Coffee Day Insolvency Resumes: NCLAT Fails to Meet Deadline

New Delhi, Feb 24 (PTI) Insolvency process against Coffee Day Enterprises Ltd (CDEL), which owns the Cafe Coffee Day chain, has resumed as appellate tribunal NCLAT could not pass the order within the specified deadline of February 21, set by the Supreme Court.

Last week, the Chennai bench of the National Company Law Appellate Tribunal (NCLAT) completed the hearing and reserved its order over the appeal filed by the director of its suspended board, CDEL informed through a regulatory filing.

"Since the appeal has not been disposed of until February 21, 2025, as per the instruction of the Supreme Court, the order passed by NCLAT regarding the stay on the CIRP of the Corporate Debtor stands vacated. Therefore, the CIRP of the Corporate Debtor recommences/resumes and the powers of the IRP are hereby reinstated with effect from 22 February 2025," it said.

"However, the order has been reserved by NCLAT, and yet to be pronounced," it added.

On August 8, the Bengaluru bench of the NCLT (National Company Law Tribunal) admitted a plea filed by IDBI Trusteeship Services Ltd (IDBITSL) claiming a default of Rs 228.45 crore and appointed an interim resolution professional (IRP) to take care of the operation of the debt-ridden company.

The suspended board immediately challenged this before NCLAT, which on August 14, 2024, stayed the Corporate Insolvency Resolution Process (CIRP) initiated against CDEL by NCLT over the plea of IDBITSL.

However, this was challenged by IDBITSL before the Supreme Court, which had on January 31, 2025 directed the Chennai bench of NCLAT to dispose of the appeal pending before it before February 21, 2025.

The apex court had also directed that if the appeal filed by CDEL is not disposed of by NCLAT, then the order passed by the appellate tribunal staying the CIRP shall stand vacated automatically.

"In the event the appeal is not disposed of by then, the impugned order passed by the Appellate Tribunal shall stand vacated automatically," it said.

CDEL is the parent company of Coffee Day Group which operates the Cafe Coffee Day chain. It also owns and operates a resort, provides consultancy services and is engaged in the sale and purchase of coffee beans.

CDEL is in trouble after the death of founder Chairman V G Siddhartha in July 2019. It is paring its debts through asset resolutions and has significantly scaled down from the time the trouble started.