NCLAT stays Coffee Day insolvency till next hearing

New Delhi: The National Company Law Appellate Tribunal (NCLAT) on Wednesday stayed the insolvency proceedings against Coffee Day Enterprises Ltd (CDEL), which operates the Cafe Coffee Day chain, till the next date of hearing. The Chennai-based bench of the appellate tribunal stayed the operations of the NCLT order, over a petition filed by Malavika Hegde, Executive Director-CEO of the suspended board of the company.

NCLAT also directed the financial creditor of CDEL -- IDBI Trusteeship Services Ltd (IDBITSL) claiming a default of Rs 228.45 crore, to file a counter affidavit over the submissions of the company.

"In these eventualities, the respondents are directed to file counter affidavits within a period of three weeks. Till the next date of listing, the effect of the operation of the impugned order, admitting the appellant (CDEL) to Section 7 procedures will be kept in abeyance," said a bench comprising Justice Sharad Kumar Sharma and Jatindranath Swain.

The bench has, however, refrained from making any observations over the status of CDEL being a defaulter and said that is an issue which has to be decided at a later stage.

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 down from the time the trouble started.