SC Reverses NCLAT Approval Of Byju's Rs 158 Crore Settlement With BCCI
The Supreme Court finds NCLAT violated the insolvency and bankruptcy code in approving a controversial deal in Byju's case
The Supreme Court has overturned the National Company Law Appellate Tribunal (NCLAT)’s decision approving a Rs 158 crore settlement between Byju’s and the Board of Control for Cricket in India (BCCI) on 23 October.
The bench, led by Chief Justice DY Chandrachud and including Justices JB Pardiwala and Manoj Misra ruled that the NCLAT's approval represented a setback for Byju’s. The judgment nullifies the earlier NCLAT ruling that had closed the insolvency proceedings against Byju following its settlement with BCCI.
The Court determined that the NCLAT had not adhered to the proper procedures outlined in the Insolvency and Bankruptcy Code (IBC) and improperly approved the settlement between the two parties.
According to media reports, the Court criticised the NCLAT for misapplying its inherent powers under Rule 11 of the NCLAT Rules, 2016, to approve the withdrawal of the insolvency case and for prematurely concluding the Corporate Insolvency Resolution Process (CIRP).
As a result of the ruling, the Rs 158 crore that BCCI had deposited in an escrow account per an earlier court order will now be moved to an escrow account managed by the Committee of Creditors (CoC).
