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The Supreme Court of India has reserved its order on a petition filed by US lenders who are challenging their exclusion from the Committee of Creditors (CoC) in the insolvency case of the beleaguered edtech platform, Byju's. The court has, in the meantime, restrained the insolvency resolution professional (IRP) from convening any further meetings of the CoC until the final verdict is pronounced. This decision stems from a plea submitted by a US firm contesting the National Company Law Appellate Tribunal (NCLAT) order that had halted insolvency proceedings against Byju's.
The Supreme Court bench, led by Chief Justice D Y Chandrachud, has directed the IRP to maintain the status quo with respect to the CoC proceedings, ensuring that no additional meetings are scheduled until the judgment is delivered. This order, directly affecting the course of the insolvency proceedings, came in response to the US firm, Glas Trust Company LLC, challenging the NCLAT's earlier decision. The NCLAT's verdict had effectively set aside insolvency proceedings against Byju's, allowing the company to proceed with a settlement agreement worth ₹158.9 crore with the Board of Control for Cricket in India (BCCI).
Earlier in August, the NCLAT had granted relief to Byju's, effectively shielding the company from insolvency proceedings after the settlement agreement was approved. This decision had placed Byju's founder, Byju Raveendran, back in control of the company. However, this NCLAT verdict was met with strong objection from the US-based creditor Glas Trust Company. The Supreme Court, in August, intervened, describing the NCLAT verdict as "unconscionable" and staying its operation. The court issued notices to Byju's and other parties involved, including the US creditor, in response to the appeal against the NCLAT's judgment.
The Supreme Court's latest decision to reserve its order and halt CoC proceedings signifies the importance and complexity of the case. The court's questioning of the NCLAT's verdict, hinting at potential re-adjudication, further emphasizes the intricate nature of the legal battle. This legal tussle throws light on the ongoing financial struggles faced by Byju's, highlighting the challenges faced by the edtech industry amidst a turbulent economic landscape.