BREAKING: Supreme Court sets aside Rs 158.9 crore settlement between Byju's and BCCI
A bench led by Chief Justice DY Chandrachud, along with Justices JB Pardiwala and Manoj Misra, ordered that the Rs 158 crore will be held in a separate escrow account, which will be maintained by the committee of creditors.
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FollowThe Supreme Court of India on Wednesday has set aside the National Company Law Appellate Tribunal's (NCLAT) order that approved a settlement of Rs 158.9 crore to be paid by edtech giant Byju's to the Board of Control for Cricket in India (BCCI). This decision comes after the court allowed an appeal from US-based creditor Glas Trust Company LLC, asserting its right to participate in the insolvency proceedings involving Byju's.
A bench led by Chief Justice DY Chandrachud, along with Justices JB Pardiwala and Manoj Misra, emphasized that Glas Trust cannot be considered an unrelated party in this case and possesses the locus to approach the court. The court ordered that the Rs 158 crore will be held in a separate escrow account, which will be maintained by the committee of creditors.
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The Supreme Court's ruling follows a previous suspension of the NCLAT's decision, which had previously set aside the insolvency proceedings against Byju's, thereby allowing Byju Raveendran to regain control of the company. Last month, the NCLAT approved the settlement with BCCI and dismissed the insolvency proceedings initiated against Byju's.
The dispute centers on a Rs 160 crore sponsorship contract between Byju's and BCCI, which was due to expire in November 2023. However, BCCI insisted on extending the contract until March 2024 to secure a new sponsor for the upcoming financial year. Following financial difficulties, Byju's had opted not to renew its contracts with BCCI, the International Cricket Council (ICC), or FIFA.
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Glas Trust raised concerns that the payment to BCCI, made by Riju Ravindran—Byju Raveendran's brother—was improper, as Ravindran had agreed to cover the company’s dues using personal funds. Glas Trust is the trustee for lenders to whom Byju's owes approximately $1.2 billion.
Solicitor General Tushar Mehta, representing BCCI, expressed apprehension about potential adverse effects of the court's orders on the framework of settlements in insolvency cases. He noted that prior to the introduction of Section 12A of the Insolvency and Bankruptcy Code in 2018, settlements were given greater consideration by the courts.
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