Supreme Court to fast-track hearing on Byju's insolvency plea after US creditor appeal

The Supreme Court has agreed to expedite the hearing of an appeal filed by a US-based creditor, Glas Trust Company LLC, against the order of the National Company Law Appellate Tribunal which stayed the insolvency proceedings against ed-tech giant Byju's and approved a Rs 158.9 crore settlement with the Board of Control for Cricket in India (BCCI).

A bench headed by Chief Justice D Y Chandrachud and comprising Justices J B Pardiwala and Manoj Misra took up the plea for an early hearing by senior advocate N K Kaul appearing for Byju's. Kaul said the promoters were the only contributors and no borrowing was made from outside and the petition by the US firm was not meritorious.

Chief Justice Chandrachud said the matter would be listed at the earliest. Counsel for the US creditor, senior advocate Kapil Sibal, also sought an early hearing.

The court refused to pass an interim order to restrain the committee of creditors (CoC) from holding meetings relating to the insolvency proceedings against Byju's on August 22 and fixed August 27 as the date for a final hearing of the matter. The Supreme Court, while noting that something more may happen, made it clear that they could be void if the appeal of the creditor was without merit.

Legal problems started piling up after it defaulted on paying Rs 158.9 crore as part of the 2019 sponsorship agreement in force with the BCCI. It was in July this year that insolvency proceedings began under the NCLT following a complaint by BCCI but soon after, Byju's and the BCCI reached a settlement.

In August, NCLAT stayed the insolvency process and cleared the settlement giving back control of the firm to its founder Byju Raveendran. However, SC stayed an order by NCLAT saying it was "unconscionable", ordering Rs 158 crore settlement to be kept in escrow till further notice.

US-based lender flagged that settlement money may get diverted from credit it provided to Byju's further muddling the case.

With this, the decision on the case will be taken further by the Supreme Court, while Byju's along with all the creditors will wait for the decision.

(With PTI inputs)