The bench was hearing a plea filed by Byju Raveendran challenging the NCLT order initiating insolvency proceedings against the company.
Priyanka Gawande
Published2 Aug 2024, 04:52 PM IST
The NCLT had on 16 June admitted the Board of Control for Cricket in India’s plea initiating a corporate insolvency resolution process against Byju’s, Pic by Hemant Mishra/mint
Mumbai: The National Company Law Appellate Tribunal (NCLAT) has provided a significant reprieve to embattled edtech firm Byju’s by setting aside its insolvency proceedings, allowing it to resolve its ₹158 crore settlement with Board of Control for Cricket in India (BCCI).
The bench was reviewing a petition by founder and chief executive officer (CEO) Byju Raveendran, who challenged the National Company Law Tribunal (NCLT) order initiating insolvency proceedings. Raveendran also requested a stay on the formation of a committee of creditors (CoC).
“In view of the undertaking given by Riju Raveendran, the settlement is hereby approved by this tribunal. The appeal by the applicant (Byju Raveendran) succeeds and impugned order dated 16 July is set aside. However, in case there is a breach of the undertaking given, the order of the NCLT shall stand revived,” the bench led by justices Sharad Kumar Sharma and Jatindranath Swain, said.
The appellate tribunal on Thursday deferred the formation of CoC as part of corporate insolvency resolution process initiated against Byju’s under the Insolvency and Bankruptcy Code (IBC) since the appeal was pending before the court. The bench also took an oral undertaking from the counsel representing the interim resolution professional that the CoC will not be formed until the tribunal passes the final orders on 2 August.
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On 16 June, the NCLT had admitted the BCCI’s plea initiating a corporate insolvency resolution process against Byju’s, and appointed an interim resolution professional to oversee the firm’s daily affairs until the matter is decided.
In 2019, Byju’s had secured a deal to feature its branding on the front of the Indian cricket team’s jersey. Last June, the company extended its sponsorship agreement with the BCCI until November. Byju’s had also requested BCCI to encash a ₹140 crore bank guarantee, with an additional ₹160 crore to be paid in instalments. The BCCI eventually took the debt-laden edtech company to bankruptcy court for allegedly defaulting on ₹158 crore in dues. The NCLT ruled that insolvency proceedings should be initiated due to enough evidence of debt and default in payment.