In a significant relief for edtech company Byju's, the National Company Appellate Tribunal (NCLAT) dismissed bankruptcy proceedings against it over a sponsorship arrangement and granted a Rs 158 crore settlement with the Board of Control for Cricket in India (BCCI).
However, the NCLAT issued the judgment with the condition that any failure to make payments on the exact dates specified in the undertaking will result in the resumption of the bankruptcy proceedings against Byju's.
The appeal tribunal also invalidated Byju's US-based lenders' allegations of round-tripping, citing a lack of proof. According to legal observer, if the corporation fulfills its obligation and any dissenting party is unable to get a stay order.
According to a legal observer, if the company meets its obligations and any dissident party is unable to obtain a stay order from a higher court, founder-CEO Byju Raveendran will essentially regain control of the company.
The tribunal further stated that the money was paid by founder Byju Raveendran's brother, Riju Raveendran, through the selling of his shares.
"In view of the undertaking given and affidavit, the settlement between the parties (is) approved, and as a result, the appeal succeeds, and the impugned order (passed by the NCLT) is set aside," said a two-member Chennai bench in an order in open court.
According to the undertaking, Riju Ravindran paid Rs 50 crore to the BCCI on July 31 against Byju's outstanding dues. Another Rs 25 crore will be submitted on Friday, and the remaining Rs 83 crore on August 9 via RTGS.
The NCLAT was considering a petition brought by Byju's, which challenged the beginning of insolvency proceedings against parent firm Think and Learn.
Byju's welcomed the NCLAT ruling, describing it as a "major victory" for the edtech startup and its founders.
"The NCLAT ruling is more than simply a legal win; it is a monument to the brave efforts done by our Byju's family over the previous two years. Our original team members have invested their hearts and souls, as well as their whole funds, in this idea, often at considerable personal expense. Every Byju-ite has shown incredible resilience, working diligently through enormous obstacles. Their cumulative sacrifice humbles me, and I am eternally thankful to every one of them," Byju Raveendran stated.
On July 16, the Bengaluru bench of the National Company Law Tribunal (NCLT) ordered the beginning of Corporate Insolvency Resolution Proceedings (CIRP) against Byju's, accepting the BCCI's appeal.
The BCCI has filed the NCLT under the Insolvency and Bankruptcy Code (IBC) over Think & Learn's default of Rs 158.9 crore, which was previously India's most valued startup worth $22 billion.
The NCLT has suspended Think & Learn's board of directors in accordance with IBC regulations and appointed an interim resolution professional (IRP) to oversee the debt-ridden corporation.
