Supreme Court has admitted BYJU’S promoters’ appeal against NCLAT’s order refusing insolvency withdrawal. Notices issued to GLAS Trust and the former IRP as case gets listed for July 21.
New Delhi: Today, On May 29, The Supreme Court of India has agreed to hear the appeals filed by the promoters of Byju’s, India’s leading edtech company, against the order of the National Company Law Appellate Tribunal (NCLAT), Chennai.
This comes after the NCLAT had refused to allow the withdrawal of insolvency proceedings initiated by the Board of Control for Cricket in India (BCCI), even though a full and final financial settlement between BCCI and Byju’s had already been reached before the Committee of Creditors (CoC) was formed.
The case was heard by a vacation bench of Justices Vikram Nath and Sanjay Kumar.
The bench has now issued formal notices to Pankaj Srivastava, who was previously appointed as the Interim Resolution Professional (IRP) for Think & Learn (the parent company of Byju’s), and also to US-based Glas Trust Company LLC, which represents lenders to whom Byju’s owes approximately $1.2 billion.
The matter has been scheduled for the next hearing on July 21, during which the apex court has stated it will also consider granting interim relief.
Senior advocate KK Venugopal, appearing for the promoters of Byju’s, argued that the financial settlement between Byju’s and BCCI was completed well in advance of the formation of the CoC.
In his words:
“A Rs. 158 crore settlement between BYJU’S and BCCI was fully agreed upon, paid, and formally communicated to the IRP well before the CoC was constituted.”
Adding to the arguments, senior counsel Guru Krishna Kumar highlighted the challenges faced by Byju’s due to actions taken by the IRP in relation to its international assets.
He told the court:
“The Resolution Professional (IRP) handling Think & Learn’s (BYJU’s) insolvency in India, has withdrawn legal proceedings in the US initiated by Think and Learn against the lenders. This is leading to substantial assets of the company in the US being disposed off.”
To understand the background, on April 17, the NCLAT had dismissed the appeals filed jointly by BCCI and Byju’s promoter Riju Ravindran.
They were seeking to withdraw the insolvency proceedings after reaching a Rs. 158 crore settlement.
This appeal was against an earlier decision by the Bengaluru bench of the National Company Law Tribunal (NCLT), which on February 10 had directed that the settlement offer be placed before the newly constituted CoC.
Notably, this CoC includes Glas Trust, representing the foreign lenders.
In the appeal now admitted by the Supreme Court, BCCI and Ravindran have stressed that the Rs. 158 crore settlement was done much before the formation of the CoC and that there is no ground to continue the insolvency proceedings.
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