# In the matter of Applicomp (India) Ltd. CP (IB)-507-MB-2018

> NCLT judgment dated 2018-09-25. Citation: TCN-2018-NCLT-00719. The case involves an application filed by State Bank of India under Section 7 of the Insolvency…

- **Court:** NCLT
- **Order date:** 25 Sept 2018
- **Citation:** TCN-2018-NCLT-00719
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/applicomp-india-ltd-cp-ib-507-mb-2018-973ad6e6

## Summary

### Background

The case involves an application filed by State Bank of India under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s. Applicomp (India) Limited, a co-obligor to Videocon Industries Limited (VIL). The application seeks to initiate Corporate Insolvency Resolution Process (CIRP) against Applicomp (India) Limited due to default in repayment of loan facilities availed by VIL, for which Applicomp is a co-obligor. The financial creditor had disbursed loan facilities to VIL, and VIL defaulted, leading to the application against the co-obligor.

## Facts

State Bank of India, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s. Applicomp (India) Limited, the Corporate Debtor/Co-obligor. Applicomp (India) Limited is a co-obligor to Videocon Industries Limited (VIL), the Principal Borrower. VIL had availed loan facilities, and Applicomp (India) Limited co-obliged the amount borrowed by VIL under a Rupee Term Loan Agreement (RTL) dated 08.08.2012. VIL's account turned into Non-Performing Assets (NPA) on 30.04.2017. The total amount of debt in default was ₹456.90 Crores as on 31.12.2017. The Financial Creditor had already filed an Insolvency Petition against VIL, which was admitted on 06.06.2018. The Corporate Debtor argued that the debt was disbursed to VIL

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## Issues and analysis

### Issue 1: Whether the Insolvency Application can be Admitted against the Co-obligor where the CIRP against …

**Ratio:** A co-obligor is jointly and severally liable for the debt, and the initiation of CIRP

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**Reasoning:** The court reasoned that the co-obligor is bound to fulfill the obligation of the

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**Interpretation:** The court interpreted the provisions of the Insolvency and Bankruptcy Code,

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**Application:** The court applied the ratio to the facts of the case, noting that Applicomp

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## Parties

- **Judges:** M.K. Sh…
- **Appellants:** State Bank of…
- **Respondents:** M/s. Applicomp…

## Timeline

- **2012-08-08 — Rupee Term Loan…**: Applicomp (India) Limited co-obliged the amount borrowed by Videocon Industries Limited…
- **2017-04-30 — Account decla…**: Videocon Industries Limited's account…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 3(12) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-3)

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