# In the matter of Techno Kart India Limited CP (IB) 510-MB-2018

> NCLT judgment dated 2018-09-25. Citation: TCN-2018-NCLT-00722. The case involves an application under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 25 Sept 2018
- **Citation:** TCN-2018-NCLT-00722
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/techno-kart-india-limited-cp-ib-510-mb-2018-0107df69

## Summary

### Background

The case involves an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, by State Bank of India (Financial Creditor) against M/s. Techno Kart India Limited (Corporate Debtor/Co-obligor). The Financial Creditor filed Form No. 1 under Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, invoking Section 7 of the Code. The Corporate Debtor is a co-obligor of Videocon Industries Limited (VIL), which is the principal borrower. The loan facilities to VIL turned into Non-Performing Assets (NPA) on 30.04.2017. The Financial Creditor has also filed insolvency petitions against other co-obligors of VIL.

## Facts

State Bank of India, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s. Techno Kart India Limited, the Corporate Debtor/Co-obligor. The Corporate Debtor is a co-obligor of Videocon Industries Limited (VIL). VIL is the principal borrower. The Financial Creditor sanctioned and disbursed loan facilities to VIL, with the Corporate Debtor acting as a co-obligor under a Rupee Term Loan Agreement (RTL) dated 08.08.2012. The account of VIL 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 has also filed insolvency petitions against other co-obligors of VIL. The petition against the principal borrower, VIL, was

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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:** The legal principle applied is that a co-obligor is jointly and severally liable for the

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**Reasoning:** The court reasoned that the Corporate Debtor is a co-obligor to VIL and is bound to

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

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**Application:** The court applied the ratio and reasoning to the facts of the case and held

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## Parties

- **Judges:** M.K. Sh…
- **Appellants:** State Bank of…
- **Respondents:** M/s. Techno Kart…
- **Advocates:** Gaurav…; Animesh…; +5 more

## Timeline

- **2012-08-08 — Rupee Term Loan…**: Rupee Term Loan Agreement (RTL) was signed between Videocon Industries Limited (VIL) and…
- **2017-04-30 — Account Decla…**: The account of Videocon Industries Limited…

## 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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