New Delhi: The Supreme Court on Wednesday set aside the order of the National Company Law Appellate Tribunal (NCLAT) which allowed the withdrawal of the corporate insolvency resolution process against Byju's by paying Rs158 crore to BCCI.
A Bench comprising Chief Justice of India D Y Chandrachud, Justice JB Pardiwala and Justice Manoj Misra asked Byju's and other parties to approach the Committee of Creditors (CoC) to pursue their remedies.
The Court’s order came while hearing an appeal filed by US-based financial creditor Glass Trust challenging the NCLAT's decision, which had ordered to halt insolvency proceedings initiated against Think & Learn, the parent company of Byju's.
The Bench said that the NCLAT has erred in its order as the creditors of Byju's, other than the Board of Cricket Control for India (BCCI) would be left in the lurch if the insolvency process were to be halted.
The insolvency resolution proceedings against Byju's were initiated in June by the National Company Law Tribunal (NCLT) in Bengaluru on a plea by the BCCI.
The BCCI claimed that Byju's owed it ?158 crore as part of cricket jersey sponsorship deals.
However, BCCI later submitted that it had reached a settlement with Byju's, whereby Riju Raveeendran, the brother of Byju's founder Byju Raveendran, would clear these dues out of his personal funds.
Recording this settlement, the NCLAT at Chennai had closed the insolvency proceedings against Byju's.
This was opposed by Glass Trust, which had raised concerns.
On August 22, it declined to defer or order any stay on the operations of a Committee of Creditors (CoC) formed to oversee the corporate insolvency resolution process (CIRP).
Senior Advocate Shyam Divan appearing for Glas Trust opposed the NCLAT’s decision and said, “We (Glas Trust) have been dropped entirely from the committee of creditors without any notice to us," Divan protested.
“Glass Trust had a 99.5 per cent stake in the company ..we cannot be removed…Personal money cannot be recovered under Section 12A,” Senior Advocate Kapil Sibal (also for Glas Trust) argued.
The Bench suggested that the dispute over the removal of Glas Trust from the CoC could be pursued before the NCLAT.