The Supreme Court on Wednesday set aside the National Company Law Appellate Tribunal (NCLAT) order, which had closed the insolvency proceedings against embattled edtech firm Byju after approving its settlement with the Board of Control for Cricket in India (BCCI) in connection with the repayment of dues of over Rs 158 crore.
A bench, headed by CJI D.Y. Chandrachud and comprising Justices J.B. Pardiwala and Manoj Misra, ordered that the amount deposited by the BCCI in the separate escrow account pursuant to its interim order will have to be transferred to the escrow account of the Committee of Creditors (CoC).
Observing that the NCLAT did not apply its mind while delivering the impugned decision, the apex court directed a fresh adjudication on the insolvency proceedings.
In an order passed on August 2, the company appellate tribunal gave its nod to Byju’s settlement with BCCI and repelled the allegations by the US-based lenders of the edtech firm which claimed that the repayment to BCCI was “tainted: and funded with “stolen” money, saying that the lenders failed to provide any evidence to substantiate their claims.
However, the NCLAT order came with a rider that in case of failure of timely payment of the dues on the specific dates submitted in the undertaking, the insolvency proceedings would be revived automatically.
“In view of the undertaking given and the affidavit, the settlement between the parties (is) approved and as a result appeal succeeds and impugned order (passed by the NCLT) is set aside,” said the order dictated in the open court by a two-member Chennai Bench of the NCLAT.
The undertaking stated that Byju’s founder Byju Raveendran made a payment of Rs 50 crore on July 31. Another Rs 25 crore will be paid by August 2, and the remaining amount will be paid through RTGS by next week.
Byju’s accumulated the dues under jersey sponsorship deals with the BCCI. The appellate tribunal had asked Byju’s to file an affidavit or an undertaking to clarify that the money due to its financial creditors will not be used to pay its operational creditors such as the BCCI.
On July 16, the Bengaluru Bench of the NCLT admitted an insolvency plea filed by the BCCI against Think and Learn Private Ltd, the parent company of Byju’s. A week later, Raveendran filed an appeal before the Chennai Bench of the NCLAT in the matter.
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