Insolvency Process Resumes Against Café Coffee Day After NCLAT Misses Supreme Court Deadline
Insolvency Process Resumes Against Café Coffee Day After NCLAT Misses Supreme Court Deadline
The Indian coffeehouse defaulted on Rs.228.45 crore payable to IDBI Trusteeship Services
The insolvency process against Coffee Day Enterprises Ltd (CDEL), the parent company of Cafe Coffee Day, has resumed after the National Company Law Appellate Tribunal (NCLAT) failed to issue its order within the 21 February deadline prescribed by the Supreme Court.
Earlier, the Chennai bench of NCLAT had reserved its verdict on an appeal filed by a director of CDEL's suspended board.
The CDEL confirmed that since the appeal was not settled within the timeframe, the stay on the Corporate Insolvency Resolution Process (CIRP) was lifted, and the powers of the interim resolution professional (IRP) were reinstated from 22 February 2025.
However, the company said that while the order was reserved, it was not pronounced.
The insolvency proceedings against CDEL began on 08 August 2024, when the Bengaluru bench of the National Company Law Tribunal (NCLT) admitted IDBI Trusteeship Services Ltd (IDBITSL) plea, claiming a Rs.228.45 crore default.
Thereafter, an Interim Resolution Professional (IRP) was appointed to oversee the debt-ridden company's operations.
However, the suspended board challenged the move, which led the NCLAT to stay the proceedings on 14 August.
The IDBI approached the apex court, which on 31 January 2025, directed the appellate tribunal to dispose of the appeal by 21 February. The court stated that if the appeal was not resolved within the timeframe, the stay on CDEL's insolvency process would be vacated automatically.
CDEL operates Cafe Coffee Day outlets, a resort, consultancy services, and coffee bean trading. Since the death of its founder, VG Siddhartha, in July 2019, the company has faced financial struggles. It has attempted to reduce its debt through asset sales and restructuring.
