New Delhi: The Supreme Court on Wednesday set aside the order of the National Company Law Appellate Tribunal, which stopped insolvency proceedings against embattled ed-tech firm Byju's.
A three-judge bench led by Chief Justice of India D Y Chandrachud also reversed the order of the NCLAT approving Byju’s Rs 158.9 crore dues settlement with the Board of Control for Cricket in India (BCCI). The bench, also comprising justices J B Pardiwala and Manoj Misra, directed the BCCI to deposit the settlement amount of Rs 158.9 crore with a committee of creditors.
The apex court said an amount of Rs 158 crores, maintained in a separate escrow account, will be deposited into the escrow account of the committee of creditors and shall be maintained by them. The apex court ruled that recourse to rule 11 of NCLAT rules was not warranted and exercise of inherent powers cannot be done to subjugate the legal process.
The apex court said that NCLAT did not apply its mind while closing the insolvency proceedings against the ed-tech major, and ordered fresh adjudication in the case. The apex court’s judgment came on an appeal by US firm Glas Trust Company LLC against the NCLAT order. The detailed judgment will be uploaded later in the day.
On August 2, the NCLAT granted relief to the embattled ed-tech firm by setting aside the insolvency proceedings against it after approving its Rs 158.9 crore dues settlement with the BCCI.
The NCLAT verdict had come as a huge relief for Byju's as it had effectively put its founder Byju Raveendran back in control of the company's finances and operations. However, the apex court on August 14, termed the NCLAT verdict "unconscionable", and put on hold the operation of the NCLAT order while issuing notices to Byju's and others.
