Byju Raveendran files caveat before Supreme Court against US-based creditor

New Delhi: As a lender to his edtech firm sought to block payment of Rs 158.9 crore to BCCI to avert insolvency, founder CEO Byju Raveendran has filed a caveat in the Supreme Court to prevent any ex-parte order being passed.

The caveat was filed before the apex court on August 3, a day after the National Company Law Appellate Tribunal (NCLAT) passed an order restoring the board of edtech major after setting aside insolvency proceedings against it.

On Friday, the Insolvency appellate tribunal approved Rs 158.9 crore dues settlement with the Board of Control for Cricket in India (BCCI) in which the money was paid by Riju Raveendran (brother of Byju Raveendran).

Glas Trust, a US-based creditor, had opposed the settlement with the BCCI before the NCLAT alleging the money paid by Riju Raveendran as tainted and a case of "round-tripping".

Any decision or judgement passed by the NCLAT, a quasi-judicial body established under the Companies Act of 2013, can only be challenged before the Supreme Court.

Anticipating such a move from the US-based creditor, Byju Raveendran had filed a caveat requesting to be heard before the apex court passes any order on a plea filed by the US-based creditors.

A Caveat application is filed by a litigant to ensure that no order is passed against him or her without being heard.

A two-member NCLAT bench had approved the Rs 158.9 crore dues settlement with BCCI and set aside insolvency proceedings against the edtech major, initiated over a claim filed by the cricket body.

The NCLAT had observed that the settlement arrived between the parties before the Committee of Creditors (CoC) could have been constituted and that the source of the payment being made "is not in dispute" nor related to the foreign funds as alleged by the US-based creditors.

"In view of the undertaking given and affidavit filed, the settlement between the parties is hereby approved and as a result, the appeal succeeds and impugned order (passed by the NCLT) is set aside," a two-member Chennai bench of NCLAT had said.

The tribunal further said the money was paid by Riju Raveendran (brother of Byju Raveendran) through the sale of his shares, taxes have been duly paid and payment is coming through proper banking channels.

As per the undertaking, Riju Raveendran made a payment of Rs 50 crore on July 31, 2024, against the outstanding dues owed by Byju's to BCCI. Another Rs 25 crore will be submitted on Friday, and the remaining Rs 83 crore on August 9 through RTGS.

The appellate tribunal also dismissed the allegation of 'round-tripping' levelled by Byju's US-based lenders, saying they failed to provide any evidence in support of their claims.

On July 16, the Bengaluru bench of the National Company Law Tribunal (NCLT) directed the initiation of Corporate Insolvency Resolution Proceedings (CIRP) against Byju's, admitting the plea filed by the BCCI.

The BCCI had approached the NCLT under the Insolvency and Bankruptcy Code (IBC) over a default of Rs 158.9 crore by Think & Learn.

This NCLT order was challenged by Byju Raveendran before NCLAT.

A storied edtech startup, Byju's was once valued at $22 billion but the reopening of schools after the easing of pandemic restrictions led to its unravelling. BlackRock recently slashed its valuation of $1 billion.

The company's troubles began when it missed financial reporting deadlines two years ago and fell short of revenue projections by more than 50 per cent.

In February, a group of investors in Byju's parent firm Think & Lean, including Prosus and Peak XV, voted to remove Raveendran as CEO during an extraordinary general meeting, citing allegations of "mismanagement and failures". Raveendran had denied all allegations.