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Corporate Debtor Cannot Take Benefit Of Clauses In Inter-Se Agreement Between Banks

In Oriental Bank of Commerce Vs. M/s Ruchi Global Limited, the Corporate Debtor resisted the application filed by the Financial Creditor Bank stating that as per the Inter-Se agreement the Applicant Bank should have given notice to the Lead Bank and then filed the application before the NCLT which has not done. The NCLT agreeing with the Corporate Debtor, appeal was filed before the NCLAT.

The NCLAT observed that 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. 

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