Insolvency process against Byju’s: SC reserves verdict on US firm’s plea

New Delhi: The Supreme Court on Thursday directed the insolvency resolution professional (IRP) to maintain status quo and not to hold any meeting of the committee of creditors (CoC) in the matter pertaining to insolvency proceedings against ed-tech firm Byju’s.

The top court also reserved its verdict on a plea of US firm Glas Trust Company LLC against the verdict of National Company Law Appellate Tribunal (NCLAT) setting aside the insolvency proceedings against Byju’s and approving its Rs 158.9 crore dues settlement with the BCCI.

“The arguments have concluded. The judgement is reserved. Until the judgment is pronounced, the IRP shall maintain status quo and not hold any meeting of the CoC,” a bench comprising Chief Justice D Y Chandrachud and justices J B Pardiwala and Manoj Misra said.

The interim direction was passed after senior advocate Kapil Sibal, appearing for the US firm, alleged Glas Trust Company LLC, which has more than 99 per cent stakes in the CoC, has been ousted from the CoC by present IRP. The IRP is appointed under the IBC (Insolvency and Bankruptcy Code) by the National Company Law Tribunal to temporarily manage the ailing company’s finances and his role is to conduct the corporate insolvency resolution process and assess the firm’s operations as a going concern.

Solicitor General Tushar Mehta, appearing for the Board of Control for Cricket in India (BCCI), resumed advancing his submissions and said there was nothing wrong with the settlement of the cricket body’s claim.

He said there were two conditions that the money should be untainted and it should not come from the assets of corporate debtor Byju’s.

Senior advocate Shyam Divan, also appearing for the US firm, said the NCLAT could not have allowed this kind of settlement with the BCCI.

On Wednesday, the top court questioned the verdict of NCLAT setting aside the insolvency proceedings against Byju’s and approving its dues settlement with BCCI.

Observing that the NCLAT did not apply its mind while closing the insolvency proceedings against the ed-tech major, the bench had said it may send back to the appellate tribunal for fresh adjudication.