Coffee Day Global and IndusInd Bank Settle, Withdraw Insolvency Litigations

13 Sep 2023 , 11:30 AM

Coffee Day Global and IndusInd Bank informed the Chennai bench of the National Company Law Appellate Tribunal (NCLAT) on September 13 that they have reached a settlement, leading to the withdrawal of their respective insolvency litigations. As a result, NCLAT accepted their submissions and set aside the order admitting Coffee Day Global to insolvency.

Senior Advocate Arvind Pandian and lawyer Pawan Jhabak conveyed to the appellate tribunal that Coffee Day Global’s loan had been assigned to a company called ASREC (India) Limited in September 2023. Lawyer Chitra Nirmala, representing IndusInd Bank, concurred with Pandian’s submissions and requested the appellate tribunal to annul the insolvency order.

On August 11, NCLAT had temporarily stayed the order permitting Coffee Day Global, the operator of the Cafe Coffee Day chain in India, to enter the insolvency process. This stay order was issued because NCLAT identified certain debatable points requiring clarification and asked IndusInd Bank to respond within two weeks. The matter is scheduled for a hearing on September 25.

On July 20, the Bengaluru bench of the National Company Law Tribunal (NCLT) had admitted Coffee Day Global to insolvency following a petition by IndusInd Bank, alleging a default of Rs 94 crore by the company. NCLT ruled that while Coffee Day Global raised various arguments about the nature of the bank’s petition, it did not dispute the default amount or challenge the bank’s submissions regarding the default dates. Consequently, the tribunal accepted the insolvency plea and imposed a moratorium.