Kerala HC dismisses plea for probe into irregularities in Byju’s insolvency

A Division Bench of the Kerala High Court recently dismissed an appeal by Voizzit Technology Private Limited for an investigation into alleged malpractices by the Interim Resolution Professional and others in the insolvency proceedings of Think and Learn Private Ltd., popularly known as Byju’s, an ed-tech company. Voizzit has been in a legal battle with Byju’s over ownership of their assets ever since the ed-tech company defaulted on Voizzit’s loan of $100 million.

The appeal was made against the order of Justice G. Gireesh, who had refused to direct the Central Bureau of Investigation, the Directorate of Enforcement, and the National Investigation Agency to investigate the alleged irregularities such as ‘the involvement of foreign entities and jurisdictions in the manipulation of insolvency processes, diversion and alienation of Indian-origin assets, unauthorised control over critical digital infrastructure, and extraction of capital and intellectual property outside India’, among others.

Two reasons

The Single Bench of the Kerala High Court had held that the petitioners had approached the wrong forum for the writ petition and that it was not maintainable. There were two reasons given for this decision; one, the petitioner had filed a public interest litigation seeking investigation into the 'malpractices.’ When the case was withdrawn, they had not requested permission to file a fresh petition, and two, they had also registered a complaint with the High Grounds Police Station, Bengaluru, wherein the Karnataka High Court had stayed that investigation.

The Division Bench of Justices K. Natarajan and Johnson John agreed with the ‘no interference’ order of the Single Bench, stating that it could not intrude in the proceedings already pending before the Karnataka High Court.

Earlier, Voizzit had also filed a complaint before the CBI and ED, seeking a probe into alleged violations under the Foreign Exchange Management Act, 1999, cross-border fraud, criminal conspiracy and abuse of insolvency processes, after the Karnataka High Court’s order to stay the investigation by Bengaluru Police.

During 2018 and 2022, Byju’s expanded globally as an ed-tech giant, with overseas investments exceeding $1.42 billion, and was operated with India as its base. The company is currently undergoing bankruptcy proceedings with the Insolvency and Bankruptcy Board of India.