# In the matter of Malavika Hegde vs. IDBI Trusteeship Services Limited & Ors.

> NCLAT judgment dated 2025-02-27. Citation: TCN-2025-NCLAT-00194. The case involves an appeal against an order by the NCLT, Bengaluru Bench, which admitted the…

- **Court:** NCLAT
- **Order date:** 27 Feb 2025
- **Citation:** TCN-2025-NCLAT-00194
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/malavika-hegde-vs-idbi-trusteeship-services-limited-ors-5e3cfa03

## Summary

### Background

The case involves an appeal against an order by the NCLT, Bengaluru Bench, which admitted the Corporate Debtor, Coffee Day Enterprises Limited, into CIRP proceedings under Section 7 of the I&B Code, 2016. The appellant, Malavika Hegde, is a shareholder and director of the Corporate Debtor. The initial application was filed by IDBI Trusteeship Services Limited, a Financial Creditor. The Corporate Debtor had issued non-convertible debentures, and the Respondent No. 1 was appointed as the Debenture Trustee. The appellant argues that the CIRP initiation was flawed due to non-compliance with the Debenture Trust Deed conditions, lack of a valid Power of Attorney for initiating proceedings, and the proceedings being barred by limitation.

## Facts

1. Coffee Day Enterprises Limited (CDEL) is a holding company of Cafe Coffee Day Group, incorporated in 1996 by Late Mr. V.G. Siddhartha, the late husband of the Appellant, Ms. Malavika Hegde.
2. In March 2019, CDEL proposed to issue 2000 unlisted, unrated, secured, redeemable, and non-convertible debentures of INR 10 lakhs each, aggregating to INR 200,00,00,000, on a private placement basis.
3. On 22.03.2019, a Debenture Trustee Agreement was entered into between CDEL and Respondent No. 1, IDBI Trusteeship Services Limited, appointing the latter as the Debenture Trustee.
4. Investors/debenture holders, Credit Opportunities II Private Limited and Indian Special Situation Schemes, subscribed to the non-convertible debentures and were allotted 1000 non-convertible

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## Issues and analysis

### Issue 1: Whether the Corporate Insolvency Resolution Process could at all have been initiated, in the …

**Ratio:** The Debenture Trust Deed outlines the terms and conditions that govern the relationship

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**Reasoning:** The court reasoned that the Debenture Trustee's powers to initiate proceedings under

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**Interpretation:** The court interpreted the Debenture Trust Deed as requiring a prior

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**Application:** The court applied the ratio to the facts of the case, finding that the

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## Parties

- **Judges:** Sharad Kumar…; Jatindranat…
- **Appellants:** Malavika…
- **Respondents:** Coffee Day…; IDBI Trusteeship…

## Timeline

- **1996-01-01 — Incorporation…**: Coffee Day Enterprises…
- **2019-03-01 — Proposed Debent…**: CDEL proposed to issue 2000…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 8 — Insolvency resolution by operational creditor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-8)

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