NEW DELHI: The Supreme Court has overturned the National Company Law Appellate Tribunal’s decision that approved Byju’s settlement of Rs 158.9 crore dues with the Board of Control for Cricket in India (BCCI).
The top court has instructed BCCI to deposit the settlement amount with the committee of creditors.
The ruling comes after Solicitor General Tushar Mehta’s last-minute appeal to retain the funds in the existing escrow account.
The bench, led by Chief Justice D Y Chandrachud, also overruled the National Company Law Appellate Tribunal’s order that had halted insolvency proceedings against the troubled ed-tech company Byju’s.
The bench noted, “There was no formal application made for withdrawal, the first respondent who was a former director of the corporate debtor had moved NCLAT directly. Despite these grave deviations, NCLAT still approved the settlement,” The SC said, according to the Bar and Bench.
“We hold that recourse to Rule 11 of NCLAT Rules was not warranted and exercise of inherent powers cannot be done to subjugate legal process and the NCLAT should have stayed the composition of Committee of Creditors (CoC) instead.” SC added while delivering the judgment.
The NCLAT’s earlier verdict, issued on August 2, had halted insolvency proceedings against Byju’s, providing temporary relief to the company amid ongoing financial difficulties.
In its ruling, the NCLAT approved Byju’s settlement of dues to the BCCI, a move that effectively restored control of the company’s finances and operations to its founder, Byju Raveendran.
However, this relief proved to be short-lived. The Supreme Court, led by Chief Justice DY Chandrachud, along with Justices JB Pardiwala and Manoj Misra, reversed NCLAT’s order.
According to a PTI report, SC observed that the NCLAT did not apply its mind while closing the insolvency proceedings against the ed-tech major, the bench ordered fresh adjudication in the case.
The appeal before the Supreme Court was filed by Glas Trust Company LLC, a US-based creditor of Byju’s, which had contested the NCLAT’s ruling. The bench concluded that the NCLAT’s decision to close insolvency proceedings without sufficient deliberation was unjustifiable.