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2020 (1) TMI 1189 - AT - Insolvency and BankruptcyMaintainability of Application filed under Section 7 of Insolvency and Bankruptcy Code, 2016 - debt classified as NPA - Outsatnding debts in the account of Corporate Debtor - Appellant submits that the Appellant Bank had extended Letter of Credit facility to the Corporate Debtor which was non-fund based and the respondent was taking benefit of the same - HELD THAT:- The Inter-se Agreement between the Banks was restricted to the Banks and Corporate Debtor was not part of the Inter-se Agreement. This fact is not in dispute. Learned Counsel for the Appellant has pointed out para 7 (xxii) of the Appeal to submit that the account of the Respondent Corporate Debtor remained out of order in the books of Appellant Bank who was regular in the books of other member Banks. Appellant states that as per the guidelines of the Reserve Bank of India, it was the Appellant only who classified the account of the Respondent as NPA as on 31st August, 2017 - The Learned Counsel has referred to notice dated 05th September, 2017 sent by the Appellant in this regard to the Corporate Debtor (page 404). According to the Learned Counsel when the account of the Appellant Bank became NPA, it was bound to take action against Corporate Debtor. The Agreement being Inter-se between the Banks the Corporate Debtor cannot take benefit of the Clauses in that agreement, which are binding only the Banks. If there is a default by any member of the Consortium, it would be a matter for the other banks to be aggrieved with and Corporate Debtor cannot take benefit of the same to raise grievance. If the Appellant Bank did not act in tune with the Consortium Agreement it may be matter of consideration for other Bank/s of the Consortium and/or Reserve Bank of India. However, there is nothing which Bars filing of Section 7 of IBC Application by the Appellant. Even if there was Clause that the Bank which wants to take action should give notice of 30 days, if notice was not given that would be a matter for the Lead bank to look into. That does not create Bar for the Appellant Bank to move Application under Section 7 of IBC. The judgment of the Adjudicating Authority in dismissing the Application under Section 7 because of the Consortium Agreement cannot be maintained - Nothing is shown that there was any other reason not to admit the Application. For the above reasons, we allow the Appeal. The Impugned Order is quashed and set aside - Matter remitted back to the Adjudicating Authority.
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