New Delhi: The Supreme Court said "Why pick up BCCI and settle with them only from your personal assets?", while questioning the verdict of insolvency appellate tribunal NCLAT, which set aside the insolvency proceedings against ed-tech major BYJU'S and approved its Rs 158.9 crore dues settlement with the BCCI.
A three-judge bench led by Chief Justice of India D Y Chandrachud and comprising Justices J B Pardiwala and Manoj Misra asked, "The company is in debt of Rs 15,000 crore. When the quantum of the debt is so large, can one creditor (BCCI) walk away saying one promoter is ready to pay me….".
The apex court said that it is apparent that the National Company Law Appellate Tribunal (NCLAT) did not apply its mind while closing the insolvency proceedings against BYJU’S. "Why pick up BCCI and settle with them only from your personal assets….the NCLAT accepts this all without applying its mind to it”, said the bench.
Senior advocates Abhishek Singhvi and N K Kaul appeared for BYJU’S, and Kapil Sibal and Shyam Divan represented the US firm Glas Trust Company LLC. Solicitor General Tushar Mehta appeared for the BCCI. Earlier this month, the US firm informed the apex court that it was wrongly removed from the committee of creditors (CoC) by the interim resolution professional (IRP) dealing with the insolvency proceedings against BYJU'S.
Questioning the NCLAT verdict, the US firm's counsel argued that the tribunal was wrong in stopping the insolvency proceedings against BYJU'S following the settlement of the amount claimed by the BCCI. It was argued before the apex court that BCCI was paid by Riju Raveendran, brother of BYJU Raveendran, and the money was “tainted”.
Opposing this contention, Singhvi and Kaul said the money was paid by Riju Raveendran from his personal assets and the same has been adverted to by the US firm during the proceedings at Delaware Court there. The counsel pressed that there was nothing wrong with the Tribunal's order closing the case.
Mehta said there was nothing wrong in closing the insolvency proceedings initiated at the behest of the cricket board, and the BCCI got its claim from the personal assets of a person. The apex court indicated that it may send back the case to the insolvency appellate tribunal for fresh adjudication by applying its mind to the source of money.
The top court will continue to matter on Thursday. The US firm's counsel had contended that it was a guarantor, which has the stakes of Rs 12,000 crore in the firm (BYJU'S). "My stake is 99.41 per cent and this has been reduced to zero by the IRP," the firm's counsel had argued.
On August 2, the NCLAT set aside the insolvency proceedings against the ed-tech firm after approving its Rs 158.9 crore dues settlement with the BCCI. The verdict came as a huge relief for BYJU'S as it had effectively put its founder BYJU Raveendran back in control.
However, on August 14, the apex court termed the NCLAT verdict as "unconscionable" and put on hold its operation while issuing notices to BYJU'S and others on the appeal of the ed-tech firm's US-based creditor Glas Trust Company LLC against the judgment of the insolvency appellate tribunal.
The apex court had said it is keen to stay the operation of the NCLAT order and the Rs 158 crore settlement amount that was paid by BYJU'S to BCCI should be kept in a separate account in the meantime. "In the meantime, BCCI shall maintain Rs 158 crores realised as settlement in a separate account...," said the bench, staying the NCLAT order.
The dispute between the BCCI and BYJU'S related to the sponsorship contract for providing jerseys to the Indian Cricket Team.
