On September 6, 2024, the Supreme Court of India entertained the petition of Glas Trust Company LLC, a creditor of the US against the NCLAT judgment, which had restrained the insolvency proceedings against the ed-tech company called BYJU’s and sanctioned its settlement of dues of INR 158.9 crores with BCCL in favor of the recovery unit.
Senior counsel N.K. Kaul instructed that this matter needs to be looked into on an urgent basis, who represented the ed-tech giant before the Bench of Chief Justice D.Y. Chandrachud and Justices J.B. Pardiwala and Manoj Misra.
MR. Kaul stated, ‘The only source of funding was from the promoters and today no one has raised any external loans. I am required to demonstrate today how wrong the petition of this American company is.’
‘I shall do to ensure that it is listed for hearing at the earliest for which Sardar In charge Hitendra is required,’ said the CJI who has severe cold and has been in Quarantine for the last few days.
Senior advocate Kapil Sibal, appearing for the U.S.-based creditor, said it also wanted an early hearing.
Earlier on August 22, the Bench had also declined to pass any order of interim relief to take this step that the committee of creditors (CoC) shall not conduct a single meeting regarding the insolvency proceedings of the troubled ed tech company. It had posted the plea for final arguments on August 27.
The Bench had stated that the changes may be done in the period, but if this view is not sustained by the appeal filed by the creditor in America, whose matter was drawn against the order passed by the appellate tribunal of the insolvency law, the tribunal was the NCLAT and any appeal was screened.
Byju’s and the Bd breached the interim ruling on August 20 regarding some motions and the hierarchy’s seat restrained from issuing relief decrees within interconnections concerning committees of creditors (CoC) constitution in subject insolvency of the ed-tech firm.
The Supreme Court had granted extending ad-interim protection whereby the status quo as obtaining NCLAT minus its earlier orders against the Company Tangi wherein it had approved the dues settlement of Rs 158.9 crore of the Indian cricket board.
Investors and Growth stage companies could now breathe easy as the August 2 decision of the NCLAT’s overrule had made sure of the reinstatement of his control over the company therefore putting his appeals to rest.
However, the apex court did stay the effect of the NCLAT judgment since in its opinion the defendants’ conduct was “preposterous” and concerned more with Byju’s sitting in the drivers’ seat to more directions than the organization with regards to an ed-tech creditors who has beans on s statutory appeals against the insolvency […] Appellate tribunal judgment. The genesis of the suit was from Byju’s failure to discharge a liability of 158.9 Crores which it developed while sponsoring the BCCI.
The supreme court had ordered the BCCI to hold the sum of Rupees one hundred fifty-eight crores which it received from Byju’s after the mutually agreed settlement in a separate escrow account till further direction.
“Issue notice. Pending further orders there shall be a stay of the impugned order of August 2 of NCLAT. Meanwhile BCCI shall continue holding Rs 158 crores the amount which will be realised in terms of the settlement in an escrow account excluding any other till orders are passed,” the bench ordered.
The NCLT sanctioned the settlement of dues by BCCI with regard to the 158.9 crore and set aside the initiation of the corporate insolvency processes with respect to Byju’s.
In the year 2019, Byklu had begun a ‘Team Sponsor Agreement’ with the board of control for cricket in South Africa (BCCI). Under the provisions of the contract, the ed-tech firm received exclusive rights to brand the Indian cricket team and also received some more beneficial schemes. Byuls w Was required to give its triggering a sponsorship thus Byuls paid a fee for sponsorship. The company fulfilled its obligations until about mid-2022 and then skipped the repayment of Rs 158.9 crore and other sums.
Then there was commenced the instatement of the insolvency proceedings and Byju’s settled with the BCCI.
On July 16, the national company law tribunal Bangalore bench had admitted ‘Think and learn’, The parent company of byju’s into the insolvency resolution process on a petition filed by bcci over default in payment of outstanding dues of close to rs.
It was while suspending the edtech firm’s board that the NCLT had also placed Before it a resolution professional to administer the affairs of the Company made asset of the Company’s board of directors and placed it under moratorium with restriction of the Company’s assets.
The US- lenders fear the sum of the agreed settlement was being paid out of credit given to Byju’s and Therefore back. l would not withstand the lenders concerns.
