The National Company Law Tribunal (NCLT), Bengaluru Bench, has rejected a plea filed by the resolution professional (RP) of Think & Learn Private Limited, the parent company of Byju’s, seeking to stay the extraordinary general meeting (EGM) of Aakash Educational Services Limited (AESL) and the proposed rights issue scheduled to be discussed at the meeting. The Bench, comprising Judicial Member Sunil Kumar Aggarwal and Technical Member Radhakrishna Sreepada, passed the order on October 17, declining to grant interim relief to Byju’s.
Byju’s, which holds about 25.75 percent equity in AESL, had filed the petition under Sections 241 and 242 of the Companies Act, 2013, alleging oppression and mismanagement by AESL. The company contended that the board of AESL had convened meetings in violation of Part B of its Articles of Association (AoA), which, according to Byju’s, guaranteed its participation and veto rights in key decisions. It was alleged that the proposed rights issue would dilute Byju’s shareholding to below five percent, causing substantial loss to its economic interest and adversely affecting the ongoing corporate insolvency resolution process (CIRP).
The resolution professional representing Byju’s argued that AESL’s actions were intended to marginalize Byju’s and deprive it of its rights as a significant shareholder. It was claimed that the EGM and the rights issue were being pursued in haste without due consideration of the AoA, thereby amounting to oppressive conduct detrimental to minority shareholders. The RP further urged the tribunal to stay the meeting and prevent any steps toward the rights issue until the pending disputes between the parties were resolved.
AESL opposed the plea, contending that the fresh petition was not maintainable since a similar petition on related issues was already pending before the tribunal. The company maintained that the Articles of Association relied upon by Byju’s had lost their enforceability in their earlier form, as the specific framework governing rights and obligations had expired. AESL argued that a rights issue cannot be considered unfair or oppressive merely because a shareholder elects not to participate or may face dilution as a result. The company further asserted that halting the EGM or the rights issue would unjustly restrict its independent business decisions.
The NCLT agreed with AESL’s position, observing that the issues raised in the current petition substantially overlapped with those in the earlier petition. The tribunal held that Byju’s had failed to establish sufficient grounds for granting an interim injunction. Consequently, it refused to stay either the EGM or the rights issue, allowing AESL to proceed as planned. The matter has been posted for further hearing on November 12, when it will be taken up alongside the earlier petition.
This ruling signifies the tribunal’s reluctance to interfere with a company’s corporate decisions in the absence of clear evidence of oppression or illegality. It also underscores that shareholders, even significant ones, cannot automatically claim protective relief when their dilution arises from lawful corporate actions such as a rights issue.
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