NCLAT stays insolvency proceeding against Coffee Day Global
The National Company Law Appellate Tribunal (NCLAT) has stayed the Bengaluru bench of the NCLT verdict ordering initiation of corporate insolvency resolution process against Coffee Day Global Limited (CDGL).
The NCLAT has issued notices to the interim resolution professional (IRP) and its financial creditor IndusInd Bank, and directed them to file a reply within two weeks. CDGL has been given two weeks to file a rejoinder. The matter has been listed for hearing on September 20, 2023.
The NCLAT order came on a petition filed by Malavika Hegde, the suspended director of CDGL and wife of late VG Siddhartha. Hegde had challenged the NCLT order, which had appointed Shailendra Ajmera as the IRP and suspended the board of Coffee Day Global Ltd.
During the proceedings, Hegde’s counsel disputed the date of default, which has been brought forward. It was argued that the date of default’ in Form’ I’, Part’IV’ is specifically mentioned as April 30, 2020, and even in the rejoinder filed by the IndusInd Bank is mentioned that the date of default’ has been backdated from June 30, 2022, to April 30, 2022, as June 30, 2022 is the date of NPA.
However, IndusInd Bank submitted that the date of default’ dated February 28, 2020, has been uploaded on Form ‘D’ in terms of an Order of the NCLT dated April 3, 2023. It submitted that February 28, 2020, is uploaded in the Information Utility – NeSL — after giving six opportunities to the CDGL to respond.
Coffee Day Global Ltd had requested a short-term loan of Rs 115 crore in February 2019. In 2022-23, CDGL’s consolidated total income was Rs 920.41 crore. It had reported a loss of Rs 67.77 crore in the year.
As per the annual report of its parent firm Coffee Day Enterprises Ltd for FY22, CDGL owns 495 cafes in 158 cities and 285 CCD Value Express kiosks. There are 38,810 vending machines that dispense coffee in corporate workplaces and hotels under the brand.
Coffee Day Enterprises 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 it down from the time the trouble started.
Also Read: Coffee Day Enterprises defaults on payment of Rs 465 crore
