NCLAT Chennai Terminates Insolvency Proceedings Against Café Coffee Day’s Parent Company, Parties Enter Settlement
The National Company Law Appellate Tribunal (“NCLAT”), Chennai Bench, comprising of Justice M. Venugopal (Judicial Member) and Mrs. Shreesha Merla (Technical Member), while adjudicating an appeal filed in Malavika Hegde v Indusind Bank Ltd. & Anr., has terminated the Corporate Insolvency Resolution Process (CIRP) of M/s Coffee Day Global Ltd. which was initiated by the...
The National Company Law Appellate Tribunal (“NCLAT”), Chennai Bench, comprising of Justice M. Venugopal (Judicial Member) and Mrs. Shreesha Merla (Technical Member), while adjudicating an appeal filed in Malavika Hegde v Indusind Bank Ltd. & Anr., has terminated the Corporate Insolvency Resolution Process (CIRP) of M/s Coffee Day Global Ltd. which was initiated by the NCLT on 20.07.2023.
M/s Coffee Day Global Ltd. is the parent company of the Coffee Day Group and Coffee Day Enterprises Ltd., which runs a multinational coffeeshop named ‘Café Coffee Day’.
Background Facts
Coffee Day Global Limited (“Corporate Debtor”) is a company promoted by Late Mr. V.G. Siddharth and belongs to the Coffee Day group. The Corporate Debtor is engaged in the retail business of coffee and is also the parent company of Coffee Day Enterprises Ltd, which runs a multinational chain of coffeeshops named Café Coffee Day.
The Corporate Debtor had availed credit facilities from the Indus Ind Bank Limited (“Financial Creditor”). The account of Corporate Debtor was declared a Non-Performing Asset (“NPA”) in 2020 and the loan could not be repaid to the Financial Creditor.
The Financial Creditor filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (“IBC”), seeking initiation of Corporate Insolvency Resolution Process (“CIRP”) against the Corporate Debtor, over a default of Rs. 94 Crores.
The NCLT noted that the Corporate Debtor has not disputed the default amount, the petition is within limitation and crosses the threshold limit of Rs. 1 Crores. Accordingly, on 20.07.2023 the NCLT admitted the Corporate Debtor into CIRP and appointed Mr. Shailendra Ajmera as the Interim Resolution Professional.
Ms. Malavika Hegde (“Appellant”) being the suspended management of the Corporate Debtor, filed an appeal before NCLAT against the order dated 20.07.2023.
Proceedings Before NCLAT
In hearing held in August 2023, the Bench had stayed the CIRP of the Corporate Debtor. Thereafter, a ‘Joint Memo’ dated 07.09.2023 was filed before the NCLAT and the Financial Creditor has assigned the debt to ASREC (India) Ltd. Since the Parties have now entered settlement, it was requested that the CIRP may be terminated.
Accordingly, the Bench has set aside the NCLT order dated 20.07.2023 and the CIRP against the Corporate Debtor has been terminated.
“In view of the fact that the ‘settlement’ was arrived at between the ‘Appellant’ and the ‘1 st Respondent/Bank’, which is not disputed by the Ld. Counsel for the 1st Respondent/Bank, this Tribunal, takes on Record the ‘memo’ dated 07.09.2023 filed before the ‘Office of Registry of NCLAT’, Chennai and pursuant to the ‘settlement’ being arrived at, this ‘Tribunal’ allows the instant Appeal, by setting aside the impugned order dated 20.07.2023, passed by the Adjudicating Authority / Tribunal in CP(IB)No.132/BB/2022 on the file of ‘NCLT’ Bengaluru Bench and dismisses the main Company Petition.”
Case Title: Malavika Hegde v Indusind Bank Ltd. & Anr.
Case No.: Company Appeal (AT) (CH) (Ins) No.235/2023
Counsel for Appellant: Mr. P.H. Arvindh Pandian, Sr. Advocate for Mr. Pawan Jhabakh, Mr. Abishek Raman, Mr. Jerin Asher Sojan, Advocates
Counsel For the Respondent: Ms. Chithra Nirmala, Advocate for R-1.
Click Here To Read/Download Order