SC Questions NCLAT’s Decision To Approve BYJU’S-BCCI Settlement
by Akshit Pushkarna · Inc42SUMMARY
- CJI DY Chandrachud said that the SC is considering sending the insolvency matter back to the NCLAT
- The CJI questioned NCLAT’s reasoning for passing the order as BYJU’S dues to its Term Loan B lenders Glas Trust are significantly more than that of the BCCI
- The development came day after a bankruptcy court in the US ruled that BYJU’S defaulted on its TLB
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In another twist in the ongoing legal saga of BYJU’S, the Supreme Court on Wednesday (September 25) questioned the National Company Law Appellate Tribunal (NCLAT) decision to strike off the bankruptcy proceedings against the embattled edtech startup.
During today’s hearing on the case between Glas Trust and the edtech startup’s founder Byju Raveendran and others, chief justice of India (CJI) DY Chandrachud said that the bench is considering sending the matter back to the NCLAT, Bar and Bench reported.
“See the reasoning in NCLAT order… which is just a para. This does not show any application of mind at all… Let the Tribunal again apply its mind and see it afresh,” the CJI was quoted as saying.
Further questioning the NCLAT’s decision, Chandrachud asked why the amount due to the Board of Cricket Control for India (BCCI), which amounted to a little over INR 158 Cr, was given more weightage over the INR 15,000 Cr due to the consortium of BYJU’S Term Loan B (TLB) lenders.
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“BCCI has a small amount due of INR 158 Cr…What about others? They all again have to go through the entire circle,” the publication quoted the CJI as saying.
The development came a day after the Delaware Supreme Court (SC) ruled that BYJU’S had defaulted on its TLB.
With the judgement, the US-based lenders can now legally demand full repayment of the loan as well as take control of BYJU’s US entity BYJU’S Alpha.
On home soil, BYJU’S directors lost control of the startup when the SC set aside NCLAT’s decision to quash the insolvency proceedings against it. Following the initiation of the insolvency proceedings, the consortium of the US-based lenders have claimed dues to the tune of INR 11,432 Cr ($1.36 Bn).
While Aditya Birla Finance has staked claim for INR 139 Cr, Aakash Educational Services Ltd (AESL) has filed a claim for INR 1,404 Cr ($167 Mn).