The Supreme Court has rejected Byju Raveendran’s appeal against BCCI’s settlement, upholding NCLAT’s decision. The ruling reinforces that withdrawal of insolvency cases after CoC formation requires creditor approval, impacting corporate insolvency practices in India.
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NEW DELHI: The Supreme Court of India has dismissed Byju Raveendran’s appeal challenging the NCLAT’s April 17 ruling on the settlement of claims filed by the Board of Control for Cricket in India (BCCI) against Byju’s. This decision upholds the tribunal’s earlier directive requiring Byju’s to present any settlement proposals to the Committee of Creditors (CoC) of its parent company.
NCLAT’s Stand on Pre-CoC Settlements
The NCLAT Chennai Bench had ruled that the settlement between Byju’s and BCCI could not be treated as a pre-CoC settlement. The tribunal emphasized that since the Corporate Insolvency Resolution Process (CIRP) had already begun and the CoC was constituted, BCCI’s withdrawal application required approval from the creditors.
The tribunal also clarified that the filing date with the Adjudicating Authority, not the submission date to the Interim Resolution Professional (IRP), determines regulatory compliance. This was a key point of contention in the case.
Supreme Court’s Verdict
The Supreme Court, led by Justices JB Pardiwala and KV Viswanathan, refused to interfere with the NCLAT ruling. The apex court’s decision effectively reinforces the importance of CoC approval under Section 12A of the Insolvency and Bankruptcy Code (IBC) for applications filed after the committee is formed.
Background of the Case
The dispute traces back to July 2024, when BCCI filed a petition under Section 9 of the IBC seeking recovery of ₹158.90 crore from Byju’s. The National Company Law Tribunal (NCLT) admitted the application, initiating the insolvency process.
Subsequently, Byju’s settled with BCCI, which was initially approved by the NCLAT in July 2024. However, US-based financial creditor Glas Trust challenged this approval, prompting the Supreme Court to direct BCCI to approach the NCLT for formal settlement approval.
Issues in the Case
BCCI submitted Form FA (application for withdrawal) to the Interim Resolution Professional (IRP) on August 16, 2024, instructing it to be filed only after the Supreme Court appeal was resolved. The CoC was constituted on August 21, 2024, but the IRP filed the withdrawal application on November 14, 2024.
The main dispute before the NCLAT was whether the withdrawal application, dated August 16, should be considered filed before the CoC was constituted, thereby not requiring CoC approval under Regulation 30A(1)(a).
Byju’s argued that the settlement occurred before the CoC constitution, and Form FA was submitted to the IRP on August 16; hence, their rights should not be affected by the filing date.
However, the Appellate Tribunal clarified that the date of filing before the Adjudicating Authority is what determines applicability, not the date of submission to the IRP. The tribunal also rejected claims of delay by the IRP under Regulation 30A(3) of the Insolvency and Bankruptcy Board of India Regulations, 2016.
Appearance:
Byju Raveendran: Senior Advocate Navin Pahwa
The respondents, Glas Trust and Aditya Birla: Senior Advocates Kapil Sibal and Shyam Divan
Click Here to Read More Reports on Byju’s Case