Byju’s: SC agrees to include plea related to insolvency proceedings against Byju’s

He Supreme Court On Friday, it was agreed to include the appeal by the US-based court on the list of early hearings. creditor Glas Trust Company LLC against a judgment of the NCLATthat had been left insolvency proceedings against an educational technology company BYJU and approve its Rs 158.9 crore settlement with BCCI. The bench comprising Chief Justice DY Chandrachud and Justices JB Pardiwala and Manoj Misra was urged by senior advocate NK Kaul, appearing for the edtech department, that the case should be heard at the earliest.

Kaul said: “The only financing was provided by the developers and today no one has managed to get any external loans. Today we have to prove how unfair the request (of the American company) is.”

“I will include him in the list as soon as possible,” said the CJI, who has been unwell and in quarantine for the past few days.

Senior counsel Kapil Sibal, appearing for the US-based creditor, said he also wanted an early hearing.

Earlier, on August 22, the court had refused to issue an interim order to ensure that the committee of creditors (CoC) does not hold any meeting in pursuance of insolvency proceedings against the troubled edtech firm.

He had set a date for a final hearing on August 27.

The court had said that the developments, which may take place in the meantime, can be set aside if it finds that there is no merit in the US-based creditor’s appeal against the judgment of the insolvency appellate tribunal NCLAT. The petition was earlier mentioned on August 20 by Byju’s and BCCI as well and the apex court had also refused to issue an interim order restraining the Insolvency Resolution Professional (IRP) from constituting a committee of creditors (CoC) in the insolvency proceedings against the ed-tech firm.

In a major setback for Byju’s, the top court on August 14 stayed the NCLAT verdict, setting aside insolvency proceedings against the ed-tech major and approving its Rs 158.9 crore debt settlement with the Indian cricket board.

The August 2 NCLAT verdict came as a big relief for Byju’s as it effectively put its founder Byju Raveendran back in control.

However, the apex court had prima facie termed the NCLAT verdict as “unconscionable” and stayed its operation while issuing notices to Byju’s and others on the appeal by the US-based creditor of the ed-tech firm against the insolvency appellate tribunal’s judgment.

The case arose from Byju’s failure to pay Rs 158.9 crore in connection with a sponsorship deal with the BCCI.

The apex court had directed the BCCI to keep a sum of Rs 158 crore it had received from Byju’s after an agreement in a separate escrow account until further orders.

“A notice is issued. Pending further orders, the impugned order of the NCLAT dated August 2 shall be stayed. In the meantime, the BCCI shall keep the amount of Rs 158 crore, to be realised under an agreement, in a separate escrow account till further orders,” the court had said.

The NCLAT had approved the Rs 158.9 crore settlement with BCCI and set aside insolvency proceedings against Byju’s.

Byju’s had signed a ‘Team Sponsorship Agreement’ with the BCCI in 2019. Under the agreement, the edtech company got exclusive rights to display its brand on the Indian cricket team’s kit and a few other benefits. Byju’s had to pay a sponsorship fee. The company fulfilled its obligations till mid-2022 but defaulted on subsequent payments of Rs 158.9 crore.

After insolvency proceedings were initiated, Byju’s entered into a settlement with the BCCI.

On July 16, the Bengaluru bench of the National Company Law Tribunal (NCLT) admitted Byju’s parent company ‘Think and Learn’ to the insolvency resolution process following a petition filed by BCCI for defaulting on outstanding dues of nearly Rs 158.9 crore.

While suspending the board of directors of the education technology company, the NCLT appointed an interim resolution professional to run the company’s operations, suspended the company’s board of directors and placed it under moratorium by freezing its assets.

The US-based lenders suspected that the settlement amount was being diverted from the credit they had extended to Byju’s.