In a major setback for Byju’s, the edtech giant will have to face insolvency proceedings. Notably, the Supreme Court of India on Wednesday (23rd October), junked the National Company Law Appellate Tribunal’s (NCLAT) order which had closed the insolvency proceedings against edtech giant Byju’s for accepting a Rs 158.9 crore dues settlement with the Board of Control for Cricket in India (BCCI).
The Chief Justice of India (CJI), DY Chandrachud, and Justices JB Pardiwala and Manoj Misra made up the bench.
The honourable court said, “There was no formal application made for withdrawal, the first respondent who was a former director of the corporate debtor had moved NCLAT directly. Despite these grave deviations, NCLAT still approved the settlement. We hold that recourse to Rule 11 of NCLAT Rules was not warranted and exercise of inherent powers cannot be done to subjugate legal process and the NCLAT should have stayed the composition of Committee of Creditors (CoC) instead. Thus we allow the appeal and set aside NCLAT judgment of August 2, 2024.”
The Court has ordered the ₹158 crore that was kept in a different escrow account as a result of the NCLAT judgment’s stay be transferred to the Committee of Creditors’ escrow account.
The TFI media has been very vocal about the issues related to Byju’s & its malfunctioning. Despite the direct attack by Byju’s management TFI had been prominently covering the concerns over this in the past. Once Co-founder of BYJU’s, Divya Gokulnath targeted our coverage and presenting as if the company’s financials were solid and growing. In a long post, she said that the second blockbuster release of that year, after Brahmastra, was Byju’s financial results. She said, “…I have not seen Brahmastra yet, but I do happen to know Byju’s results. Because, as its Director, I was involved in its making.”
Further talking about the TFI post she wrote “Whether or not you have seen the Bollywood blockbuster, I am sure you would have ‘seen’ our results. But have you seen the complete picture? Because just like movie reviews, sensationalism results in more clicks than truth in this age of 280-character reading attention spans”.
Here Byjus’s co-founder tried to play a trick. Sharing favorable article’s headlines, she declared that #byjus‘s is the second blockbuster after #Brahamastra . But, sharing morphed screenshot of unfavorable article written by me, she tried to downplay her company’s misdeeds. pic.twitter.com/CHmeMIkDa3
— Rahul Gupta (@rahul0948) September 20, 2022
And currently after the National Company Law Tribunal (NCLT) in Bengaluru granted the bankruptcy plea brought by the Board of Control for Cricket in India (BCCI) over a debt of ₹158 crore, Byju’s was admitted to the corporate insolvency resolution process (CIRP) in July.
Pankaj Srivastava was named the Interim Resolution Professional (IRP) by the Tribunal.
After recording an undertaking that the reimbursement is being personally funded by Riju Raveendran (Byju Raveendran’s brother) and not deducted from funds that should go to financial creditors, the NCLAT ended the insolvency proceedings and approved a settlement between Byju’s and BCCI.
The NCLAT order that had stopped the CIRP was stayed by the Supreme Court on August 14.
Now it would be interesting to see how Byju’s would manage this crisis, whether they would rise as shining armour or would play the blame game & run away putting lakhs of students .