The Karnataka High Court has stayed proceedings initiated against Malavika Hegde, Chief Executive Officer of Cafe Coffee Day (CCD), in connection with a complaint filed under the Foreign Exchange Management Act (FEMA) in 2022.
Passing an interim order on Monday, the High Court halted further action in the case, granting relief to Hegde pending detailed examination of the matter.
Arguments before the court
Appearing on behalf of Malavika Hegde, senior advocate Sajjan Poovayya submitted that Cafe Coffee Day was founded, managed and controlled as an Indian company, and that the allegations made in the FEMA complaint were misconceived. He argued that the proceedings initiated against the CCD CEO lacked proper legal basis and warranted judicial scrutiny.
The court, after hearing preliminary submissions, found it appropriate to stay the proceedings until the issues raised were examined in detail.
Background of the case
The complaint against Hegde was lodged in 2022 under provisions of FEMA, though specific details of the alleged violations are yet to be adjudicated. The interim relief ensures that no coercive steps will be taken against her until the High Court decides the matter.
Court to hear case further
The High Court is expected to take up the case for further hearing in the coming weeks. The stay order provides temporary relief to Hegde and the CCD management while the legal questions involved are considered.
Cafe Coffee Day, one of India’s most recognisable coffee chains, has undergone significant restructuring in recent years following financial challenges after the death of its founder.