NCLAT sends Aakash’s AoA amendment case back to NCLT

New Delhi, Dec 7 (PTI) The National Company Law Appellate Tribunal has refused to lift the stay on the NCLT order barring amendments to the articles of association of Aakash Educational Services, a subsidiary of debt-ridden edtech major Byju.

The Chennai Bench of the National Company Law Appellate Tribunal (NCLAT) on Friday disposed of a petition filed by Manipal Health Systems and Aakash Educational Services seeking an application before the National Company Law Tribunal seeking quashing of the order passed on November 20, 2024.

The two-member bench gave them a week’s time to file the application and directed the National Company Law Tribunal (NCLT) to take a decision within three weeks.

Furthermore, a 14-page NCLAT order said that status quo will be maintained in the case as directed by the Supreme Court.

Aakash Educational Services was scheduled to hold an extraordinary general meeting (EGM) on November 20 to consider and approve changes in the AoA, but it faced opposition from minority shareholders.

However, on the same day, November 20, 2024, the NCLT Bengaluru bench stayed the resolution related to the amendment to the Aakash Educational Services AoA, which was allegedly aimed at diluting the rights of minority shareholders, including Blackstone-backed Singapore VII Topco.

Later, Akash challenged the decision in the Karnataka High Court, which upheld the NCLT ruling.

However, the Supreme Court later blocked the amendment of the Articles of Association (AoA) on November 29.

The Supreme Court directed Akash to approach NCLAT within seven days and said the decision to stay the implementation of the EGM resolution regarding changes in AoA will remain in effect till the appeal is heard by the Appellate Tribunal.

On Friday, after hearing appeals filed by both Akash Educational Services and Manipal Health System, NCLAT noted that it “failed to consider the arguments and reasons assigned” while passing the stay order.

NCLAT said: “Specification of grounds is the basic guiding principle for the court to prove the logical rationality of the circumstances arising out of the particular circumstances, the right to pass an order impeaching any party to the proceedings”.

The NCLAT further said that both parties have agreed that by way of a consent order, the appellant may file an appropriate leave application before the Academic Adjudication Authority (NCLT) seeking quashing of the order dated November 20, 2024.

The Court of Appeal said it could be filed within one week and “if filed within the said period, the Tribunal is invited to rule on the said leave of absence application taking into account all disputes, even those raised in the Company’s appeal” and three weeks thereafter. time”.

NCLAT clarified that whatever its opinion on the matter may be, it will not have any influence while NCLT decides on the stay application.

In response to petitions filed by Singapore’s VII Topco I Pte Ltd and others under Sections 241, 242 and 244 of the Companies Act, the NCLT stayed the changes in the AOA, which protect the rights of minority shareholders.

They demanded that Aakash Educational Services be directed not to discuss agenda item 8 at the EGM, which was for “changes” in the AoA.

The petitioners, including Singapore VII Topco I, which holds 6.97% of Aakash Institute’s shares, claimed that their rights were being oppressed.