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

Gupta Brothers, a partnership firm with its place of business in Indore, defaults on a loan. A creditor intends to file an application under the Code for the firm's insolvency. Which authority is the Adjudicating Authority for this matter under Part III?

The Debt Recovery Tribunal with territorial jurisdiction is the Adjudicating Authority, as it covers the place where the debtor resides, carries on business or personally works for gain. The NCLT deals with corporate persons, not partnership firms, and the Board is a regulator, not an adjudicator.

  1. AThe National Company Law Tribunal at the registered office of the creditor
  2. BThe High Court of the state in which the firm operates
  3. CThe Debt Recovery Tribunal having territorial jurisdiction over the place where the debtor resides or carries on business or personally works for gainCorrect
  4. DThe Insolvency and Bankruptcy Board of India

Explanation

Section 179(1) makes the Debt Recovery Tribunal with territorial jurisdiction over the place where the debtor resides, carries on business or personally works for gain the Adjudicating Authority for individuals and firms. The NCLT handles corporate persons, so option A is wrong.

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