The August 2 verdict of the NCLAT had come as a huge relief for Byju’s as it had effectively put its founder Byju Raveendran back in control.
New Delhi: The supreme court on wednesday announced it will hear on September 17 an appeal by US-based creditor Glas Trust Company LLC. The appeal challenges a previous NCLAT ruling that paused insolvency proceedings against ed-tech company BYJU’s and approved a settlement of RS 158.9 crore in dues with the BCCI.
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A bench led by Chief Justice D.Y. Chandrachud along with Justices J.B. Pardiwala and Manoj Misra was asked by a team of lawyers to hear the plea urgently due to recent developments in the case. Senior advocate N.K. Kaul, representing the ed-tech company, emphasised the need for an expedited hearing.
Solicitor General Tushar Mehta, representing the BCCI along with senior lawyer Abhishek Singhvi, who is representing the ed-tech firm backed the submission. Justice Kaul noted that another plea related to the case is scheduled for a hearing on September 17. He suggested that the current plea be heard on the same day or both hearings be moved to this Friday.
We will hear both the pleas on September 17, the CJI said. Senior advocate Shayam Divan, appearing for the US-based creditor, said let the matters be heard together on September 17. Earlier on August 22, the bench had refused to pass an interim order to ensure that the committee of creditors (CoC) does not hold any meeting in pursuance of the insolvency proceedings against the embattled ed-tech firm. It had listed the plea for a final hearing on August 27.
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The bench had said the developments, which may take place in the meantime, can be negated if it finds there was no merit in the appeal of the US-based creditor against the judgment of appellate insolvency tribunal NCLAT.
The plea was mentioned earlier also on August 20 by Byju’s and the BCCI and the top court had then also refused to pass an interim order to restrain the Insolvency Resolution Professional (IRP) from constituting a committee of creditors (CoC) in the insolvency proceedings against the ed-tech firm.
In a major setback to Byju’s, the top court had on August 14 stayed the verdict of NCLAT, setting aside the insolvency proceedings against the ed-tech major and approving its Rs 158.9 crore dues settlement with the Indian cricket board.
The August 2 verdict of the NCLAT had come as a huge relief for Byju’s as it had effectively put its founder Byju Raveendran back in control.
The top court, however, had prima facie termed the NCLAT verdict as “unconscionable” and stayed its operation while issuing notices to Byju’s and others on the appeal of the ed-tech firm’s US-based creditor against the judgment of the insolvency appellate tribunal.
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The case stemmed from Byju’s default on a Rs 158.9 crore payment related to a sponsorship deal with the BCCI. The top court had directed the BCCI to keep a sum of Rs 158 crore it had received from Byju’s after a settlement in a separate escrow account till further orders.
“Issue notice. Pending further orders there shall be a stay of the impugned order of August 2 of NCLAT. In the meantime, BCCI shall maintain the amount of Rs 158 crore, which shall be realised in pursuance of a settlement, in a separate escrow account until further orders,” the bench had said. The NCLAT had approved the Rs 158.9 crore dues settlement with the BCCI and set aside the insolvency proceedings against Byju’s.
Byju’s had entered into a “Team Sponsor Agreement” with the BCCI in 2019. Under the agreement, the ed-tech firm got exclusive rights to display its brand on the Indian cricket team’s kit and some other benefits. Byju’s had to pay a sponsorship fee. The company met its obligations till the middle of 2022 but defaulted on subsequent payments of Rs 158.9 crore.
After insolvency proceedings were initiated, Byju’s entered into a settlement with the BCCI.
On July 16, the Bengaluru bench of the National Company Law Tribunal (NCLT) had admitted ‘Think and Learn’, Byju’s parent company, to the insolvency resolution process on a plea filed by the BCCI over default in payment of outstanding dues of almost Rs 158.9 crore.
While suspending the board of the ed-tech firm, the NCLT had appointed an interim resolution professional to run the operations of the company, suspended the company’s board of directors, and brought it under moratorium by freezing its assets. The US-based lenders suspected that the settlement amount was being diverted from the credit they had extended to Byju’s. (With PTI Inputs)
