Authority: National Company Law Tribunal (NCLT), Kolkata Bench, Court No. I

Order Date: 12 June 2026

Case Overview

State Bank of India (SBI), the financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Buxa Dooars Tea Company (India) Limited, the corporate debtor.

The financial debt originated from a credit facility of ₹17.50 crore sanctioned to the corporate debtor on 18.08.2012. The facilities were renewed and enhanced over time, including a FITL facility of ₹34,49,510/- granted to overcome COVID-19 distress. A subsequent sanction letter dated 31.03.2023 outlined an enhanced aggregate limit of ₹7.07 crore, comprising a Cash Credit facility of ₹6.50 crore and a Term Loan of ₹1.07 crore. The corporate debtor's board resolved to avail this loan on 31.03.2023.

The corporate debtor confirmed an outstanding debt of ₹7,54,38,895.53 as on 31st March 2023. It defaulted on its repayments, with the first default occurring on 14.03.2024, leading to the account being classified as a Non-Performing Asset (NPA) on that date. A National E-Governance Services Limited (NeSL) report showed a default amount of ₹6,27,88,871.00 as on 16.12.2023. SBI issued a statutory demand notice under Section 13(2) of the SARFAESI Act on 09.05.2024, demanding ₹7,32,08,306.00 (inclusive of interest up to 09.05.2024). A further demand notice was issued by SBI's advocate on 02.06.2024. The corporate debtor failed to pay these dues. The total outstanding debt claimed by SBI in the petition was ₹9,03,57,078.00 (inclusive of interest) as on 13.05.2025.

The debt was secured by a hypothecation charge over the corporate debtor's entire current assets, plant & machinery, and vehicles, and a mortgage over a 4291.30-acre tea garden land in Kalchini, Jalpaiguri district.

The corporate debtor, in its defense, argued that its operations were paralyzed due to a Gazette Notification dated 06.11.2024 and an alleged unlawful takeover of its tea gardens by a third party. It contended that SBI was misusing the IBC as a coercive tool and that the matter was pending before the Debt Recovery Tribunal (DRT), Siliguri, in SA No. 215 of 2014 and O.A. No. 80 of 2024. The corporate debtor also disputed the date of first default, the amount, and the reliability of SBI's statement of account but failed to provide any supporting documents or proof of payments.

The adjudicating authority, after hearing both parties and perusing the records, found the application complete and the existence of a default established. It held that its mandate under Section 7(5) of the IBC was to admit the application upon satisfaction of a default, and no other grounds for rejection existed. The tribunal found the debt to be a 'financial debt' as there was a disbursal against the consideration for the time value of money. The petition was filed within the limitation period from the first default date of 14.03.2024.

Final Outcome

The NCLT admitted the application and initiated the Corporate Insolvency Resolution Process (CIRP) against Buxa Dooars Tea Company (India) Limited. A moratorium under Section 14 of the IBC was declared, prohibiting the institution or continuation of suits, transfer of assets, enforcement of security interest, and recovery of property from the corporate debtor. Mr. Kanchan Dutta (Registration No. IBBI/IPA-001/IP-P00202/2017-2018/10391) was appointed as the Interim Resolution Professional (IRP). The IRP is directed to make a public announcement and call for claims. SBI is liable to pay an advance fee of ₹3,00,000 to the IRP. The management of the corporate debtor is vested in the IRP, who is authorized to take police assistance to take charge of the company's assets and documents.

Topics: Insolvency, Banking, Tea Industry