SC Rejects BYJU’S Plea To Stay Meeting Of CoC

SUMMARY

Abhishek Manu Singhvi and Solicitor General of India Tushar Mehta, who appeared for BYJU’S and the BCCI, respectively, sought a stay on the meeting of the CoC

However, CJI D Y Chandrachud said that if the appeal is dismissed eventually, then all the decisions taken by the CoC would be invalidated

Glas Trust, a consortium of BYJU’S US-based lenders, moved the SC against the NCLAT’s order to set aside insolvency proceedings against BYJU’S after it reached an agreement with the BCCI

In another blow to troubled edtech startup BYJU’S, the Supreme Court (SC) on Thursday refused to stay the meeting of the committee of creditors (CoC) formed by the resolution professional for insolvency proceedings of the Byju Raveendran-led firm.

According to a report by Live Law, Abhishek Manu Singhvi and Solicitor General of India Tushar Mehta, who appeared for BYJU’S and the Board of Control for Cricket in India (BCCI), respectively, sought a stay on the meeting of the CoC.

Singhvi argued that the CoC was “hastily” constituted on Wednesday evening at the instance of Glas Trust Company, a consortium of the startup’s aggrieved US-based lenders. He added that 98% of the members of the CoC are representatives of Glas Trust and called for deferring the CoC meeting till the next date of hearing, Tuesday (August 27).

However, Chief Justice of India D Y Chandrachud said that if the appeal is dismissed eventually, then all the decisions taken by the CoC would be invalidated, as per the report.

At the heart of the matter is the SC’s decision to revive the insolvency proceedings against BYJU’S by setting aside the decision of the National Company Law Appellate Tribunal (NCLAT) to quash the insolvency proceedings. The SC’s decision came on an appeal filed by Glas Trust.

The NCLAT set aside the insolvency proceedings after the BCCI and BYJU’s reached an agreement, under which the latter would pay its dues of INR 158 Cr to the cricket board.

Earlier this week, the SC also refused to provide interim relief to BYJU’S on its plea to prevent the resolution professional from constituting the CoC.

Prior to this, BYJU’S founder and CEO Byju Raveendran argued that the insolvency will leave thousands of the startup’s employees jobless.

Besides fighting the legal hurdles, the startup is facing a number of issues on several other fronts. From delays in filing financial statements, mounting losses, multiple insolvency proceedings to regulatory scrutiny, layoffs, severe cash crunch, shutting down parts of its offline business, there seems to be no end to BYJU’S troubles.

Despite the mounting regulatory actions against the startup, founder and CEO Raveendran claimed, in a recent mail addressed to BYJU’S staff, that the company is on the verge of a turnaround and investors are ready to back the firm in its journey.

In his over 1,200 word long mail, Raveendran told the company’s distressed employees that the ongoing legal action is not coming at the behest of the company’s original lenders, who had signed an agreement to get repaid in November 2026, but instead “aggressive foreign distress funds”. He said the lenders represented by Glas are using “unlawful” ways to force the company to pay back the $1.2 Bn term loan-B (TLB) within 16 months of distribution.