“Until the judgment is pronounced, the interim resolution professional shall maintain status quo and shall not hold any meeting of the committee of creditors,” a Bench led by Chief Justice of India D Y Chandrachud directed.
The apex court reserved its verdict on an appeal by US lender GLAS Trust Co LLC, the trustee for lenders owed $1.2 billion by Byju’s, against the National Company Law Appellate Tribunal’s (NCLAT) order approving a settlement deal between the Think & Learn Pvt Ltd, the parent of online educational services company, and its operational creditor, the Board of Control for Cricket in India (BCCI). The lender had alleged that the money paid by Byju Raveendran’s brother Riju Ravindran was tainted.
However, the SC indicated that it will not interfere in another appeal by GLAS Trust seeking the removal of Srivastava, who had dropped the lender from the CoC, holding that it did not represent the minimum 51% of lenders in the consortium that provided a $1.2 billion term loan to Byju’s.
The apex court on Wednesday questioned Byju’s decision to settle the Rs 158 crore debt that the edutech firm owed to the BCCI and leaving substantial Rs 15,000 crore dues of other creditors, including Glas Trust.
“Why did you pick only BCCI to settle its dues? What about others? When the quantum of the debt is so large, can one creditor walk away saying one promoter is ready to pay me? Out of your personal assets? You have today a debt of Rs 15,000 crore,” the CJI said while raising concerns about the NCLAT’s decision setting aside the July 16 order that initiated insolvency proceedings against Think & Learn without “applying its mind at all.”
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The bench had last month stayed the NCLAT’s order that approved the Rs 158.9 crore dues settlement deal between the edutech major and the BCCI.Solicitor General Tushar Mehta, appearing for the BCCI, on Thursday contended that the amount of Rs 158 crore may not be a big amount for the corpus of the BCCI, but he was more concerned about the “adverse consequences” which the SC’s order may have on the scope of settlements in insolvency matters.
He said that the BCCI agreed to the settlement with Byju’s on conditions that the money should be untainted and should come through banking channels after tax was paid and the money should not be from the assets of the corporate debtor.
The SG argued that there were some provisions in the Insolvency and Bankruptcy Code which incentivise the settlement between a corporate debtor and others so that all debts do not become alive at one stroke and the company goes into liquidation.
Senior counsel Shyam Divan, appearing for Glas Trust, said there was no written application to approve the settlement. He informed the court about the last audited statement (of March 31, 2022) of Think and Learn showed a loss of Rs 8,104.68 crore.
Informing the bench about the resignation of the statutory auditor in the first week of September, he said a public body like the BCCI should be wary of accepting the settlement money.