The Supreme Court on Thursday declined to issue an interim order to stop the Committee of Creditors (CoC) from holding meetings as part of the insolvency proceedings against embattled ed-tech firm Byju’s.
However, the court, led by Chief Justice D Y Chandrachud along with Justices JB Pardiwala and Manoj Misra, has scheduled a final hearing on the matter for August 27.
The court acknowledged that any developments occurring before the final hearing could be reversed if it finds merit in the appeal by US-based creditor Glas Trust Company LLC. The appeal challenges a decision by the National Company Law Appellate Tribunal (NCLAT) regarding Byju’s insolvency case.
Senior advocate Abhishek Singhvi, representing Byju’s, and Solicitor General Tushar Mehta, representing the Board of Control for Cricket in India (BCCI), informed the court that the CoC was established on the evening of August 21, with the US firm holding a 98% stake. Singhvi argued that this timing was unfair and could make it difficult to reverse decisions later.
Mehta suggested that delaying the CoC meeting could help maintain a balance, as holding it now would effectively grant the appeal without proper consideration. The bench chose not to issue any orders at this stage and set the matter for hearing on August 27.
This plea was initially mentioned on August 20, when Byju’s and the BCCI requested the court to prevent the Insolvency Resolution Professional (IRP) from forming the CoC. The court refused that request as well.
Previously, on August 14, the Supreme Court had stayed an NCLAT ruling that set aside the insolvency proceedings against Byju’s and approved a Rs 158.9 crore settlement with the BCCI. The stay allowed Byju Raveendran, the company’s founder, to regain control. The court, however, termed the NCLAT verdict “unconscionable” and ordered that the Rs 158 crore received by the BCCI be held in a separate escrow account until further notice.
Byju’s had entered a sponsorship agreement with the BCCI in 2019, which included displaying its brand on the Indian cricket team’s kit. While the company met its payment obligations until mid-2022, it defaulted on a Rs 158.9 crore payment, leading to the initiation of insolvency proceedings. Byju’s later settled with the BCCI, but US-based lenders raised concerns that the settlement funds were being diverted from their loans to Byju’s.
The NCLAT had approved the settlement but warned that any failure to meet payment deadlines would automatically revive the insolvency proceedings against Byju’s. The case is now set for a final hearing on August 27.
