On Thursday, the Supreme Court of India declined to defer or impose a stay on the operations of a Committee of Creditors (CoC) recently established to oversee the corporate insolvency resolution process (CIRP) for the ed-tech firm Byju’s [Glas Trust Company LLC v. Byju Raveendran and ors].
The Bench, comprising Chief Justice of India (CJI) DY Chandrachud, Justices JB Pardiwala, and Manoj Misra, indicated that it would not consider issuing a stay order to restrain the CoC proceedings without first reviewing the case on its merits.
“If we dismiss the appeal, everything goes. If we dismiss their appeal, they cannot later invoke Section 12A. We need to hear the matter on its merits,” said the CJI before adjourning the case until Tuesday, August 27.
The Court was addressing an appeal from a creditor challenging a decision to close insolvency proceedings against Think & Learn, the parent company of Byju’s. On August 14, the Court had stayed a National Company Law Appellate Tribunal (NCLAT) decision that halted the insolvency process and revived the proceedings against Byju’s. These proceedings were initially initiated in June by the National Company Law Tribunal (NCLT), Bengaluru, following a petition from the Board of Control for Cricket in India (BCCI).
The BCCI’s petition stemmed from Byju’s defaulting on a payment of approximately ₹158 crores related to sponsorship deals for the Indian cricket team. The insolvency proceedings were later challenged before the NCLAT Chennai, which stayed the process in July after the BCCI reported a settlement with Byju’s. Byju’s founder, Byju Raveendran, assured the NCLAT that the amount owed would be settled by his brother Riju, the largest shareholder, from his personal funds.
Glas Trust raised concerns that funds, including a disputed $533 million owed to financial creditors, might be diverted to settle the BCCI claim. Despite Glas Trust’s objections, the NCLAT suspended the insolvency proceedings, prompting Glas Trust to seek relief from the Supreme Court.
The Supreme Court revived the insolvency process on August 14 by staying the NCLAT order. During a brief follow-up hearing, the Court addressed the formation of a new CoC for Byju’s, which Byju’s representatives claimed had been established just 12 hours prior. Dr. AM Singhvi, representing Byju’s, informed the Court that the CoC was comprised predominantly of a U.S.-based company.
Senior Advocate Shyam Divan, representing Glas Trust, disputed this claim, asserting that the CoC had not yet been properly constituted. The NCLAT had previously closed the insolvency proceedings after approving a settlement between Byju’s and the BCCI.
Solicitor General Tushar Mehta, representing the BCCI, requested that the Court defer or stay the CoC’s operations, arguing that a CoC with 98 percent representation by a single entity should not make decisions in this matter. He emphasized that failing to stay the CoC proceedings would effectively allow the appeal to succeed without a proper hearing.
The Supreme Court decided not to issue a stay order against the CoC at this time, stating that any decision on the matter would be made after a thorough examination of the case.
Representatives for Byju’s included Senior Advocate Dr. AM Singhvi and advocates Zulfiquar Memon, Waseem Pangarkar, and Nadiya Sarguroh from MZM Legal LLP. The BCCI was represented by Solicitor General Tushar Mehta and advocate Kanu Agrawal, briefed by Argus Partners. Glas Trust LLC was represented by Senior Advocate Shyam Divan along with advocates Prateek Kumar, Raveena Rai, Smriti Nair, Nishant Sharma, and Anshula Laroiya from Khaitan & Co.
