The Supreme Court on Wednesday raised concerns over the National Company Law Appellate Tribunal’s (NCLAT) decision to close insolvency proceedings against ed-tech giant Byju’s after it approved a Rs 158.9 crore settlement with the Board of Control for Cricket in India (BCCI), reported PTI.
A bench led by Chief Justice D.Y. Chandrachud criticised the NCLAT for not thoroughly examining the case, hinting that the matter could be sent back for fresh adjudication. The court highlighted the large-scale debt of Byju’s, which amounts to Rs 15,000 crore, questioning the selective settlement with BCCI.
The Supreme Court’s scrutiny follows an August 2 NCLAT ruling that provided significant relief to Byju’s by approving the settlement with BCCI and ending the insolvency proceedings. However, on August 14, the top court termed the verdict “unconscionable” and temporarily stayed its operation after a US-based creditor, Glas Trust Company LLC, appealed the decision.
Chief Justice Chandrachud questioned the rationale behind settling with one creditor—BCCI—using the personal assets of Byju’s founder, Riju Raveendran, while leaving other creditors unresolved. He noted that the NCLAT accepted this settlement without proper consideration of the source of funds.
The case will continue on Thursday, with arguments from Byju’s, represented by senior advocates Abhishek Singhvi and N.K. Kaul, and Glas Trust Company, represented by Kapil Sibal and Shyam Divan.
Byju’s, once the team sponsor for the Indian cricket team, defaulted on sponsorship payments to BCCI after mid-2022, triggering the insolvency process. While a settlement was reached, Glas Trust Company raised concerns that the settlement funds may have been diverted from loans extended to Byju’s.
The court’s decision on the case could have major implications for Byju’s, which has faced mounting financial challenges in recent months.
(With inputs from PTI)