Supreme Court Questions Byju’s Settlement with BCCI

The Supreme Court has raised concerns about Byju’s decision to settle a ₹158.9 crore debt with the Board of Control for Cricket in India (BCCI). A three-judge bench led by Chief Justice of India DY Chandrachud questioned why Byju’s chose to settle with BCCI alone, despite having over ₹15,000 crore in debt.

Byju’s enormous debt, including ₹158 crore owed to BCCI, is now a focal point of legal scrutiny. The Supreme Court termed the NCLAT’s approval of the settlement as “unconscionable” and ordered a stay on its operation. It also directed the interim resolution professional (IRP) to maintain the status quo and not convene a committee of creditors until the Court delivers its final judgement.

On August 2, the NCLAT had approved the settlement, providing a major relief to Byju’s and restoring control to its founder, Riju Raveendran. However, on August 14, the Supreme Court stayed the verdict after Glas Trust Company LLC, a US-based creditor of Byju’s, challenged the NCLAT’s judgement.

The Supreme Court posed a crucial question to Byju’s: “With a debt as large as ₹15,000 crore, can one creditor, like BCCI, be given preferential treatment and be paid from a promoter’s personal assets?” The Court also hinted that the dispute may need fresh adjudication.

This case originated when BCCI claimed Byju’s failed to pay ₹158 crore in sponsorship dues. The proceedings were halted when Raveendran offered to pay the amount personally, leading to the current legal impasse.