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CS Professional · Insolvency and Bankruptcy - Law and Practice · Insolvency Resolution of Individuals and Partnership Firms

A creditor has filed an application against partner Meera Shah of a firm for a partnership debt, and it is pending before the Debt Recovery Tribunal at Pune. Later, another creditor files an application against her co-partner Anil Shah of the same firm at a different Tribunal. What is the legal position?

The later application against the co-partner must be presented in, or transferred to, the Tribunal where the first application is pending. That Tribunal may direct consolidation of the proceedings as it thinks just, so parallel separate proceedings are avoided.

  1. AThe second application must be presented in or transferred to the Tribunal where the first is pending, which may direct consolidationCorrect
  2. BThe second application is void because only one partner can be proceeded against
  3. CBoth applications proceed separately at their own Tribunals
  4. DThe second application must be moved to the National Company Law Tribunal

Explanation

Where an application has been made against one partner, any other application against another partner in the same firm must be presented in or transferred to the Adjudicating Authority where the first is pending. That authority may give directions to consolidate the proceedings. Separate parallel proceedings are not allowed, and the NCLT is not the forum for these matters.

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