A US court's $1.07-billion default judgment against Byju Raveendran can't be enforced directly in India because the US isn't a "reciprocating territory." Creditors must file a new case in an Indian court.
A $1.07 billion default judgment against Byju Raveendran by a Delaware bankruptcy court faces significant legal obstacles before it can be enforced in India, according to legal experts, highlighting the complexities of cross-border debt recovery and the limits of US court jurisdiction over foreign nationals.
The ruling, issued November 20 after the edtech entrepreneur failed to comply with discovery orders, represents one of the largest personal liability judgments against an Indian startup founder but may carry little immediate practical weight in his home country.
The judgment against Raveendran, founder of Think and Learn Private Limited (TLPL), parent company of troubled edtech firm Byju's, came after Byju's Alpha and US lender GLAS Trust Company LLC sought repayment of funds they allege were improperly diverted.
The court found Raveendran had been evasive on multiple occasions and awarded $533 million on one count and $540.6 million on three others, while also ordering a full accounting of the disputed Alpha funds.
Byju's Alpha was incorporated in Delaware in 2021 as a special-purpose vehicle for a $1.2 billion term loan.
Lenders later took control and alleged $533 million was "roundtripped" to Raveendran and his affiliates -- a claim the founders reject.
Why can't a US default judgment be enforced directly in India?
Yet enforcing that judgment in India will require GLAS Trust to navigate a legal framework that offers no shortcuts for US court decisions.
India doesn't recognise the United States as a “reciprocating territory” under its civil procedure code, meaning the Delaware ruling cannot be executed directly.
Instead, creditors must file a fresh civil suit in Indian courts, where the foreign judgment serves as evidence rather than a binding order.
Legal sources in India close to the founders said the judgment's vulnerabilities are compounded by its nature as a default decree.
"The US default judgment against Mr. Raveendran, rendered without a trial on merits and getting appealed, has no automatic enforceability in India. Indian law requires a fresh civil suit for any foreign decree from a non-reciprocating country like the United States, and our courts have consistently held that such default judgments are not conclusive," the sources told Business Standard.
"The Indian legal system guarantees every individual the right to a full defence and fair trial and any attempt to enforce this judgment here would face serious legal and constitutional scrutiny."
How do Indian courts evaluate foreign judgments under Section 13?
Indian courts apply strict tests under Section 13 of the Civil Procedure Code before recognising foreign judgments, and can refuse recognition if the judgment wasn't rendered on merits or violated natural justice principles.
"It is important to note that this judgment was delivered by the lowermost court in the US and remains subject to appeal and a proper trial based on evidence and cross-examination," the sources added. "Further, this order has no bearing whatsoever on the ongoing proceedings in India."
Salman Waris, managing partner at tech law firm TechLegis Advocates & Solicitors, said enforcing the Delaware judgment is challenging because US rulings have no automatic force in India.
"Indian courts treat US judgments as foreign decrees, and the success rate for recognition remains low -- often just 20 per cent to 30 per cent," Waris said.
He noted GLAS would have to file a fresh execution suit in an Indian court using the apostilled US judgment as evidence before targeting Raveendran's domestic assets.
Can GLAS still pursue enforcement through Indian courts?
While acknowledging the procedural hurdles for enforcement prospects, Sonam Chandwani, managing partner at KS Legal & Associates, said the specific circumstances of the Delaware ruling could influence how Indian courts approach recognition.
"The enforcement of a Delaware money judgment against an Indian national is neither automatic nor straightforward, but it is legally feasible through established recognition and execution proceedings in India," Chandwani said.
"GLAS Trust would be required to approach an Indian court and seek recognition of the US decree, where Raveendran may raise objections limited to jurisdiction, due process, and compliance with Section 13 of the CPC. However, where the record reflects that he had notice, representation, and repeated opportunities to comply, Indian courts are less inclined to treat the judgment as a mere ex parte decree and more likely to view it as a consequence of wilful non-cooperation."
Chandwani noted that if the judgment is recognised, GLAS could proceed to attach Raveendran's Indian assets, including personal properties and equity interests.
"Although the process will be protracted and contested, a Delaware judgment grounded in contempt and discovery obstruction carries substantial persuasive weight, and Indian courts may order interim protection if there is evidence of dissipation or concealment of assets," she said.
What legal recourse does Raveendran have in the US?
Raveendran's legal team has announced plans to appeal in a higher court, arguing he was denied the right to present a defence. His senior litigation advisor, J Michael McNutt of Lazareff Le Bars Eurl, said the court "ignored relevant facts" and that "Byju Raveendran must be allowed to present a defence and has been denied the right to do so by expediting the trial."
The distinction between a default judgment and one rendered after trial becomes critical in any appeal.
Chandwani said “a default judgment imposed as a sanction for sustained discovery violations and contempt stands on a markedly different footing from a judgment rendered after trial, as the court effectively concludes that the defendant's conduct has frustrated the adjudicatory process and thereby forfeited his right to contest the claims."
"Appellate review of such sanctions is highly deferential, and Raveendran's prospects of reversal are limited unless he can demonstrate that non-compliance stemmed from genuine impossibility rather than deliberate refusal."
McNutt said Raveendran's team plans to file counter-claims seeking at least $2.5 billion in damages before year-end.
"GLAS Trust controls Think & Learn Private Limited and the Resolution Professional of TLPL should be confronted and held responsible to explain the use of these funds," he said.
Feature Presentation: Rajesh Alva/Rediff
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