The insolvency proceedings against Coffee Day Enterprises Ltd (CDEL), the parent company of the popular Cafe Coffee Day chain, have restarted after the National Company Law Appellate Tribunal (NCLAT) failed to deliver a verdict by the Supreme Court’s mandated deadline of February 21, 2025.
The Chennai bench of NCLAT wrapped up hearings last week on an appeal from CDEL’s suspended board of directors and reserved its judgment, according to a regulatory filing by the company. However, with no ruling issued by the cutoff date, the Supreme Court’s directive kicked in, lifting the earlier stay on the Corporate Insolvency Resolution Process (CIRP) and reactivating the process as of February 22. The interim resolution professional (IRP) has regained authority to oversee the struggling company’s operations, though NCLAT’s final order remains pending.
The saga began on August 8, 2024, when the Bengaluru bench of the National Company Law Tribunal (NCLT) greenlit a plea from IDBI Trusteeship Services Ltd (IDBITSL), which alleged a default of Rs 228.45 crore by CDEL. An IRP was appointed, but the company’s suspended board swiftly appealed to NCLAT, securing a stay on the CIRP on August 14. IDBITSL then escalated the matter to the Supreme Court, which on January 31, 2025, ordered NCLAT to resolve the appeal by February 21, or else the stay would automatically dissolve.
With the deadline missed, the insolvency process is now back on track. “The CIRP resumes, and the IRP’s powers are reinstated effective February 22,” CDEL stated, noting that NCLAT’s reserved judgment is still awaited.
CDEL, which also runs a resort, offers consultancy services, and trades coffee beans, has been grappling with financial woes since the death of its founder, V.G. Siddhartha, in July 2019. Once a sprawling enterprise, the company has been shedding assets to trim its debt and scale down operations amid ongoing challenges.
The resumption of insolvency proceedings marks a critical juncture for the Coffee Day Group, leaving its future uncertain as stakeholders await NCLAT’s eventual ruling. For now, the iconic cafe chain’s fate hangs in the balance, caught between legal deadlines and financial distress.