# In the matter of Bush Tea Co. Private Limited C.P (IB) No. 1381-KB-2020

> NCLT judgment dated 2022-04-29. Citation: TCN-2022-NCLT-02957. UCO Bank filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against…

- **Court:** NCLT
- **Order date:** 29 Apr 2022
- **Citation:** TCN-2022-NCLT-02957
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/bush-tea-co-private-limited-cp-ib-no-1381-kb-2020-445fae03

## Summary

### Background

UCO Bank filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Bush Tea Company Private Limited, claiming a default of Rs. 48,22,49,567.54. The Financial Creditor had extended credit facilities to the Corporate Debtor, which were subsequently renewed and enhanced. The Corporate Debtor failed to adhere to the terms and conditions of the sanction letter, leading to the account being declared as NPA on April 19, 2019. A one-time settlement (OTS) was agreed upon but the Corporate Debtor failed to pay as per the agreed terms.

## Facts

UCO Bank, the Financial Creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Bush Tea Company Private Limited, the Corporate Debtor. The Financial Creditor claimed a default of Rs. 48,22,49,567.54, including interest, as of September 22, 2020, with the date of default being January 31, 2019. The Corporate Debtor had approached the Financial Creditor for credit facilities, which were subsequently renewed and enhanced to Rs. 40,00,00,000 vide a sanction letter dated January 1, 2018. The Corporate Debtor executed security documents and hypothecated assets. The account was declared NPA on April 19, 2019, and a notice under Section 13(2) of the SARFAESI Act, 2002, was issued. A one-time settlement (OTS) was agreed upon, but the

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor is in default of a …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016 allows a financial creditor to

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**Reasoning:** The court found that the Corporate Debtor had admitted to being ready and willing to pay

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**Interpretation:** The court interpreted the Corporate Debtor's admission of willingness to pay as

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**Application:** The court applied the principle that a default exists when the Corporate Debtor

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## Parties

- **Judges:** Rajasekha…; Balraj…
- **Appellants:** UCO B…
- **Respondents:** Bush Tea Company…

## Timeline

- **2018-01-01 — Enhancement of Credit…**: The Credit Facility of the Corporate Debtor was enhanced to a sum of Rs.40,00,00,000/-…
- **2019-01-31 — Date of D…**: The date of default is…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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