# 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-02973. 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-02973
- **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-2020-6363b3c9

## 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 Corporate Debtor had approached the Financial Creditor for credit facilities, which were sanctioned and later enhanced to Rs. 40,00,00,000. The Corporate Debtor executed security documents and hypothecated assets to avail the credit facility. However, the Corporate Debtor failed to make repayments, leading to the account being declared as NPA on April 19, 2019. The total amount in default was Rs. 48,22,49,567.54 as of September 22, 2020, with the date of default being January 31, 2019. A one-time settlement (OTS) was agreed upon, but the Corporate Debtor failed to pay as per the agreed terms.

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 7 of the Insolvency and …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency

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**Reasoning:** The court found that the present petition made by the Financial Creditor is complete in

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**Interpretation:** The legal principle is that a financial creditor can initiate CIRP if the

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**Application:** The court applied this principle by examining the petition and finding it

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## Parties

- **Judges:** Rajasekha…; Balraj…
- **Appellants:** UCO B…
- **Respondents:** Bush Tea Company…
- **Advocates:** Joy S…; Santosh Kum…; +3 more

## Timeline

- **2018-01-01 — Enhancement of Credit…**: The Corporate Debtor's credit facility…
- **2019-01-31 — Date of D…**: The date of default is…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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