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

Meera runs a small tailoring business in Nagpur and is an individual debtor under Part III of the IBC. Where should a bankruptcy matter concerning her be filed, going by the provision on the Adjudicating Authority for individuals and firms?

The matter goes to the Debt Recovery Tribunal with territorial jurisdiction over the place where the debtor actually and voluntarily resides, carries on business or personally works for gain. Section 179 names the DRT as Adjudicating Authority for individuals and firms, not the NCLT.

  1. ANational Company Law Tribunal at the place of her registered office
  2. BDebt Recovery Tribunal having territorial jurisdiction over the place where she actually and voluntarily resides, carries on business or personally works for gainCorrect
  3. CHigh Court of the State of her birth
  4. DAny Debt Recovery Tribunal chosen by her creditors

Explanation

Section 179(1) makes 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 Adjudicating Authority. The NCLT is the forum for corporate persons, not for individuals. Her place of birth or the creditors' choice is irrelevant.

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