Education News
NCLAT did not exercise due process In the case of the edtech company Byju’s : Supreme Court
Due process was not followed, according to the Supreme Court, which is concerned about how the National Company Law Appellate Tribunal (NCLAT) handled the Byju case. The NCLAT’s ruling, according to Chief Justice DY Chandrachud, “does not show any application of mind at all”. This happened after the US-based lender, Glas Trust Company, challenged the NCLAT’s ruling to stop the edtech company’s bankruptcy case.
As part of an agreement to sponsor cricket jerseys, Byju’s owing the Board of Control for Cricket in India (BCCI) ₹158 crore, which prompted the BCCI to file for bankruptcy. The procedure was stopped when the NCLAT approved a settlement between Byju’s and the BCCI. Glas Trust countered that there was a chance the settlement money was corrupted and included debts to US lenders.
The NCLAT’s ruling has been stayed by the Supreme Court, which has also ordered the BCCI to reopen the insolvency procedure and place the settlement money in a different escrow account. In order to emphasize the importance of due process, the case has been returned to the NCLAT for reconsideration. The decision will have a big impact on Byju’s and its creditors, which emphasizes how crucial openness is throughout bankruptcy procedures.