The Supreme Court has reserved its verdict regarding the challenge to the National Company Law Appellate Tribunal’s (NCLAT) decision to halt the insolvency proceedings against the prominent ed-tech company, Byju’s. The plea, initiated by US-based Glas Trust Company LLC, contests the NCLAT’s halting of proceedings and its approval of a financial settlement between Byju’s and the Board of Control for Cricket in India (BCCI).
During the proceedings, the bench headed by Chief Justice D Y Chandrachud, alongside Justices JB Pardiwala and Manoj Misra, directed the insolvency resolution professional (IRP) to maintain the status quo and refrain from proceeding with the creditors’ committee meeting concerning Byju’s case until a final judgment is delivered.
The controversy centers on the NCLAT’s August 2 decision which sided with Byju’s by setting aside ongoing insolvency actions and recognizing a Rs 158.9 crore settlement with the BCCI. This decision temporarily reinstated Byju’s founder, Byju Raveendran, at the helm of his company’s operations. However, the Supreme Court, on August 14, labeled the NCLAT’s decision as “unconscionable,” subsequently staying the order and noting potential lapses in the NCLAT’s judgment process.
The Supreme Court’s inquiry raised questions about whether the NCLAT fully considered all legal implications of its decision to end the insolvency proceedings, suggesting the possibility of remanding the case for a new round of adjudication. This indicates the high court’s commitment to ensuring that insolvency processes are conducted fairly and with due consideration of all creditors’ interests.
