SC stays NCLAT order approving Byju's settlement of dues with BCCI

The money that Byju's has paid to the BCCI will be kept in a separate escrow account, a bench led by Chief Justice of India (CJI) DY Chandrachud said

In a major setback to an embattled Byju's, the Supreme Court on Wednesday stayed the order of National Company Law Appellate Tribunal (NCLAT) allowing the edtech company's Rs 158.9 crore dues settlement 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 DY Chandrachud and Justices JB Pardiwala and Manoj Misra.

The money that Byju's has paid to the BCCI will be kept in a separate escrow account, the bench said.

"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.

 

Appearing for BCCI, Solicitor General Tushar Mehta, said that it will be detrimental to them to put a stay on the NCLAT proceedings for now.

The appellate tribunal had in its August 2 order said the settlement is being arrived at before the Committee of Creditors could be formed considering the source of the money (for settlement) is not in dispute, and did not have a reason to keep the company in insolvency process.

Byju’s US-based lenders had opposed the settlement. They had told NCLAT that the money being used for the repayment is tainted as it is part of $533 million that had gone “missing”.

Riju Raveendran, brother of company's founder Byju Raveendran and its board member, had told the NCLAT that the money paid to the BCCI is “clean”. His counsel had told the court that the money paid to BCCI was not part of the “missing” $533 million as alleged by the lenders. The missing money is at the heart of a fight between the US lenders and Byju's parent companyThink & Learn.

A day after the NCLAT order gave Byju control of his company, he filed a caveat in the Supreme Court to be informed if the US lenders decide to appeal against the order.

(With inputs from agencies)