The Karnataka High Court on Wednesday disposed two writ appeals realated to Byju’s ongoing legal battle, directing the edtech firm to maintain the status quo on share allotments and transactions until the National Company Law Tribunal (NCLT) reaches a decision.
A division bench comprising Chief Justice NV Anjaria and Justice KV Aravind heard the appeals against a single judge order that had set aside an NCLT directive restraining Byju’s from proceeding with its second rights issue.
Without delving into the merits of the case, the High Court issued several crucial directions. It ordered all parties to maintain the status quo regarding the subject matter of the dispute as of July 5. Additionally, it directed Byju’s to refrain from allotting shares in the interim, subject to the NCLT’s final order. Any share allotments or related transactions made between July 2-5 are to remain subject to the NCLT’s final order.
The bench further instructed the NCLT to consider the case independently on remand, without being influenced by previous observations. The tribunal was directed to complete the remand proceedings expeditiously, before July 31.
The court clarified that it had not expressed any opinion on the merits of the case.
This order comes as Byju’s faces multiple legal challenges from investors and creditors. Earlier this week, the NCLT directed the company to pay employee salaries or face an audit. The tribunal also scheduled a rehearing on July 9 regarding the stay on the second rights issue and a contempt petition filed by investors.
The ongoing dispute centers around allegations by a group of dissatisfied investors of oppression and mismanagement by Byju’s management, including contentious share allotments and rights issues.