SC Sets Aside NCLAT Order To Close Insolvency Proceedings Against BYJU’S
by Bhupendra Paintola · Inc42SUMMARY
- The apex court directed BCCI to deposit the settlement amount to the committee of creditors
- On August 2 NCLAT gave relief to BYJU’S by approving INR 158 Cr settlement with BCCI and closing the insolvency proceedings
- The apex court on September 26 reserved its verdict on the petition filed by the US-based lenders of BYJU’S challenging the NCLAT decision
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The Supreme Court of India has set aside the order of National Company Law Appellate Tribunal (NCLAT) which had stopped insolvency proceedings against the embattled edtech major BYJU’S.
A jury constituting Chief Justice D Y Chandrachud, justice J B Pardiwala and justice Manoj Misra also nullified the settlement agreement between BYJU’S and the Board of Control for Cricket in India (BCCI) amounting to INR 158 Cr.
The apex court directed BCCI to deposit the settlement amount to the committee of creditors, indicating that there is a need for further transparency and scrutiny around BYJU’S financial obligations.
The development follows the August 14 remarks made by SC in this case, wherein the apex court criticised NCLAT’s August 2 ruling as “unconscionable,” and pointed out the procedural irregularities in which the case was carried out by NCLAT.
Notably, on August 2 NCLAT gave relief to BYJU’S by approving INR 158 Cr settlement with BCCI and closing the insolvency proceedings.
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It is pertinent to note that the apex court on September 26 reserved its verdict on the petition filed by the US-based lenders of BYJU’S challenging the NCLAT decision to stop insolvency proceedings against the edtech firm.
In September, the Delaware Supreme Court (SC) in another hearing ruled in favour of BYJU’S US lenders establishing that the edtech company defaulted on a $1.2 Bn term loan B.
This comes at the heart of the consortium of US-based lenders claiming dues to the tune of INR 11,432 Cr ($1.36 Bn) from the company.
Apart from this, the edtech major is trying to douse fires on several fronts including worsening cash crunch, insolvency proceedings, multiple legal cases and mass layoffs.
Making things worse, BYJU’S net loss soared 81% to INR 8,245.2 Cr in FY22 from 4,564 Cr in FY21.