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

Meera runs a retail business as a sole proprietor in Jaipur, where she also lives. A creditor wishes to file an insolvency application against her under Part III of the IBC. Which forum is the Adjudicating Authority for this purpose?

The Debt Recovery Tribunal with territorial jurisdiction over the place where the debtor resides, carries on business or works for gain is the Adjudicating Authority for individuals and firms under section 179. The NCLT handles corporate persons, and the creditor's location does not decide jurisdiction.

  1. AThe National Company Law Tribunal at the registered office of the creditor
  2. BThe Debt Recovery Tribunal having territorial jurisdiction over the place where she resides or carries on businessCorrect
  3. CThe High Court of the State where the creditor is located
  4. DThe Insolvency and Bankruptcy Board of India

Explanation

Under section 179, the Adjudicating Authority for individuals and firms is the Debt Recovery Tribunal with territorial jurisdiction over the place where the individual debtor actually and voluntarily resides, carries on business or personally works for gain. The NCLT is the authority for corporate persons, not for individuals and firms. The creditor's location is irrelevant.

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