SC sets aside NCLAT ruling that halted BYJU’S’ insolvency proceedings
The apex court directed the Board of Control for Cricket in India to deposit the Rs 158 crore settlement amount into the escrow account of the Committee of Creditors.
In a significant setback for edtech firm BYJU’S, the Supreme Court of India on Wednesday set aside the NCLAT’s August ruling that approved a Rs 158 crore settlement between BYJU’S and the BCCI and halted insolvency proceedings against the firm.
The apex court directed the Board of Control for Cricket in India (BCCI) to deposit the Rs 158 crore settlement amount into the escrow account of the Committee of Creditors (CoC).
The Supreme Court ruling was delivered by a bench headed by Chief Justice DY Chandrachud, which included Justices JB Pardiwala and Manoj Misra.
The SC bench ordered a new adjudication in the case, stating that the National Company Law Appellate Tribunal (NCLAT) did not sufficiently evaluate the situation when it ruled, closing the corporate insolvency resolution process (CIRP) against BYJU’S parent company, Think and Learn Private Limited (TLPL).
Glas Trust, representing a group of BYJU’S creditors, challenged the NCLAT's approval of the settlement with the BCCI in the Supreme Court, following the order in August.
BYJU’S, which dodged a potential “death” after the NCLAT approved the settlement between the edtech firm and the BCCI on August 2, faced insolvency following an interim order by the Supreme Court of India on August 14 which stayed the appellate tribunal’s decision.
The events began on July 16 when the National Company Law Tribunal (NCLT) in Bengaluru admitted a plea filed by the BCCI, seeking to initiate a CIRP for TLPL.
CIRP, which stands for Corporate Insolvency Resolution Process, is a legal process under the Insolvency and Bankruptcy Code (IBC), 2016, aimed at resolving insolvency issues faced by corporate debtors in a time-bound manner, typically through restructuring or liquidation.
The edtech company, which has been dragged to multiple courts in India and the US by its biggest lenders and investors, has been battling a liquidity crisis for more than a year.
Aakash Educational Services Limited, which was acquired by BYJU’S in 2021, has filed a claim of Rs 1,400 crore against it, according to a document seen by YourStory. Besides Aakash, the company also owes Rs 20.3 crore to InCred Financial Services, Rs 47 crore to Aditya Birla Finance, and over Rs 11,000 crore to Glas Trust.
Another document on IBBI’s website further showed the tax departments from the Government of India and the Karnataka government have put forth a claim of over Rs 848 crore as part of CIRP.
BYJU’S owes close to Rs 380 crore to operational vendors as of August 19, 2024, per information available on the Insolvency and Bankruptcy Board of India’s website.
Amidst this turmoil, BYJU’S employees are anxiously watching the developments, hoping their careers won’t suffer further damage given the uncertainty surrounding the edtech company. Approximately 3,000 employees had lodged claims with the Interim Resolution Professional.
Edited by Suman Singh