IDBI Trusteeship Services has filed an insolvency petition in the Bengaluru bench of NCLT against Coffee Day Enterprises Limited (CDEL) claiming dues of Rs 228.45 crore.
The company is seeking appropriate legal advice and will take all appropriate steps to protect its interests in the above matter, CDEL said in a regulatory filing on Friday.
“An application has been filed by IDBI Trusteeship Services Limited against the Company under Section 7 of the Insolvency and Bankruptcy Code, 2016 read with Rule 4 of the Insolvency and Bankruptcy Rules, 2019 in the National Company Law Tribunal, Bengaluru alleging default of Rs. 228.45 crore,” CDEL said.
Under Section 7 of the Insolvency and Bankruptcy Code (IBC), a financial creditor can initiate insolvency proceedings against the corporate debtor concerned.
Last month, the Chennai bench of the National Company Law Appellate Tribunal (NCLAT) stayed the NCLT’s order to initiate insolvency proceedings against Coffee Day Global Limited (CDGL), which owns and operates the popular cafe Coffee Day.
Passing an interim order, the Chennai bench of the appellate tribunal issued notices to the interim resolution professional and his financial creditor IndusInd Bank and stayed the proceedings of the order passed by the Bengaluru bench of the National Company Law Tribunal (NCLT).
NCLAT said it “applied that there are arguable points connected with this appeal, therefore, we issue a formal notice to the respondents who are already taking notice, enabling it to file its reply”.
The appellate tribunal’s order came on a petition filed by Malavika Hegde, suspended director of CDGL and wife of late VG Siddhartha.
On July 20, the Bengaluru bench of the NCLT passed an order on a petition filed by IndusInd Bank, the company’s financial creditor, claiming dues of Rs 94 crore.
Coffee Day Enterprises has been in trouble following the death of founder chairman V G Siddhartha in July 2019. It is repaying its debt through asset resolution and has significantly reduced since the start of the problem