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

A dispute arises in the bankruptcy of Mr. Dinesh Rao, who runs a business in Pune, over the priority between two claimants to the estate, and a related suit is pending against him. Which forum has jurisdiction to decide these matters?

The Debt Recovery Tribunal with territorial jurisdiction over the place where the individual resides, carries on business or works for gain decides these matters. Section 179 gives it power over suits, claims and questions of priorities arising from the individual's bankruptcy, overriding other laws.

  1. AThe Debt Recovery Tribunal having territorial jurisdiction over where he resides or carries on business or works for gainCorrect
  2. BThe National Company Law Tribunal at its principal bench
  3. CThe civil court in the district where the creditor resides
  4. DThe High Court of the state where the suit was first filed

Explanation

Section 179(1) makes the Debt Recovery Tribunal with territorial jurisdiction the Adjudicating Authority for individuals and firms. Section 179(2) gives it jurisdiction over suits, claims and questions of priorities arising out of the individual's insolvency and bankruptcy, notwithstanding any other law. The NCLT and civil courts are therefore not the forum.

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