TMI Blog2020 (1) TMI 1189X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmit 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, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Raunak Verma, Mr. K. Datta, Advocates ORDER Heard Advocate Shri H.P. Bhardwaj for the Appellant and the Learned Counsel for Respondent Corporate Debtor. This Appeal has been filed by Oriental Bank of Commerce against dismissal of Application filed under Section 7 of Insolvency and Bankruptcy Code, 2016 ( IBC in short) against the Respondent Corporate Debtor by Impugned Order dated 14th February, 2019. The Learned Counsel for the 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. In the account of the Respondent Corporate Debtor there were outstanding dues and thus, the Application under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fresh petition. 4. The Learned Counsel for the Appellant has referred to the Clauses of the Agreement relied on by the Adjudicating Authority to dismiss the Section 7 Application. It is stated that the Consortium Agreement was a matter Inter-se the concerned Banks to oversee and monitor credit facility extended by the department by the different Banks to the Corporate Debtor and it was an agreement between the Banks and Corporate Debtor was not party to it. Counsel states that in law nothing bars the Appellant from filing Application under Section 7 of IBC when debt is due and in default. Counsel states that although the Respondent did not dispute before the Adjudicating Authority the fact that there was debt and default, still only be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ween 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... creditors‟ as quoted below, the Inter se Agreement between the financial creditors‟ cannot override the said provision, nor can take away the right of any Financial Institution to file application under Section 7 of the I B Code. 9. We are in Agreement with the observations made by the Hon ble Bench of this Tribunal as above. We find that the judgment of the Adjudicating Authority in dismissing the Application under Section 7 because of the Consortium Agreement cannot be maintained. 10. 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. We remit back the matter to the Adjudicating Authority. Parties are di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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