NCLAT Allows Withdrawal Of Byju's-Aakash Rights Issue Dispute Appeals, Permits Revival If Settlement Fails

The National Company Law Appellate Tribunal (NCLAT) at Chennai has allowed the withdrawal of three appeals arising from the rights issue dispute between Aakash Educational Services Limited and Think & Learn Private Limited, the parent company of Byju's, while granting liberty to revive the appeals if the settlement between the parties fails.

A bench of Judicial Member Justice N. Seshasayee and Technical Member Jatindranath Swain was hearing applications seeking withdrawal of the appeals in view of the settlement reached between the parties.

The bench ruled, 

"These IAs are filed for withdrawal of appeals based on certain settlements reached between the parties. However, the settlement has a rider to prosecute the appeal in an eventuality of the settlement failing. Accordingly, we record the memo of settlement and close the appeal, granting the liberty to the appellant to revive the appeal in the eventuality of the settlement failing. No Costs"

The parties had earlier informed the National Company Law Tribunal (NCLT) at Bengaluru on reaching a settlement in their dispute over Aakash's rights issue.

The proceedings stem from Aakash's rights issue, which Think & Learn had challenged before the NCLT on allegations of oppression and mismanagement. The Tribunal had declined to grant interim relief, a decision later upheld by the National Company Law Appellate Tribunal (NCLAT). The Supreme Court subsequently declined to interfere.

The proceedings later centred on Think & Learn's subscription to the rights issue. Aakash did not allot shares against the first tranche, citing concerns over the foreign source of funds. Think & Learn's shareholding was subsequently reflected at 10.99%, down from its earlier 25.75%. The NCLAT later allowed Think & Learn to subscribe to the second tranche to retain its 25.75% entitlement. It also directed Aakash not to undertake matters requiring a special resolution pending adjudication of the proceedings.

The parties informed the Bench that they have reached a settlement and would want to withdraw the appeals. The NCLAT allowed the withdrawal of appeals.