SC refuses to stay CoC operations in Byju’s insolvency case

The Supreme Court on Thursday declined to stay the operations of a recently formed Committee of Creditors (CoC) overseeing the corporate insolvency resolution process (CIRP) initiated against the embattled ed-tech giant Byju’s, stating that the court would examine the merits of the case before issuing any further orders.
By an order on August 14, the top court suspended the National Company Law Appellate Tribunal (NCLAT) order that allowed a settlement between the company and the Board of Control for Cricket in India (BCCI), effectively reviving the insolvency proceedings against Byju’s.
A bench, led by Chief Justice of India Dhananjaya Y Chandrachud, turned down the plea by the company and the BCCI to either put the CoC operations in abeyance or defer the meeting that is scheduled for August 27.
Even as Byju’s and BCCI argued that the top court’s interim order on CoC would “balance the equities”, the bench, also comprising justices JB Pardiwala and Manoj Misra, replied that no prejudice would be caused to any party since the final order in the matter is yet to be passed.
“If we dismiss their petition, ultimately whatever they do would be rendered meaningless. If we come to the conclusion that their petition is without merit, they cannot ask you to go under section 12A (of IBC). We need to hear this on merits,” said the bench, adjourning the matter until August 27.
Section 12A of the Indian Insolvency and Bankruptcy Code (IBC) allows for the withdrawal of an insolvency application against a corporate debtor with the approval of at least 90% of the CoC.
Senior counsel Abhishek Manu Singhvi appeared for Byju’s while solicitor general Tushar Mehta represented the BCCI. Senior counsel Shyam Divan appeared for Byju’s US-based lender, Glas Trust.
The case in question revolves around Glas Trust’s appeal against a payment settlement between BCCI and the edtech firm that formed the basis of staying insolvency proceedings against Byju’s – officially known as Think and Learn Pvt Ltd.
The insolvency process against Byju’s was originally initiated in June 2024 by the National Company Law Tribunal (NCLT) in Bengaluru following a plea by the BCCI, alleging default by Byju’s to pay the cricketing board approximately ₹158 crore related to sponsorship deals for the Indian cricket team’s jerseys.
In July, the National Company Law Appellate Tribunal (NCLAT) in Chennai halted the insolvency proceedings after being informed by the BCCI that it had reached a settlement with Byju’s. Riju Raveendran, Byju Raveendran’s brother and a shareholder, agreed to clear the dues from his personal funds, generated from the sale of Think and Learn’s shares between 2015 and 2022.
On August 2, NCLAT approved the settlement, halting bankruptcy proceedings against Think and Learn, and returning control of the company to its founder, Byju. The tribunal approved the settlement after receiving an undertaking that the repayment would be personally funded by Riju and not from funds meant for financial creditors.
Glas Trust, however, objected to the payment settlement between BCCI and Byju’s, claiming that the ₹158 crore was “tainted” and had been misappropriated from them.
After Glas Trust approached the Supreme Court, the apex court on August 14 stayed the NCLAT’s decision that allowing Byju Raveendran, the company’s founder, to take back control of the edtech firm. The bench had also directed that the ₹158 crore Byju’s paid to BCCI would be kept in a separate escrow account.
During Thursday’s hearing, Singhvi informed the court that a CoC had been constituted just 12 hours earlier, with 98% of the voting rights held by the US-based company. The BCCI, through Solicitor General Tushar Mehta, urged the bench to defer or stay the CoC’s operations. “Let the meeting of the CoC be deferred or stayed. How can this 98 percent decide anything?” argued the SG, emphasising that not staying the CoC proceedings could render the Glas Trust’s appeal allowed without any further hearing.
However, the court chose not to pass any stay order against the CoC for now, stating that a decision would be made only after a detailed hearing on the case’s merits.