Failure to produce a valid ticket. Their ticket was not valid at the time of the check because the railcard and second person were not present. What had happened on the train when the ticket was not checked is not relevant.
The byelaw offence is a strict liability offence and intent does not come into it. To repeat what I quoted earlier "the fact of that offence is all that the Court would be considering" - and the fact is that the ticket was not valid at the time of the check.
I am really struggling to comprehend your apparent determination to continue to be wrong on this when there are numerous previous threads on the same subject that contain the information that will prove you wrong. If this gets to court and the OP tries to argue that they had a valid ticket earlier they will be wasting their time because it is not relevant. They may gain sympathy but it won't reduce their guilt.
My advice to the OP would be to wait for the TOC to get in touch and when they do to write a letter of apology for the error and ask to settle the matter by covering the costs they will have incurred. GTR are known to settle out of court so this is likely to be fruitful.
Which Byelaw are you proposing this would fall under? It cannot be Byelaw 18(1), as that relates to boarding the train. And it cannot be Byelaw 18(2), since OP handed over their ticket. Note that Byelaw 18(2) does not require a
valid ticket to be handed over, just
his ticket (his, i.e. the traveller's). That is a very important distinction.
Unequivocally recommending grovelling and dobbing oneself in it for an out of Court settlement is not correct at this stage - no Byelaws offence has been committed and thus GTR cannot prosecute for that. Hopefully it is possible to make GTR be 'led up the garden path', as it were, to taking an nonexistent Byelaws offence to Court, and then it will be too late for them to change tack to RoRA.
I am far from wrong: reading the Byelaw carefully would enable you to see where you are missing the key phrase. Because a Byelaws offence cannot be committed, intent - and failure to pay the correct fare - would have to be present for the only viable alternative, which is a RoRA prosecution.