Byju’s Insolvency: Supreme Court Declines To Stay Formation Of CoC, To Hear Case On Aug. 22

The Supreme Court on Tuesday declined Byju’s request to stay the formation of the committee of creditors, until the matter is finally heard by the top court.

Appearing for Byju’s, senior advocate Abhishek Manu Singhvi said that top court’s Aug. 14 order has , in effect, revived the insolvency proceedings against the ed-tech firm and that means that the resolution professional has the power to appoint the CoC.

If the CoC is constituted, Byju’s will have to file an application for withdrawal of the insolvency process, Singhvi said.

Under the Insolvency and Bankruptcy Code, an insolvency proceeding can be withdrawn if at least 90% of the creditors agree to the withdrawal.

Not persuaded by the request, the court said that the matter is listed and will be taken up on Aug. 22.

On Aug. 14, the top court ordered a stay on the National Company Law Appellate Tribunal's approval of Byju's settlement with the Board of Control for Cricket in India over dues to the tune of Rs 158 crore.

In effect, the top court’s order meant that the insolvency process which was brought to a halt by the NCLAT, stood revived.

Earlier this month, the NCLAT approved Byju's settlement with the BCCI, putting an end to its insolvency process. According to the settlement, Byju's committed to settling its dues with the BCCI, with payments scheduled for Aug. 2 and Aug. 9.

Approving the settlement, the NCLAT had said that if payments are not made according to the schedule, the insolvency process will be resumed.

The US-based lenders were opposing the settlement because it was alleged that the money being used for the said settlement was siphoned from them and its source was questionable.

The insolvency resolution process against beleaguered Byju's was initiated in July, following the edtech's default on a Rs 158.9-crore payment to the BCCI.