Supreme Court stays BYJU'S-BCCI settlement, revives insolvency proceedings
Chief Justice DY Chandrachud, who headed the three-judge bench, directed that the amount paid by BYJU'S to the BCCI be held in a separate escrow account pending further review.
In a win for BYJU'S' lenders, the Supreme Court of India has issued an interim order staying the National Company Law Appellate Tribunal's (NCLAT) decision that had allowed a settlement between the edtech company and the Board of Control for Cricket in India (BCCI) regarding outstanding dues of approximately Rs 158.9 crore.
The apex court has effectively put the insolvency proceedings against BYJU'S back on the table, reversing the NCLAT's earlier verdict that had set them aside.
Chief Justice DY Chandrachud, who headed the three-judge bench, directed that the amount paid by BYJU'S to the BCCI be held in a separate escrow account pending further review, according to Bar and Bench.
The top court's order comes in response to an appeal filed by the US-based Glas Trust Company LLC, representing some of BYJU'S creditors, challenging the NCLAT's approval for the settlement. A US court had also earlier denied GLAS Trust Company's request to block a settlement between BYJU'S and the BCCI.
Glas Trust has opposed the Rs 158.9-crore dues settlement with the BCCI over sponsorship of the Indian cricket team, alleging the money paid by Riju Ravindran (brother of BYJU'S chief Byju Raveendran) was "tainted" and was a case of "round-tripping".
While approving the settlement proceedings between the two parties earlier this month, NCLAT had included a caveat in its order, ruling that if Riju Ravindran breached his undertaking regarding the source of the settlement funds, the earlier insolvency order would be reinstated. The undertaking assured the court that the funds being used to clear the Rs 158 crore dues to the BCCI were sourced from his personal assets and were not in violation of any court orders.
While Byju Raveendran is the public face and driving force behind the edtech company, Riju has maintained a more behind-the-scenes role. He joined BYJU'S early on, initially assisting with operations and collections. His involvement was largely due to the need for a partner, and he wasn't actively involved in the company's growth strategy or day-to-day operations, The CapTable noted.
However, he has held various directorships within the company and its subsidiaries. This includes overseeing BYJU'S Alpha Inc, a US-based subsidiary created to house BYJU'S international assets, the report added.
On July 16, 2024, the National Company Law Tribunal (NCLT) admitted a petition filed by the cricket board to initiate a Corporate Insolvency Resolution Process (CIRP) against Think and Learn Pvt Ltd, the parent company of BYJU’S.
The NCLT's order acknowledged that the debt and default by BYJU’S were established, thus warranting the commencement of CIRP under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016.
(The copy was updated with additional details.)
Edited by Kanishk Singh