2020 (1) TMI 1189

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....ondent - 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 Section 7 was filed mentioning the amount in default as on the date of classifying the debt as NPA, i.e. 31.08.2017 was/is Rs. 8,22,36,542/-. 2. I....

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....e 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 because of the Consortium Agreement, the Application was dismissed. 5. Learned Counsel for the Appellant is relying on judgment dated 11th August, 2017 of this T....

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.... 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. 8. In our view the Agreement being Inter-se between the Banks the Corporate Deb....