The Supreme Court on Tuesday declined to issue an interim order to prevent the formation of a Committee of Creditors (CoC) in the ongoing insolvency proceedings against Byju’s, the troubled educational technology giant.
This decision emerges amid Byju’s legal strife following the National Company Law Appellate Tribunal’s (NCLAT) August 14 decision that revived insolvency proceedings by staying a prior settlement of Rs 158.9 crore with the Board of Control for Cricket in India (BCCI). The case underscores the complexity of corporate insolvencies involving large sums and multiple stakeholders.
Represented by Senior Advocate Abhishek Singhvi, Byju’s appealed to the bench led by Chief Justice D Y Chandrachud to delay the formation of the CoC, arguing that doing so would preemptively influence the resolution process. The Solicitor General Tushar Mehta, representing the BCCI, echoed this concern, suggesting that forming the CoC could render the ongoing legal challenges moot.
However, the court, which also includes Justices JB Pardiwala and Manoj Misra, scheduled a hearing for the plea on Thursday but refrained from issuing any immediate restraint against the CoC’s constitution.
This legal battle traces back to Byju’s default on a payment owed to the BCCI under a sponsorship agreement signed in 2019, which granted Byju’s branding rights on the Indian cricket team’s apparel. The financial obligations were met until mid-2022, after which Byju’s failed to complete payments amounting to Rs 158.9 crore.
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The NCLAT’s earlier verdict on August 2 had briefly provided relief to Byju’s by setting aside the insolvency proceedings and endorsing the settlement with the BCCI. This decision was halted by the Supreme Court’s recent intervention, which labeled the appellate tribunal’s judgment as potentially “unconscionable” and stayed its effects pending further review.
