New Delhi: The Supreme Court on Wednesday raised concerns over the National Company Law Appellate Tribunals (NCLAT) decision to close insolvency proceedings against ed-tech giant Byjus following its approval of a Rs 158.9 crore settlement with the Board of Control for Cricket in India (BCCI), according to a media report.
A bench led by Chief Justice D.Y. Chandrachud criticized the NCLAT for not thoroughly examining the case and suggested that the matter might need to be reconsidered, reported PTI.
The court questioned why the NCLAT approved a selective settlement with BCCI, given the companys significant debt burden of Rs 15,000 crore.
This scrutiny from the Supreme Court follows an August 2 ruling by the NCLAT, which provided substantial relief to Byjus by approving the settlement with BCCI and concluding the insolvency proceedings.
However, on August 14, the apex court termed the decision unconscionable and temporarily stayed its operation after a US-based creditor, Glas Trust Company LLC, appealed the verdict.
Chief Justice Chandrachud questioned the logic of settling with a single creditorBCCIusing the personal assets of Byjus founder, Riju Raveendran, while leaving other creditors unresolved. He pointed out that the NCLAT had accepted the settlement without adequately considering the source of the funds.
The case is set to continue on Thursday, with Byjus represented by senior advocates Abhishek Singhvi and N.K. Kaul, and Glas Trust Company represented by Kapil Sibal and Shyam Divan.
Byjus, once the team sponsor for the Indian cricket team, defaulted on sponsorship payments to BCCI after mid-2022, leading to the initiation of the insolvency process.
Although a settlement was reached, Glas Trust Company has expressed concerns that the funds used for the settlement may have been diverted from loans extended to Byjus.
The Supreme Courts decision could have significant implications for Byjus, which has been grappling with escalating financial challenges in recent months.
