SC Questions NCLAT Ruling on Approving Byju’s INR 158.9 Crore BCCI Settlements
On 25 September 2024, the Supreme Court questioned Byju's choice to pay off the Board of Control for Cricket in India (BCCI) for INR 158 crore, while leaving behind significant amounts owed to other creditors, such as US lender Glas Trust Co LLC, totaling INR 15,000 crore.
Chief Justice DY Chandrachud headed a bench that questioned why BCCI was the only organization chosen to pay off its debts. But what about other people? Can a creditor simply walk away and claim that a single promoter is prepared to pay them when the amount of the debt is so substantial? Was it derived from your assets? The CJI stated, "You have a debt of INR 15,000 crore today."
The trustee for lenders owing $1.2 billion, GLAS Trust, is appealing the settlement reached between the Edutech company and BCCI, claiming that the funds paid by Byju Raveendran's brother Riju Ravindran were tainted. The top court is currently considering these arguments.
The NCLAT's order, which had authorized an INR 158.9 crore dues settlement deal between the BCCI and Think & Learn Pvt Ltd, the parent firm of BYJU's, an Edutech major, was stayed by the bench last month.
BCCI Raising Concerns Over NCLAT’s Order
The National Company Law Appellate Tribunal's ruling to set aside the July 16 judgment that started Think & Learn's insolvency procedures was questioned by the top court as well, even though the decision was made in only one paragraph and without "applying its mind at all." Examine the logic in the NCLAT sequence. It is merely a paragraph. This demonstrates absolutely no application of the mind. The CJI added, "Let the tribunal apply its mind once more and see where the money is coming from."
Speaking on behalf of the BCCI, Solicitor General Tushar Mehta pleaded with the top court to take into account the ramifications if the appeal (of Glas Trust) is granted and to refrain from overturning the NCLAT's decision. In support of Glas Trust, senior attorney Shyam Divan argued that the NCLAT had incorrectly approved the settlement despite clear objections that the settlement's funding source was questionable. This was done by relying solely on a vague commitment provided by Riju Ravindran. NK Kaul and AM Singhvi, Byjus' senior counsel, opposed the Glas Trust's appeal and its actions, which included allegations that Byju and Riju Raveendran were absconding.
Byju's Legal Trouble
Byju Raveendran, the founder of Byju's, is involved in multiple legal proceedings. These include a payment dispute of INR 158 crore with the Indian cricket board and a dispute involving a $1.2 billion term loan with US lenders. Their problems are made worse by the fact that the Enforcement Directorate of India is looking into claims of INR 9,362.35 crore in Foreign Exchange Management Act violations.
Nitin Konde
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