**Supreme Court Upholds Insolvency Proceedings Against Byju’s**
The Supreme Court has upheld a decision rejecting appeals from the Board of Control for Cricket in India (BCCI) and Byju’s co-founder Riju Raveendran, who sought to withdraw insolvency proceedings against Byju’s. A bench consisting of Justices J B Pardiwala and R Mahadevan dismissed the appeals challenging the National Company Law Appellate Tribunal (NCLAT) ruling from April 17.
In response to the verdict, legal representatives for Byju’s founders expressed their disappointment. An official statement from Byju’s emphasized that the termination of the proceedings would have positively impacted millions of students reliant on its learning system and thousands of employees. The statement further noted, “We are assessing the implications of today’s ruling and will determine our next steps after careful consideration. The founders of BYJU’S will continue their efforts to resolve the company’s bankruptcy and remain hopeful for a just outcome through the legal system.”
Previously, the BCCI and Raveendran contested an order from the Bengaluru bench of the National Company Law Tribunal (NCLT), which on February 10 mandated that their settlement proposal be presented to the newly formed Committee of Creditors (CoC). This committee includes US-based Glas Trust, which represents lenders to whom Byju’s owes $1.2 billion.
The NCLAT’s Chennai bench, comprising Justices Rakesh Kumar Jain and Jatindranath Swain, upheld the NCLT’s directives, stating that the settlement proposal was submitted after the CoC’s formation. According to Section 12A of the Insolvency and Bankruptcy Code, any withdrawal from insolvency proceedings requires the approval of 90% of the CoC’s voting share.
BCCI and Raveendran argued that their application under Section 12A was filed before the CoC was constituted, asserting that the relevant provisions should be based on Regulation 30A(1)(a) rather than Regulation 30A(1)(b). Section 12A provides a pathway for exiting insolvency, allowing the NCLT to permit withdrawal initiated by any financial or operational creditor, contingent upon the approval of the CoC.
However, the NCLAT rejected their plea, clarifying that the application, filed on November 14, 2024, occurred after the CoC’s formation. The court stated, “If the application under Section 12A is filed under Regulation 30A(1)(a) before the constitution of the CoC, then Section 12A, which mandates the approval of such an application for withdrawal by a 90% voting share of the CoC, shall not apply.”
In conclusion, the Supreme Court’s ruling reinforces the legal framework governing insolvency proceedings, emphasizing the necessity for adherence to established protocols and the importance of creditor approval in such matters.
**FAQ**
**Q: What was the outcome of the Supreme Court’s ruling regarding Byju’s insolvency?**
A: The Supreme Court upheld the decision to continue insolvency proceedings against Byju’s, rejecting appeals from the BCCI and co-founder Riju Raveendran to withdraw the case.