New Delhi — In a significant ruling, the Supreme Court of India has set aside the National Company Law Appellate Tribunal (NCLAT) order that permitted edtech giant Byju's to settle its dues with the Board of Control for Cricket in India (BCCI). The decision came in light of ongoing insolvency proceedings against Byju's, triggered by the company's failure to repay over ₹158 crore owed to its creditors. The Supreme Court bench, led by Chief Justice D.Y. Chandrachud and including Justices J.B. Pardiwala and Manoj Misra, criticized the NCLAT for not thoroughly assessing the implications of its prior judgment.
The apex court mandated that funds deposited by the BCCI into a separate escrow account be redirected to the Committee of Creditors (CoC) escrow account as part of the restructuring process. On August 2, the NCLAT had approved Byju’s settlement with the BCCI, dismissing claims from U.S.-based lenders who alleged that the funds earmarked for the repayment were "tainted" and sourced from "stolen" money. The NCLAT’s ruling, however, stipulated a crucial caveat should Byju's fail to make timely payments as outlined in their undertaking, the insolvency proceedings would automatically resume.
The undertaking highlighted a recent payment of ₹50 crore made by Byju's founder, Byju Raveendran, on July 31, with an additional ₹25 crore scheduled for August 2, and the remaining balance promised via RTGS in the following week. The debts arose primarily from jersey sponsorship contracts with the BCCI, raising questions about the company's financial management.
The saga began on July 16, when the Bengaluru Bench of the National Company Law Tribunal (NCLT) accepted an insolvency petition filed by the BCCI against Think and Learn Private Ltd, Byju’s parent company. Subsequently, Raveendran appealed to the Chennai Bench of the NCLAT to contest the NCLT's decision. As the legal battle continues, the Supreme Court's ruling emphasizes the meticulous examination required in corporate settlements, particularly in high-stakes cases involving prominent financial commitments. The outcome will undoubtedly have significant implications for Byju’s and its future dealings with creditors and stakeholders.
