New Delhi/IBNS: The Supreme Court on Wednesday (Oct. 23) overturned an order by the National Company Law Appellate Tribunal (NCLAT) that permitted a settlement between the Board of Control for Cricket in India (BCCI) and edtech firm Byjus.
The ruling is seen as a victory for Byjus US lenders, who opposed the settlement and sought a continuation of the insolvency proceedings.
Byjus had been facing insolvency proceedings after the BCCI filed a complaint alleging non-payment of sponsorship dues.
Both parties later agreed to a settlement, leading the NCLAT to halt the insolvency process.
However, on Wednesday, the Supreme Court ruled that the NCLATs decision was incorrect, stating that Byjus founders should not have approached the tribunal directly for a settlement after the insolvency process had begun.
Instead, the apex court clarified, the settlement application should have been submitted through the companys insolvency administrator and brought before the National Company Law Tribunal (NCLT).
Byjus did not comment on the courts latest decision, while GLAS Trust, which represents the US lenders claiming $1 billion in dues from a loan extended to Byjus, has yet to respond to the ruling.
The trust had challenged the settlement, accusing Byjus founders of misusing the loan, an allegation previously denied by CEO Byju Raveendran.
The Bengaluru-based edtech startup, once valued at $22 billion in 2022, has faced multiple challenges, including high-profile resignations, an auditors departure, and disputes with foreign investors over alleged mismanagement, which the company has denied.
Last week, Raveendran publicly addressed the ongoing insolvency case for the first time, expressing optimism about a turnaround, saying, Whatever is coming, I will find a way out.
The Supreme Courts order also directed that the settlement amount paid by co-founder Riju Raveendran be deposited with the lenders panel overseeing the ongoing insolvency proceedings against the company.
