Supreme Court Sends Notice to GLAS Trust and IRPs After BYJU’S Promoters File Petition

The Supreme Court of India has issued a legal notice to GLAS Trust Company and a group of Interim Resolution Professionals (IRPs) after BYJU’S promoters filed a petition seeking legal protection. This new development adds another major chapter in the ongoing legal and financial troubles faced by India’s largest edtech company, BYJU’S.

What Is the Case About?

The case revolves around a conflict between BYJU’S promoters and certain financial stakeholders, including GLAS Trust Company—a financial trustee representing several international lenders. The Interim Resolution Professionals (IRPs) were appointed as part of insolvency-related processes. The promoters of BYJU’S have moved the Supreme Court seeking intervention to stop actions being taken by these parties, claiming that the proceedings are unfair and could damage the company and its management.

The promoters argue that these parties are violating their legal rights and pushing the company toward insolvency resolution without proper justification. They also claim that the lenders and their representatives are trying to take control of the company without following due process.

Who Filed the Petition?

The petition has been filed by Think & Learn Pvt. Ltd., the parent company of BYJU’S, which is led by its founder and CEO Byju Raveendran. The petitioners claim that the actions taken by GLAS Trust and the IRPs were premature, unlawful, and not in the company’s interest. According to the petition, these actions are affecting the operations of the edtech firm at a time when it is already under financial stress.

The promoters allege that the IRPs are acting at the direction of GLAS Trust and foreign lenders, with the intention of taking control of the company’s governance, which should be protected under Indian corporate law.

Supreme Court’s Reaction

The Supreme Court has taken the matter seriously and has issued notices to the GLAS Trust Company as well as the IRPs involved in the case. The court has asked them to respond to the petition filed by the promoters of BYJU’S. A bench headed by Chief Justice DY Chandrachud issued the notices and has fixed the hearing for further arguments in the coming weeks.

The Supreme Court also sought an explanation about the current status of the insolvency process, and whether the steps taken by the IRPs and GLAS Trust have legal validity.

Background: BYJU’S Financial Troubles

Once considered India’s most valuable startup, BYJU’S has been under severe financial pressure for the past year. The company, which offers online education services across various subjects and competitive exams, had expanded aggressively both in India and abroad. However, issues like rising operational costs, debt burden, and falling user engagement created problems.

In 2023 and 2024, BYJU’S faced multiple lawsuits from investors and lenders, including allegations of financial mismanagement and lack of transparency in business practices. One of the most concerning aspects was BYJU’S defaulting on a $1.2 billion loan taken from international lenders. This led to a major legal battle with GLAS Trust Company, which represents these lenders.

What Are IRPs?

Interim Resolution Professionals (IRPs) are individuals or firms appointed during corporate insolvency resolution under India’s Insolvency and Bankruptcy Code (IBC). Their job is to manage the affairs of the company temporarily until a solution is found. The promoters of BYJU’S claim that the IRPs are not working in an unbiased way, and instead are aligning themselves with GLAS Trust and trying to replace the current management.

According to the plea, this kind of action could destabilize the company further and cause loss to shareholders, employees, and students who depend on the services of BYJU’S.

BYJU’S Position on the Issue

BYJU’S and its legal team argue that the appointment of the IRPs was done illegally and without proper authority. They state that the company is still operational and not under liquidation, so the lenders have no right to initiate such a resolution process.

The promoters also said that they are willing to work with all stakeholders, but want the court to protect their legal rights and prevent external parties from hijacking the management of the company.

What Does GLAS Trust Say?

So far, GLAS Trust Company has not released an official statement on the Supreme Court notice. However, in previous filings, they have maintained that they are acting in the interest of international lenders who are concerned about the recovery of their money. They claim that BYJU’S has failed to meet its repayment obligations and that legal action was the only option left.

According to GLAS Trust and the lenders, the company’s current management has lost credibility and is not taking proper steps to fix the financial crisis. Hence, they argue that bringing in IRPs is the best way to save the company and protect investor interests.

Legal Experts Weigh In

According to legal experts, this case could set a major precedent in Indian corporate law. It raises important questions about how foreign lenders can take action against Indian startups, and whether IRPs can be appointed without domestic insolvency proceedings.

Some lawyers believe that the Supreme Court will have to balance the rights of the lenders with those of the promoters, especially when the company is still functioning and has a customer base. Others argue that if BYJU’S has indeed defaulted, then lenders do have the right to recover their dues through legal channels.

What’s at Stake?

This is not just a legal battle; it is also about the future of India’s startup ecosystem. BYJU’S is a high-profile company, and what happens here could affect investor confidence in Indian startups, especially those who seek international funding.

The outcome of this case will also affect the millions of students and parents who use BYJU’S services. If the company is pushed into a corporate resolution process or loses control of its management, it could impact ongoing courses, refunds, and employee salaries.

The Road Ahead

The Supreme Court has given a few weeks’ time for GLAS Trust and the IRPs to respond to the petition. Once their reply is submitted, the court will decide whether to give an interim relief to BYJU’S promoters or allow the resolution process to continue.

In the meantime, BYJU’S is expected to continue its operations normally, though the internal challenges are growing.

The startup’s leadership, including CEO Byju Raveendran, will be watching the court proceedings closely. They are hopeful that the court will take into account the interests of the company, its employees, and its users while making a decision.

The legal clash between BYJU’S promoters, GLAS Trust, and IRPs is becoming one of the most closely watched cases in Indian corporate history. The Supreme Court’s involvement shows the seriousness of the matter. For the edtech sector, startups, and global investors, this case could change the way international financial disputes are handled in India.

As the case progresses, all eyes will be on the next hearing date, and what decision the apex court makes regarding the rights of promoters and the role of international lenders.