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

Kishore, an individual debtor in Pune, is a defendant in a recovery suit before a civil court, and a creditor has also raised a dispute on priority of claims in his bankruptcy. Under the Code, what is the position regarding the jurisdiction of the Debt Recovery Tribunal?

The Debt Recovery Tribunal can entertain or dispose of suits or proceedings by or against the individual debtor, claims by or against him, and questions of priorities or other questions of law or fact arising from the insolvency, notwithstanding any other law. It is not confined to the insolvency application alone.

  1. AIt can entertain only the insolvency application and must leave suits and priority questions to civil courts
  2. BIt can entertain or dispose of any suit or proceeding by or against the individual debtor and any question of priorities or other question of law or fact arising out of his insolvency, notwithstanding any other lawCorrect
  3. CIt can decide questions of fact but not questions of law arising from the insolvency
  4. DIt can decide priority questions only with the prior approval of the Insolvency and Bankruptcy Board

Explanation

Section 179(2) gives the Debt Recovery Tribunal, notwithstanding any other law, jurisdiction over suits or proceedings by or against the individual debtor, claims by or against him, and any question of priorities or other question of law or facts arising out of the insolvency. Option C is wrong because the text covers both law and facts.

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