The Supreme Court of India, in a pivotal judgment on Wednesday, overturned the National Company Law Appellate Tribunal’s (NCLAT) decision that had previously halted insolvency proceedings against the ed-tech giant Byju’s. The apex court’s bench, led by Chief Justice D Y Chandrachud and comprising Justices J B Pardiwala and Manoj Misra, also nullified the NCLAT’s approval of Byju’s Rs 158.9 crore settlement with the Board of Control for Cricket in India (BCCI).
In its directive, the Supreme Court has ordered BCCI to deposit the aforementioned settlement amount with the committee of creditors, signaling a move to re-evaluate the financial dealings and obligations of Byju’s under the scrutiny of insolvency proceedings.
The decision arose from an appeal filed by the US-based creditor, Glas Trust Company LLC, challenging the NCLAT’s August 2 order that provided significant relief to Byju’s by setting aside the ongoing insolvency proceedings. This earlier verdict had been a substantial boon to Byju’s, reinstating founder Byju Raveendran’s control over the company’s financial and operational management.
However, the Supreme Court, on August 14, criticized the NCLAT ruling as “unconscionable,” placing a stay on its operation and issuing notices to Byju’s and other related parties. The top court’s latest verdict underscores a critical reassessment of the NCLAT’s decision-making, particularly criticizing the tribunal for not applying its mind sufficiently when terminating the insolvency proceedings against Byju’s.
