Byju’s insolvency case: Supreme Court sets aside NCLAT decision

Chief Justice of India D.Y. Chandrachud said there was “grave deviation from procedure” in bringing the case to the NCLAT itself

The Supreme Court on Wednesday (October 23, 2024) set aside a judgment of the National Company Law Appellate Tribunal (NCLAT) allowing a ₹158 crore settlement between ed-tech firm Byju’s with the Board of Control for Cricket in India (BCCI).

A three-judge Bench headed by Chief Justice of India D.Y. Chandrachud said there was “grave deviation from procedure” in bringing the case to the NCLAT itself.

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The Bench upheld the locus standi of U.S.-based creditor Glas Trust Company LLC which had filed the appeal against the NCLAT decision. The court said Glas had raised “reasonable apprehensions”.

The judgment authored by Chief Justice Chandrachud directed ₹158 crore and accrued interest in an escrow account to be shifted to the Committee of Creditors (CoC). The CoC would deposit the amount in the escrow account. The court was careful not to comment on the merits of the case.

During back-to-back hearing in the case, the apex court had questioned whether the BCCI could be allowed to strike a “personal agreement” with Byju’s promoter and “walk away” with its money.

The U.S. lender had said, as a major financial creditor, it should have got priority in repayments.

Solicitor General Tushar Mehta, appearing for BCCI, had submitted that the ₹ 158 crore was offered by Riju Raveendran, Byju’s brother, from his personal assets. The money was not tainted.

The NCLAT, on August 2, granted relief to the embattled ed-tech firm by setting aside the insolvency proceedings after approving a ₹158.9 crore dues settlement with the BCCI. Byju’s had entered into a Team Sponsor Agreement with the BCCI in 2019.

Published - October 23, 2024 11:59 am IST