Apex Court stays NCLAT verdict approving Rs 158.9 cr Byju’s dues settlement with BCCI
New Delhi: In a major setback to an embattled Byju's, the Supreme Court on Wednesday stayed the verdict of insolvency appellate tribunal NCLAT setting aside the insolvency proceedings against the ed-tech major and approving its Rs 158.9 crore dues settlement with the Indian cricket board.
The August 2 verdict of the National Company Law Appellate Tribunal (NCLAT) had come as a huge relief for Byju's as it had effectively put its founder Byju Raveendran back in control.
The top court on Wednesday prima facie termed the NCLAT verdict as "unconscionable" and stayed its operation while issuing notices to Byju’s and others on the appeal of the ed-tech firm's US-based creditor Glas Trust Company LLC against the judgement of the insolvency appellate tribunal.
The case stemmed from Byju's default on a Rs 158.9 crore payment related to a sponsorship deal with the Board of Control for Cricket in India (BCCI).
"We are staying the judgement (of NCLAT). This is unconscionable," observed the bench which comprised Chief Justice D Y Chandrachud and Justices JB Pardiwala and Manoj Misra.
The top court directed the BCCI to keep a sum of Rs 158 crore it had received from Byju's after a settlement in a separate escrow account till further orders.
"Issue notice. Pending further orders there shall be a stay of the impugned order of August 2 of NCLAT. In the meantime, BCCI shall maintain the amount of Rs 158 Crores ,which shall be realised in pursuance of a settlement, in a separate escrow account until further orders," the bench said.
The bench did not agree to the submission of Solicitor General Tushar Mehta, appearing for the BCCI, that the NCLAT order be not stayed without hearing the cricket board.
"Kindly don't stay the judgement, let it remain. I am saying this before your lordships for the first time that we are not heard. We have an answer to everything," Mehta said.
The bench said it has not asked the BCCI to deposit the money with the court but in a dedicated escrow account.
It also did not agree with the submission of senior advocate Abhshek Singhvi, who represented the troubled ed-tech firm, that the NCLAT order be not stayed without hearing the Byju's.
It, however, concurred with the contention of senior advocate Shyam Divan, representing the US-based lender, that the NCLAT verdict deserved to be stayed.
Singhvi said a stay will lead to revival of the committee of creditors (CoC) which was set up following the institution of insolvency proceedings against Byju’s.
The NCLAT had approved the Rs 158.9 crore dues settlement with BCCI and set aside insolvency proceedings against Byju's.
Byju's had entered into a "Team Sponsor Agreement" with the BCCI in 2019. Under the agreement, the ed-tech firm got exclusive rights to display its brand on the Indian cricket team's kit and some other benefits. Under the agreement, Byju's had to pay a sponsorship fee. The company met its obligations till the middle of 2022 but defaulted on subsequent payments of Rs 158.9 crore.
