CCD's parent company gets big relief from NCLAT, bankruptcy proceedings stayed till next hearing

On Wednesday, the National Company Law Appellate Tribunal provided a major relief to Coffee Day Enterprises Limited, the company operating the Cafe Coffee Day chain, by staying the order of bankruptcy proceedings given by NCLT till the next hearing.

The Chennai Bench of the Appellate Tribunal passed an interim order, according to which the execution of the NCLT order would be stayed. In its order, NCLAT has directed the financial creditor of CDEL, IDBI Trusteeship Services Ltd., to file a counter affidavit. IDBITSL claimed default of Rs 228.45 crore in its appeal.

A bench of Justices Sharad Kumar Sharma and Jatindranath Swain said, "In such circumstances, the respondents are directed to file a counter affidavit within three weeks. Till the next date of listing, the impugned order to include the appellant (CDEL) in Section-7 proceedings will be kept in abeyance."

NCLAT passed this order on a petition filed by Malvika Hegde, Executive Director, and Chief Executive Officer of the suspended board of directors of the company.

The Bengaluru bench of NCLT had on August 8 accepted the petition filed by IDBI Trusteeship Services Limited (IDBI TSL), which claimed a default of Rs 228.45 crore. The bench had also directed the appointment of an interim resolution professional to look after the operations of the debt-ridden company.