the investors’ counsel continued to press for NCLAT to direct NCLT to expedite the hearing. The bench sternly responded, stating, “You cannot misuse the appellate jurisdiction. You cannot approach us for any order issued by NCLT. We only get involved if and when a substantial right has been violated.” At one point, the bench issued a strong rebuke to the investors’ counsel: “If you are not open to hearing the court, then we will be constrained to pass certain orders.”

BYJU’S counsel pointed out that the investors had not even formally filed an application or affidavit regarding the alleged breach of the interim order by BYJU’S. “They haven’t even filed a petition for contempt in NCLT and yet, they have come here to argue as if NCLAT must suo moto take it up for hearing,” he argued, highlighting the investors’ blatant disregard for due process. The court also noted that the investors’ petition was incomplete and lacked essential records. “If you don’t come up with complete records, we can be your worst enemy,” the bench warned.

The court concluded that the investors’ appeal was not sustainable.

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