Supreme Court Overturns NCLAT’s Decision on Byju’s and BCCI Settlement
The Supreme Court of India has overturned a decision by the National Company Law Appellate Tribunal (NCLAT) regarding the closure of insolvency proceedings against the educational technology company, Byju’s. The NCLAT had previously accepted a settlement between Byju’s and the Board of Control for Cricket in India (BCCI) involving a payment of Rs 158 crores.
Chief Justice DY Chandrachud’s Directive
A bench led by Chief Justice DY Chandrachud has directed that the Rs 158 crores be deposited into an escrow account managed by the Committee of Creditors. The court has instructed the Insolvency Resolution Professional to maintain the current situation and refrain from holding any meetings with the creditors’ committee until the Supreme Court reaches a decision.
Background of the Case
The case arose from a plea by Glas Trust Company LLC challenging the NCLAT’s order. The NCLAT’s Chennai branch had previously approved a settlement between Byju Raveendran, the founder of Byju’s, and the BCCI over unpaid dues totaling Rs 158 crore. The Supreme Court had earlier questioned whether the NCLAT had thoroughly considered the matter before making its decision.
Doubts Revealed
Supreme Court -: The Supreme Court is the highest court in India. It makes important decisions on legal matters and ensures that laws are followed correctly.
NCLAT -: NCLAT stands for National Company Law Appellate Tribunal. It is a special court in India that deals with company-related issues, like business disputes and insolvency cases.
Byju’s -: Byju’s is a popular educational technology company in India. It provides online learning programs for students.
BCCI -: BCCI stands for Board of Control for Cricket in India. It is the national governing body for cricket in India.
Insolvency proceedings -: Insolvency proceedings are legal processes to help companies that cannot pay their debts. It involves finding ways to pay back creditors or reorganize the company.
Escrow account -: An escrow account is a special bank account where money is held safely until certain conditions are met. It ensures that the money is used properly.
Committee of Creditors -: The Committee of Creditors is a group of people or organizations that a company owes money to. They help decide how to handle the company’s debts during insolvency.
Insolvency Resolution Professional -: An Insolvency Resolution Professional is a person who manages the insolvency process. They help find solutions for companies that cannot pay their debts.
Status quo -: Status quo means keeping things the way they currently are. In this context, it means not making any changes until the court decides what to do.
