TaxTMI 
TaxTMI 
2018 (9) TMI 2132
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....vency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (hereinafter as Rules) in the capacity of "Financial Creditor" on 05.04.2018 by invoking the provisions of Section 7 of the Insolvency and Bankruptcy Code (hereinafter as Code). 2. Further under the head "Particulars of Corporate Debtor/Co-obligor" the description of the Debtor/Co-obligor is stated as 'M/s. Trend Electronics Limited' (hereinafter as Debtor/Co-obligor) having Registered office at, 'Gangapur GIN. Compound Station Road, Station Road. Ahmednagar, Maharashtra - 414001'. 3. In the requisite Form, under the head "Particulars of Financial Debt" the total amount of Debt in default is stated as (???) 456.90/- Crores as on 31.12.2017. The detail....
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....al borrower was filed on 01.01.2018 and thereafter this Petition/Application has been filed. 5. Submissions by the Financial Creditor: 5.1. The Learned Sr. Counsel for the Financial Creditor has submitted that pursuant to the request of the VIL along-with the Debtor/Co-obligor, the Financial Creditor has duly sanctioned and disbursed the loan amount in aforesaid manner. 5.2. It is further submitted that the Insolvency Petition/Application against the VIL was Admitted for the commencement of the CIRP by this very Bench on 06.06.2018. 5.3. It is further submitted that, in light of the commencement of the CIRP against the Principal Borrower, admittedly there is a default on part of the Debtor/Co-obligor as per S. 3(12) of the Code. 5.....
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....eas the assets of the VIL and the Co-obligors are common, hence it will be difficult to conduct the CIRP. 6.7. In light of above submissions the Learned Advocate has vehemently pleaded that this Petition/Application is not maintainable under the provisions of the Code. 7. Findings: 7.1. The Bench has gone through the submissions made by both the sides and also perused the documents on record. The Bench also carefully perused the decisions of various Courts cited by both sides. 7.2. On careful perusal it is noticed that, the Principal Borrower i.e. VIL had duly availed the Facilities and thereafter had defaulted in repaying the amount availed under Facilities therefore this very Bench has Admitted the Petition/Application against the ....
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....es. It is noticed that in the Insolvency Proceedings the discharge of the liabilities of Principal Borrower happens at the time of approval of Resolution Plan and the Debt of the Principal Borrower is not discharged in absence of the Resolution Plan in the case of Principal Borrower. And therefore the provisions of the S. 134 of the Indian Contract Act, 1872 cannot be applied upon the Debtor/Co-obligor. If the Resolution Plan got approved in the case of Principal Borrower, then, in that case the Debt would have been Discharged. But here the case is not so. 7.8. It is also worth to place on record the dictionary meaning of the word "co-obligor". The Legal meaning envisaged that, "One who is bound together with one or more others to fulfil ....
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....before passing a concluding remark we want to place a reliance on the decision of the Hon'ble NCLAT in State Bank of India v. D.S. Rajendra Kumar (Company Appeal (AT) (Insolvency) No. 87 of 2018) dated 18.04.2018 wherein it is held as under: "5.....However, it is made clear that order of 'Moratorium ' will be applicable only to the proceedings against the 'Corporate Debtor/Co-obligor' and the 'Personal Guarantor', if pending before any court of law/Tribunal or authority but the order of Moratorium 'will not be applicable for filing application for triggering Corporate Insolvency Resolution Process' under Sections 7 or 9 or 10 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as "I & B....
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....ncy Resolution Process. 7.16. Having admitted the Application, the provisions of Moratorium as prescribed under Section 14 of the Code shall be operative henceforth with effect from the date of order shall be applicable by prohibiting institution of any Suit before a Court of Law, transferring/encumbering any of the assets of the Debtor/Co-obligor etc. However, the supply of essential goods or services to the "Corporate Debtor/Co-obligor" shall not be terminated during Moratorium period. It shall be effective till completion of the Insolvency Resolution Process or until the approval of the Resolution Plan prescribed under Section 31 of the Code. 7.17. That as prescribed under Section 13 of the Code on declaration of Moratorium the next ....