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NCLAT's decision to stop bankruptcy proceedings against Byju's rejected; Know what Supreme Court said
Byju's-BCCI, Supreme Court of India Decision: The tribunal had accepted the settlement of about Rs 158 crore between Byju's and the Board of Control for Cricket in India (BCCI). The court has overturned this decision. The Supreme Court said that the amount of Rs 158 crore will be deposited in the escrow account of the committee of creditors and it will be retained by the creditors.
It has also set aside an order passed by the National Company Law Appellate Tribunal that stayed bankruptcy proceedings against ed-tech company Byju's. It has also overturned a relief given by the tribunal on a Rs 158-crore compromise between Byju's and BCCI. Supreme Court said that the amount of Rs 158 crore shall be deposited in the escrow account of the committee of creditors and it shall be controlled by the creditors.
A bench comprising Chief Justice DY Chandrachud, Justice JB Pardiwala and Justice Manoj Mishra pronounced the verdict on an appeal filed by US company Glass Trust Company LLC against the order passed by the NCLAT.
The court noted that on closing the insolvency proceeding against the technology company in the education sector, no discretion has been exercised by the NCLAT and directed a fresh decision in the case.
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The NCLAT had on August 2 ordered the closure of insolvency proceedings against Byju's after approving an outstanding settlement of Rs 158.9 crore with the Board of Control for Cricket in India. A big relief in its wake, it amounted to giving the control of the company back to its founder Byju Raveendran.
However, the respite did not last long as the apex court stayed the NCLAT order on August 14, giving a setback to Byju's. The case relates to the default in the payment of Rs 158.9 crore by Byju's pertaining to a sponsorship deal with the BCCI.
