NEW DELHI: The insolvency process against Indian coffeehouse Coffee Day Enterprises Ltd (CDEL), the parent company of Cafe Coffee Day, resumed after the National Company Law Appellate Tribunal (NCLAT) failed to issue its order within the Supreme Court’s February 21 deadline.
Earlier, the Chennai bench of NCLAT concluded hearings and reserved its verdict on an appeal filed by a director of CDEL’s suspended board. In a regulatory filing, CDEL confirmed that since the appeal was not settled within the given timeframe, the stay on the Corporate Insolvency Resolution Process (CIRP) has been lifted, and the powers of the interim resolution professional (IRP) have been reinstated from 22 February 2025.
However, the company said, while the order has been reserved, it has not yet been pronounced.
The insolvency proceedings against CDEL began on August 8, 2024, when the Bengaluru bench of the National Company Law Tribunal (NCLT) admitted a plea by IDBI Trusteeship Services Ltd (IDBITSL), which claimed a default of Rs 228.45 crore. An IRP was appointed to oversee the debt-ridden company’s operations. The suspended board swiftly challenged this, leading NCLAT to stay the proceedings on August 14, 2024.
IDBITSL then took the matter to the Supreme Court, which on 31 January 2025, directed NCLAT’s Chennai bench to dispose of the appeal by 21 February. The court had also ruled that if the appeal was not resolved within the directed timeframe, the stay on CDEL’s insolvency process would be automatically vacated.
CDEL, the parent company of Coffee Day Group, operates Cafe Coffee Day outlets, a resort, consultancy services, and coffee bean trading. The company has faced financial struggles since the death of its founder, VG Siddhartha, in July 2019, and has been attempting to reduce its debt through asset sales and restructuring.