Coffee Day Enterprises Limited — Important, 28-02-2025: General Updates

The National Company Law Appellate Tribunal has set aside the initiation of Corporate Insolvency Resolution Process (CIRP) against Coffee Day Enterprises Limited, allowing the company’s appeal. The tribunal determined that the appeal was valid, primarily due to issues regarding the authority of the debenture trustee, who filed a Section 7 application. The court found that the trustee did not have the requisite authorization, as the power of attorney held by the individual representing the creditor had been revoked before the action was taken.

The proceedings were deemed barred by limitation, as the default date was set on September 30, 2019, and the application was filed on September 7, 2023—well beyond the prescribed period. The tribunal also ruled that Section 10A of the Insolvency and Bankruptcy Code, which suspends the initiation of insolvency proceedings for defaults arising after March 25, 2020, did not apply in this case since the default predated this date. Consequently, the tribunal dismissed the application for CIRP, reinforcing the importance of adhering to procedural governance under the debenture trust deed.