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TMI Blog2019 (2) TMI 1827X X X X Extracts X X X X X X X X Extracts X X X X ..... - as on 31.08.2017. The account of the Corporate Debtor was classified as a Non-Performing Asset on 31.07.2017. Submissions by the Financial Creditor 3. The Corporate Debtor herein, approached a Consortium of Banks consisting of (i) Dena Bank, (ii) Punjab National Bank, (iii) Jammu & Kashmir Bank & (iv) Oriental Bank of Commerce for availing (a) Fund Based WC- Cash Credit (Hyp), (b) Packing Credit (PC) (Sub Limit of CC), (c) Non-Fund Based - Letter of Credit, (d) Guarantee. These facilities were sanctioned vide Sanction Letter dated 27.11.2009. Thereafter, the credit facility pertaining to Fund Based WC- Cash Credit (Hyp), Packing Credit (PC) (Sub Limit of CC), Non- Fund based - Letter of Credit, Guarantee was enhanced vide sanction letter dated 16.10.2011. The sanction letters were renewed from time to time. Third Supplemental Working capital Consortium Agreement dated 27.01.2012 was entered into by the Consortium of Banks and the Corporate Debtor in order to secure Credit facilities granted by the Financial Creditor Oriental Bank of Commerce for an amount of Rs. 34.15 Cr, out of the total credit facility by the Consortium of Banks of Rs. 343.44 Crores. 4. The credit facility g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urities agreed to be created or closed and caused to be closed the respective cash credit accounts or other accounts opened in the books of the said banks but in the morning of the full working day immediately preceding, any action intended to be taken under this clause due notice of such intention and of the action intended to be taken shall be communicated in writing by the lead bank to the other banks and other banks shall immediately or as soon as possible after receipt of such notice demand repayment of the monies due under the relative cash credit account/packing credit account/other accounts and stop all further advances or accommodations to the borrower on the relative cash credit accounts/packing credit accounts/other accounts of the borrower with it and notify its intentions in writing either to act jointly in such action with the lead bank or otherwise and in case the other Banks shall agree to jointly in such action then the said banks shall act jointly and in case of failure, neglect or refusal by the other banks to join in any such action, the lead bank taking action shall make the banks so refusing, a defendant/respondent in any action with it may take against the bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... granted by the Financial creditor, the Corporate Debtor has already paid a considerable amount towards its repayment and only a meagre sum of Rs. 8.00 Crores approx. is left to be paid. The Corporate debtor has committed a breach of contract by withdrawing its credit funding facilities. Rejoinder by the Financial Creditor: 8. In the rejoinder submitted by the Financial Creditor, it is stated that the account of the Corporate Debtor was classified as NPA on 31.08.2017 by the Financial Creditor for a default of Rs. 8,22,36,542/- and accordingly SARFAESI Notice u/s 13(2) dated 05.09.2017 was issued. The Financial creditor argues that the notice to the Lead Bank is not mandatory for filing Section 7 Petition under IBC as the requirement of Section 7 is "a financial creditor either by itself or jointly with other financial creditors may file an application....". Reliance has been placed on a principle of law that "the clause of an agreement cannot supersede or breach the provision of the statute made by the parliament". Moreover, it is argued that Inter Se Agreement cannot be read with IBC proceedings as IBC proceedings are meant for resolution and not for recovery. Sur-rejoinder by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is petition. 11. Moreover, after perusing the minutes of the meetings of the members of the consortium, and ipso facto that the Financial Creditor is legally tied in a consortium and has received several suggestions from the Lead bank as well as the Member Banks not to squeeze the cash flow, it is understood that the action of the Financial Creditor is absolutely an independent decision which may hamper the interest of other stakeholders therefore devoid of any merits. 12. It is further believed that when parties enter into a valid and lawful contract, they are under an obligation to abide by the same and merely because a move is made under the IBC, does not discharge the parties from a lawful obligation. Section 7 of IBC starts as "a financial creditor either by itself or jointly with other financial creditors may file an application....". A joint application under IBC ought to be filed with the consent of all other interested parties. In the present case, the Financial creditor appears to have filed this petition U/s 7 on its own without having consultation or without having approval of rest of the members of the consortium. 13. On consideration of a legal interpretation of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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