Two-member tribunal of the Chennai bench of the NCLAT issued notices to the Interim Resolution professional and its financial creditor IndusInd Bank
In a relief to Coffee Day Global Ltd (CDGL), which owns and operates popular Cafe Coffee Day chain, the National Company Law Appellate Tribunal (NCLAT) on Friday stayed an order of NCLT that directed initiation of insolvency proceedings against the company.
Passing an interim order, a two-member tribunal of the Chennai bench of the appellate tribunal, 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 National Company Law Tribunal (NCLT).
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".
It has 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.
"In the meanwhile, till the next date of hearing, operation of the impugned order shall remain stayed," said the bench comprising Justice Rakesh Kumar Jain and Shreehsa Merla.
The NCLAT order came over a petition filed by Malavika Hegde, the suspended Director of CDGL and wife of late VG Siddhartha.
Earlier on July 20, 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 Rs 94 crore.
The NCLT also appointed Shailendra Ajmera as the interim resolution professional after suspending the board.
During the proceedings, the counsel for Hegde disputed the date of default, which has been preponed.
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.
It was argued that the date of default has never been February 28, 2020, but it has been brought on record during the pendency of the Application before the NCLT and has been relied upon by the Tribunal.
However, the private sector lender 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 i.e., NeSL after giving six opportunities to the CDGL to respond.
CDGL 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.