The National Company Law Tribunal (NCLT) has dismissed Rabobank’s plea to initiate insolvency proceedings against Coffee Day Global, which operates the nationwide chain of coffee parlours, as per an order the contents of which ET has reviewed.
In a ruling uploaded on its website on Wednesday, the Bengaluru bench of NCLT comprising Justice Ajay Kumar Vatsavayi and member technical Manoj Kumar Dubey questioned the intent of Rabobank’s petition. It noted that a debt resolution process for Coffee Day Global was ongoing and the company was trying to sell its coffee vending business, which operates kiosks in offices to repay creditors.
“In the present case, the respondent (Coffee Day Global) is willing and trying to repay the debts of all the creditors and to show its bona fides when it was ready to sell its vending business, and when other lenders accepted the said move, but the petitioner refused to cooperate in that process,” the ruling noted.
“This action of the petitioner clearly establishes that its intention was recovery of its debt but not the resolution of the corporate debtor,” it added.
Rabobank declined to comment. Coffee Day Global did not respond to ET’s queries.
Legal experts are of the view that NCLT’s role is to determine whether a petition by a creditor falls within the category of financial debt or not as described in the Insolvency and Bankruptcy Code for it to be admitted. Some of them ET spoke with termed the order unusual because NCLT had not denied Rabobank’s contention that it had an outstanding claim against the company.
ET had first reported on April 19 about Rabobank’s move to take Coffee Day Global to bankruptcy. The lender had appointed EY’s Shailendra Ajmera as a potential resolution professional to administer the insolvency process.