CCD Bounces Back! NCLAT Drops Insolvency Order
• Big Win for Café Coffee Day! NCLAT Cancels Insolvency Proceedings
– Relief for CCD! Court Ends Insolvency Case After Settlement
Unmesh Gujarathi
Sprouts News Exclusive
In a major relief for Café Coffee Day’s parent company, Coffee Day Global Ltd (CDGL), the National Company Law Appellate Tribunal (NCLAT) has officially set aside the insolvency proceedings against the company. The decision follows a successful settlement between CDGL and its financial creditor, IndusInd Bank.
The insolvency case began after IndusInd Bank filed a petition citing dues of ₹94 crore, which led the National Company Law Tribunal (NCLT) to initiate the Corporate Insolvency Resolution Process (CIRP) in July 2023. However, in August 2023, Malavika Hegde, a director in the company and wife of late founder V.G. Siddhartha, challenged the order. NCLAT granted a stay on the insolvency process, offering temporary relief to CDGL.
With the recent settlement, both parties jointly requested the withdrawal of proceedings. The Chennai bench of NCLAT, led by Justice M. Venugopal and Shreesha Merla, officially dismissed the insolvency order, clearing the path for CDGL to continue business operations without financial uncertainty.
This marks a crucial victory for CDGL, which has been working hard to stabilize its business since the tragic passing of Siddhartha in 2019. The company currently operates 469 Café Coffee Day outlets across 154 cities, alongside 268 CCD Value Express kiosks and over 48,000 vending machines in corporate offices and hotels.
For CCD, this legal win is a fresh start. With its financial hurdles easing, the company now has the opportunity to focus on growth and expansion, ensuring its strong presence in India’s competitive coffee market.
Also Read: ₹2,000 Cr Ulhasnagar Project Faces Legal Storm.
• Brief History of Café Coffee Day and Its Challenges
Café Coffee Day (CCD) was founded in 1996 by V.G. Siddhartha under its parent company, Coffee Day Global Ltd (CDGL). The brand quickly became India’s largest coffee chain, pioneering the café culture in the country. CCD’s strategy of offering an affordable yet premium coffee experience helped it expand rapidly, reaching over 1,700 outlets at its peak.
• Challenges Faced by Café Coffee Day
1. Financial Struggles and Debt Burden
Despite its success, CCD faced mounting debts due to aggressive expansion and financial mismanagement. The company borrowed heavily to fund new outlets and business operations, leading to a significant debt crisis.
2. Tragic Death of Founder V.G. Siddhartha (2019)
In July 2019, CCD’s founder V.G. Siddhartha was found dead under mysterious circumstances. Before his death, he had written a letter citing financial pressure, debt, and harassment from lenders and tax authorities. His passing sent shockwaves through the company and the business community.
3. Management Crisis and Business Decline
Following Siddhartha’s death, his wife Malavika Hegde took over as CEO and worked towards reviving the company. However, CCD faced a steep decline, with many outlets shutting down and investors losing confidence.
4. COVID-19 Pandemic Impact
The COVID-19 lockdowns in 2020-21 further worsened CCD’s financial position, leading to store closures and reduced footfall. The company struggled to stay afloat during this period.
5. Legal and Insolvency Issues (2023-24)
CCD’s parent company, CDGL, was dragged into insolvency proceedings in July 2023 after IndusInd Bank filed a petition over ₹94 crore in dues. However, in February 2024, NCLAT set aside the insolvency order after a settlement was reached, providing relief to the company.
• Current Status and Future Outlook
CCD currently operates 469 outlets across 154 cities and has over 48,000 coffee vending machines. With the insolvency case resolved and efforts to restructure its finances, CCD is working towards stabilizing its business and reclaiming its position in the Indian coffee market.
While challenges remain, CCD’s brand value and customer loyalty continue to provide hope for a revival under Malavika Hegde’s leadership.
Sprouts News will continue to monitor Café Coffee Day’s journey as it navigates its future growth and business recovery.