The Supreme Court on Wednesday has set aside the National Company Law Appellate Tribunal ruling that halted insolvency proceedings against Byju’s, the troubled Ed-tech firm.
The bench, led by Chief Justice D.Y. Chandrachud, also reversed the NCLAT’s approval of Byju’s settlement of ₹158.9 crore with the Board of Control for Cricket in India. The court instructed the cricket board to deposit the settlement amount with a committee of creditors.
The decision came as part of an appeal filed by the US-based Glas Trust Company LLC, which challenged the NCLAT’s earlier order.
The Supreme Court observed that the NCLAT failed to thoroughly consider the implications of closing the insolvency proceedings against Byju’s, prompting it to call for a fresh review of the case.
On August 2, the NCLAT had granted relief to Byju’s by canceling the insolvency proceedings and approving its settlement with the BCCI. This ruling had allowed Byju’s founder, Byju Raveendran, to regain control over the company’s finances and operations, providing significant relief during a turbulent time for the firm.
However, this reprieve was short-lived, as the Supreme Court described the NCLAT’s decision as “unconscionable” on August 14.
In its recent ruling, the Supreme Court stayed the NCLAT’s order and issued notices to Byju’s and other involved parties regarding Glas Trust Company’s appeal against the tribunal’s judgment.
The court’s actions underscore the ongoing legal challenges faced by Byju’s as it navigates its financial difficulties and the scrutiny of its operational decisions.
This latest development adds to the complexities surrounding Byju’s, which has been struggling with mounting debts and regulatory challenges. The firm, once a shining star in the ed-tech sector, has faced increasing pressure as it attempts to stabilize its financial standing and address the concerns of its creditors.
The Supreme Court’s intervention marks a significant moment in the ongoing saga, highlighting the delicate balance between corporate governance and creditor rights in the context of insolvency proceedings.
As the situation unfolds, all eyes will be on Byju’s to see how it responds to these legal challenges and whether it can regain its footing in a competitive industry.
