Coffee Day says plea filed against firm for insolvency proceedings by IDBI Trusteeship before NCLT

Last month, the National Company Law Appellate Tribunal had stayed an order of the NCLT that had directed initiation of insolvency proceedings against the firm.

Published on: Sep 8, 2023, 18:24:49 IST

By HT News Desk

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Coffee Day Enterprises Ltd, the company which operates Cafe Coffee Day outlets, said on Friday that the IDBI Trusteeship Services had filed an application before the National Company Law Tribunal (NCLT) for insolvency proceedings.

The application filed by IDBI Trusteeship Services has been filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 before the NCLT in connection with alleged dues of over ₹228 crore.

The company in its letter to the National Stock Exchange and Bombay Stock Exchange said it is seeking ‘appropriate legal advice’ and will take all appropriate steps to protect its interest.

This comes nearly a month after the National Company Law Appellate Tribunal (NCLAT) had stayed an order of the NCLT that had directed initiation of insolvency proceedings against the firm.

Men stand outside a Cafe Coffee Day outlet in New Delhi, India. (Reuters file)

The two-member tribunal had issued notices to the Interim Resolution professional and its financial creditor IndusInd Bank and stayed the operations of the order passed by the Bengaluru Bench of the NCLT, PTI reported.

The NCLAT said it has "found that there are arguable points involved in this appeal, therefore, we issue a formal notice to the Respondents who are already on caveat, enabling it to file its reply."

The NCLAT directed IRP and IndusInd Bank to file a reply within two weeks up to August 25, 2023, and a rejoinder, if any, be filed by CDGL within two weeks and directed to list the matter for hearing on September 20, 2023.

The order was passed over a plea filed by Malavika Hegde, the suspended Director of Cafe Day Global Limited and wife of late VG Siddhartha.

The Bengaluru bench of the NCLT passed an order over a plea filed by IndusInd Bank, a financial creditor of the company, claiming dues of ₹94 crore.

The NCLT also appointed Shailendra Ajmera as the interim resolution professional after suspending the board.

(With PTI inputs)

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