The Supreme Court of India, today reserved its verdict on a plea filed against the order of the National Company Law Appellate Tribunal (NCLAT) concluding insolvency proceedings against besieged ed-tech giant Byju’s.
The plea, challenging the NCLAT’s order was filed before the Supreme Court by US-based lending corporation, Glas Trust Company LLC (GTC) alleging gross misapprehension of fact and law by the NCLAT while dissolving the insolvency proceedings against Byju’s.
The Insolvency Proceedings against Byju’s had been dissolved by NCLAT approving the settlement of Rs.158.9 Crore paid by Byju’s towards the Board of Control for Cricket in India (BCCI).
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The Supreme Court on Wednesday (25.09.2024) had expressed strong reservations against the reasoning in the NCLAT order dated 02.08.2024, stating that the NCLAT had not applied its mind at all’ while passing the Order concluding the insolvency proceedings against Byju’s.
The Apex Court entertained the plea by GTC and proceeded to put a hold on the control of Byju’s which had been endowed back to Founder, Byju Raveendran by means of the impugned Order delivered by NCLAT.
Chief Justice of India (CJI), D Y Chandrachud during the proceedings on Wednesday condemned the reasoning provided by the NCLAT in its judgment and questioned the rationale behind permitting closing of insolvency proceedings in light of Byju’s settlement of Rs.158.9 Crore with BCCI while a monumental Rs.15,000 Crore remained as outstanding debt.
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The CJI referred to Para 44 of the NCLAT Order where it was held that:
“We have perused the affidavit and undertaking, and found that the money has been generated by Riju Raveendran from his own sources by sale of his shares held in the CD (Corporate Debtor) and income tax has been paid on such sale of such shares. In the undertaking, he has categorically stated that he is not violating the order dated 18.03.2024 passed by the Delaware Court and confirmed that he has not directly, indirectly or in any form or manner received any sum of money from disbursements made under the Credit agreement. Although, the Applicant is not satisfied about the undertaking but the Applicant has also not brought on record any evidence to the contrary that the money, which is being offered, has actually been brought by Riju Raveendran from the money disbursed to the borrower in terms of Credit agreement, or has been taken out of the coffers of the CD.”
GTC opposed the settlement between Byju’s and BCCI claiming that the Rs.158.9 Crore settled by Riju Raveendran, Board Member of Byju’s is actually part of $533 Million that had been deemed “missing” in a legal battle between GLC and Byju’s parent company, Think & Learn Private Limited.
A bench composed by Justice JB Pardiwala and Justice Manoj Misra, on Thursday (26.09.2024) reserved its verdict on the matter while advising the Insolvency Resolution Professional to maintain status quo in the matter until the Supreme Court delivers a final verdict in the matter.
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