The district magistrate of Darjeeling has served a notice on the senior management of Darjeeling Organic Tea Estates Pvt Ltd (DOTEPL) to appear before him on September 2 for a hearing in connection with non-payment of wages at the tea gardens that the company operates in the hills.

The DM also asked the management to explain at an in-person hearing why the ‘lease determination’ process should not be initiated for the gardens following the default in wage/salary payment and statutory dues.

Tea estate lands are leased out to individual companies by the state governments in India.

The initiation of lease determination is the first stage in the process to cancel the lease. DOTEPL is the second largest owner of gardens in Darjeeling having 10 estates, employing about 7,000 workers.

The company has defaulted in wage payment leading to workers’ unrest, throttling production in the estates.

The DM’s letter dated August 26 stated that wages amounting to over Rs 3.5 crore has been pending and various labour unions have voiced deep concern over the affairs of the company.

On August 20, The Telegraph had reported how the operations in the gardens, which include marquee estates such as Happy Valley and Ambootia, have come to a standstill and wages to majority of the workers have not been paid for three fortnights.

Anit Thapa, chief executive of Gorkhaland Territorial Administration, had already informed the DOTEPL management that workers’ cooperatives would be put in place if they failed to clear the dues soon.

On Saturday, the company acknowledged receipt of the intimation for the meeting.

“My first concern is to regularise the wages by next Friday. For that, the company has to find a new investor and it is in advance talks regarding that,” Rembert Biemond, acting chairman of DOTEPL, told this newspaper.

Determination of lease

However, he wondered if the determination of lease would resolve the crisis. DOTEPL’s leases are all pledged to banks such as State Bank of India, Uco Bank and Indian Bank. Banks lend to tea gardens on the basis of the leases held as collateral.

Any move to change the terms of the lease could run into a legal challenge. Moreover, it may also upend the financing model that tea gardens and financial institutions work on, a section of garden owners said.

“Determination of lease will not resolve the problem of Darjeeling gardens which is under pressure due to multiple reasons, most notably falling yields, rising cost led by wages and cheap imports from Nepal. Unless these issues are tackled, the financial health of the gardens would not revive,” said a Darjeeling planter.

Sources said DOTEPL would require a fund infusion of over Rs 100 crore in the company to clear the dues of the workers and banks as well as shore up working capital to keep operations going, especially during winter when there is no production.

However, the present set of European investors led by Artava AG of Switzerland, which owns a majority share in DOTEPL, is not willing to risk any more money.

They have already invested a considerable sum during the reign of the previous management and are reluctant to pump in more funds.