SC Protects TLPL’s 25.7% Holding in Aakash During Insolvency Battle

The legal dispute between Aakash Educational Services Ltd (AESL) and Think & Learn Pvt Ltd (TLPL) , the parent company of Byju’s, has reached a critical juncture, with the Supreme Court stepping in to safeguard shareholder interests amid ongoing insolvency and corporate governance concerns. A bench comprising Justices P. S. Narasimha and Alok Aradhe recorded AESL’s undertaking that TLPL’s 25.7% stake in Aakash will remain secured until the National Company Law Appellate Tribunal (NCLAT), Chennai , decides a pending interlocutory application. The court also granted TLPL one week to subscribe to the second tranche of Aakash’s ₹240 crore rights issue, disposing of the special leave petition based on this assurance.

The dispute stems from AESL’s decision to raise funds through a rights issue, which TLPL challenged before the National Company Law Tribunal (NCLT), Bengaluru , alleging oppression and mismanagement. TLPL, currently undergoing insolvency proceedings after admission of a plea against Byju’s, argued that the capital raise could dilute its holding and erode share value. The insolvency context has intensified scrutiny, as creditor interests and corporate control considerations intersect with shareholder rights.

Earlier, the NCLAT permitted Aakash to proceed with the rights issue and later allowed TLPL to subscribe to shares up to its original 25.7% entitlement. It also directed AESL not to undertake decisions requiring special resolutions until the dispute is adjudicated. The tribunal’s intervention came after TLPL’s stake was shown as 10.99% following the first tranche, in which TLPL remitted funds but was not allotted shares due to concerns over the foreign source of funds.

The Supreme Court had previously declined to halt the rights issue while clarifying that its observations would not affect the final outcome of pending proceedings. By recording AESL’s undertaking now, the court has sought to balance the company’s urgent funding needs with the protection of TLPL’s shareholder rights. AESL has argued it requires immediate capital to sustain operations serving approximately 3.5 lakh students and 10,000 employees.

The case underscores broader concerns about shareholder protection during insolvency proceedings, the extent of creditor influence, and the governance of strategically significant education assets. The NCLAT’s forthcoming decision will be crucial in determining the preservation of TLPL’s stake and the financial restructuring path for Aakash amid Byju’s ongoing financial crisis.